The retail industry aims to harmonise various standards for barcodes and messaging via electronic data interchange systems, by Geoffrey Nairn

New technologies often fail to live up to expectations in retailing. The Global Commerce Initiative has thus been created to ensure that the hype that surrounds e-commerce translates into real benefits for all members of the retailing supply chain.

The GCI was set up in October 1999 as a forum for technological co-operation between leading suppliers and retailers who share the goal of improving industry efficiencies by driving global supply chain standards. It currently has more than 25 participants including multinationals such as WalMart, Tesco, Kraft Foods, and Proctor and Gamble.

Technology has had a chequered track record in retailing. The big retailers have traditionally seen technology as a competitive weapon and imposed proprietary standards that favour their particular way of working. Suppliers thus end up having to handle a mishmash of different technologies and product code standards.

Examples of technologies that fail to live up to expectations are not hard to find, says Peter Jordan, European director of IT systems at Kraft Food, the US-based packaged foods supplier. He is also a global co-ordinator for the GCI.

He gives the example of an unnamed company's experience with barcoding technology, where rejection rates approached 50 per cent because of the poor printing quality of the barcodes.

"If you have invested $22m in an automated warehouse and it fails regularly because it cannot handle the barcodes, then you have a big problem," he says.

Such problems should be ironed out at earlier, he feels. But it is often difficult to persuade all participants to sit down and work together on seemingly mundane issues - such as barcode printing standards.

"Today there is a lot of hype about e-commerce, but underlying the retail industry there are some very basic fundamentals," he says. "Technology will do whatever you want it to do, but we should not forget the basics."

r Jordan sees the GCI as an attempt by the retail industry to put right some of the mistakes it has made in the past by harmonising today's various standards for barcodes or EDI messages.

If a manufacturer receives an order via EDI, for example, it could come in a variety of forms. US companies use the Ansi standard, the UK industry uses the Tradacoms standard and France uses Gencod. There is also an international standard, called Eancom, that attempts to harmonise these national standards. "Everyone uses Eancom, but they use it differently. This is now becoming a real issue," says Mr Jordan.

It is the same with barcodes where manufacturers must know the various "symobologies" used in different markets and print packaging with different labels and barcodes for different markets. By harmonising barcodes, manufacturers could save money and smaller manufacturers would be better able to compete with the multinationals, Mr Jordan feels.

Even in an area as specialised as product security tags, various technologies exist. "Manufacturers must fit different tags to identical products depending on what each retailer wants," says Mr Jordan.

Another innovation that weighs heavily on manufacturers is the current fashion for "scorecards" - detailed questionnaires - that retailers use to assess their suppliers. This trend has gained momentum with the adoption of efficient consumer response (ECR) techniques but once again, there are different types of scorecard in use by different retailers.

"Manufacturers thus may have to answer a different set of questions from each of the retailers they supply," says Mr Jordan. Smaller manufacturers are particularly handicapped as they have less resources to devote to the scorecard process.

The global initiative has created working groups to attempt to solve the incompatibilities in the areas mentioned above. Each group is co-chaired by one supplier and one retailer in an attempt to achieve better co-operation between manufacturer and retailers on these technical issues.

The working group that has been running longest focuses on EDI and is co-chaired by Kraft Foods and WalMart. It has the difficult task of migrating loyal EDI users from decade-old standards to more modern international EDI standards.

One of its biggest challenges is how to evolve to Extensible Mark-up Language (XML), which many experts see as the future "language" for business-to-business commerce on the internet.

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