2005 SUNRISE IS COMING. ARE YOU READY?

MICHAEL GARRY

If you think that 2005 Sunrise -- that is, Jan. 1, 2005, the deadline for reading and internalizing bar codes representing something other than 12 digits -- doesn't apply to you, consider the following scenarios.

It's April 23, 2005, and you haven't yet gotten all of your corporate and store systems ready to accept 13-digit EAN-13 bar codes on products coming from Europe, which are in great demand in your stores. Of course, you want those products, so you're wrangling with a particular manufacturer over a new product marked with an EAN-13 bar code. The manufacturer flatly refuses to ship you products with traditional 12-digit UPC codes that your systems are hard-wired to accept.

Finally you say, "OK, ship it to me with the EAN-13 codes." Then you undergo the time and considerable expense of putting your own UPC labels over the manufacturer's labels. Finally you begin to sell the items. But your competition has already been selling the item for three weeks! Not only have you lost sales, but you've lost consumers who have been forced to shop elsewhere.

The next day, a consumer ends up taking an EAN-13-marked item you forgot to re-label to the checkout. The scanner most likely reads the symbol, but your POS software is unable to process the 13-digit number because it is built to process only 12-digit numbers.

So the cashier makes perhaps the most dreaded announcement in a retail store: "Price check, aisle four!" The shopper is fuming; the other people in line are lamenting their luck. Finally a price is manually entered, but the shopper thinks about shopping elsewhere next time. And the inventory information for that item is unchanged because only the price, not the item itself, was entered into the system.

These scenarios were outlined by John Terwilliger, vice president, market development, Uniform Code Council, Lawrenceville, N.J., in a presentation on 2005 Sunrise at the UCC's recent U Connect Conference, held in Lake Buena Vista, Fla., May 21-23. 2005 Sunrise has a special significance for the UCC since it is the UCC's initiative, launched in 1997 as an attempt to get the retail industry in North America to operate under the same product-ID ground rules established by EAN International, Brussels, Belgium, for the rest of the world.

Thus, by Jan. 1, 2005, all North American retailers will be expected to scan and process the eight-digit EAN-8 and 13-digit EAN-13 symbols used elsewhere -- in addition to the 12-digit UPC they have always scanned, which will continue to be the dominant North American bar code. Retailers outside of North America are unaffected; because the 12-digit UPC code came out a few years before EAN codes, those retailers have long been equipped to scan UPC codes.

Of course, up until Jan. 1, 2000, most companies were more concerned with the need to get their systems in shape to handle a four-digit year. Indeed, Y2K was perhaps a more pressing deadline because, in theory, a business could come to a halt if it wasn't prepared. The scenarios above do not paint that extreme a picture, though certainly they portray situations devoutly to be avoided.

Over the past year, as 2005 has drawn closer, more retailers have begun to take 2005 Sunrise seriously. In SN's Ninth Annual State of the Industry Report on Supermarket Technology, 37% of respondents said they would be preparing for 2005 Sunrise in 2003, compared to 15% who said they did so in 2002. But for those retailers putting off 2005 Sunrise considerations, Terwilliger had this reminder: "The clock is ticking. It will happen."

2005 Sunrise at its heart comes from the recognition that the marketplace has become more global, with more products crisscrossing international borders.

Not only is there more international trade, but the UCC is changing the rules governing UPC codes, which will also lead to more EAN-13-coded products entering the United States and Canada. Beginning in 2005, new companies outside North America will be unable to mark their products with both UPC and EAN codes -- only EAN codes will be allowed.

Moreover, to eliminate multiple inventories, existing manufacturers located outside North America may begin to eliminate what UPC codes they employ and stock only EAN-marked items.

But to really be on top of the global commerce game, it's not enough to be ready for eight-digit and 13-digit bar codes. You really need to add one more digit and be prepared for 14-digit codes. At that point, you are not only 2005 Sunrise compliant, you are GTIN (global trade identification number) compliant. And there are many reasons why GTIN compliance will be important.

GTIN is actually an umbrella term that encompasses all data structures, including the eight-digit, 13-digit and 14-digit EAN codes as well as the 12-digit UPC. Indeed, it is the new global term meant to bring universal consistency to bar codes. UCC's argument is that "if you have to turn your programmers loose, 14 digits won't cost you anymore than 13, so you might as well get to 14," said Terwilliger.

Retailers that are compliant with the GTIN will be able to support bar codes on all levels of packaging, from items and inner packs to cases and pallets. In addition, those retailers will be in position to handle 14-digit RSS (reduced space symbology) codes, which are being developed for perishables, small health care items, and other products.

Perhaps most significant, GTINs -- along with another new global standard, GLNs (global location numbers) -- are required to participate in global data synchronization between retailers and manufacturers using UCCnet, UCC's data synchronization division.

Ahold's Approach

Following Terwilliger's presentation, Becky Pickett, development manager, e-business, Ahold Information Services, Greenville, S.C., the IT division of Ahold USA, explained how her company is approaching 2005 Sunrise compliance and GTIN compliance, and she offered tips for retailers.

But Ahold set fairly ambitious goals when it launched its compliance program in March 2002, she said. The company decided to go after not only GTINs but GLNs as well. "There is more benefit in doing it all together than to go back and do GLN separately," she said.

Ahold has since updated its goals regarding scanning and storing bar codes. The company now wants to be able to scan 13-digit bar codes and 14-digit codes for DSD back-door receiving. While not Ahold's initial goal, she said it's better to be able to store 13- and 14-digit codes.

Ahold also decided that because of the variability of manufacturer codes, all parsing, segmenting and building of intelligence in the UPC number would be stopped.

Pickett said another key decision made by Ahold was to add GTIN fields rather than simply expand the current UPC fields by two digits. "If you only expand the UPC, it only affects the retail field," she noted, whereas Ahold wanted to extend its GTIN to as many as nine levels, such as case and pallet.

Among the systems that Pickett said were "most likely to be impacted" by 2005 Sunrise were purchasing, warehouse, financial, POS, data warehouses, EDI, DSD and store labels. She said that 2005 Sunrise would also affect loyalty cards, data mining, coupon handling and clearing, reclamation/returns, and home shopping.

Regarding hardware, she advised checking into scanners at the warehouse, DSD back door and checkout (both traditional and self-checkout), as well as data storage space at stores and headquarters. "Just because a vendor tells you [a scanner] can read 13, does not mean it really will," she said.

Pickett and other U Connect speakers acknowledged that while extremely vital to an organization, 2005 Sunrise is not always the most stirring issue and can sometimes evoke mostly indifference among many executives. As a result, communication is a key skill for any 2005 Sunrise project leader. "It is unbelievable how many people don't care but need to know [about 2005 Sunrise]," she said.