YOU

OU

11 billion

reasons to say thank you

to barcodes

Copyright GS1 France - Fotolia, Istockphoto. Printed 09/11

INTRODUCTION
On the importance of standards
A standard represents an agreement that structures companies activities. It can involve rules or recommendations
that everyone applies, and it can involve a method of measuring, describing or classifying products or services.
GS1 standards are a set of rules on usage and a common language that enable the efficient management of supply
chains globally by identifying products uniquely, shipping units, sites and services and by making the exchange of
information between independent partners more reliable.
The international and multisector GS1 standards can thus help companies meet the challenges of a globalized supply
chain and make them more efficient and more profitable.

Business processes that are too often based on manual

GS1
standardsbenetting
company
performance

exchanges (paper, fax, telephone) are affecting the

performance of companies on increasingly competitive
markets. They generate additional costs due both to

dealing with paper, archiving data and managing

claims as well as to the lack of reliable information.
Thousands of documents throughout the supply chain are
exchanged daily between business partners to deal with the
design, production, distribution and sale of manufactured
products. From the product sheet to the notice of payment,
and including vital messages like orders, shipping notices
and invoices, the efficiency of the supply chain depends
on the smooth and secure flow of a great deal of reliable
information.

Barcodes lead to 11 billion euros

in annual savings in France
4

u From the barcode

Manufacturers mark their products with a barcode and retailers equip
their stores with optical readers. Automatic product identification
thus facilitates the checkout process by reducing data entry

errors and waiting time. Use of the barcode is the basis for an
automatic resupply system and leads to an improvement of

the onshelf product availability. The use of barcodes is now

being extended to logistics and is helping optimize inventory and
stock management while ensuring product traceability.

Savings
proved by
30 years
experience

In France, 28 million orders are exchanged every year

in the commercial sector

u ... to EDI
Half of manufacturers and 100% of FMCG retailers automate the
exchange of data by using Electronic Data Interchange (EDI).
They electronically send and receive the documents forming the
basis of their transactions in a predefined format. This automation
has resulted, among other things, in the elimination of the

costs related to paper, in more reliable data and in the

reduction of manual inputting.
* 2010 survey conducted among members of GS1 France.

Economic impact of standards

on the supply chain
u Savings achieved through the use of barcodes
Barcodes lead to an annual savings of 5.69% of retail revenue.*
The direct, concrete and quantifiable savings from the use of
barcodes amounts to 2.8% of sales. These savings are related
to the reduction in time at the checkout, fewer errors and the
better use of the cashier operators time.
The indirect savings come to 2.89% of sales, which is
related to the increase in sales due to better customer service,
better tracking of stocks and store flows and the reduction of
unknown markdowns.

Annual savings of 5.69% of annual retail

revenue through the use of barcodes
* According to the study 17 billion reasons to say thanks, PWC (Vineet Garg, Charles Jones & Christopher Sheedy)

u Savings due to the use of EDI

The implementation of EDI by retailers is considered
as strategic since all of them use EDI orders, representing

87% of all orders sent by this means.

Every year, 794 million euros in savings are realized
through the use of GS1 EDI standards for ordering, shipping
notices, invoices and product data sheets (see table below).

EDI leads
794 million
euros
in annual
savings
in France

Electronic
messages

Number

Savings in euros

Orders

24 352 003

87%

449 816 684

Shipping notices

10 318 303

37%

191 301 348

Electronic invoices

9 860 295

35%

139 030 159

Synchronized
product data sheets

320 000

10%

13 440 000

Savings
for the members

793 588 191

Study methodology: The savings shown were calculated based on information gathered from manufacturers and
retailers and are totaled for the entire supply chain. The study was conducted among 98% of generalist retailers
on their warehouse flows and on a sample that was representative - in terms of business sectors and sales - from
their suppliers (2009/2010).

In all, about 1.56 billion euros could be saved

if all current transaction messages (order shipping notice - invoice) were dematerialized.

The savings transaction by transaction

EDI order: a savings of 18.5 per message
The order is the message that initiates the business transaction. The reliability of this process
depends on the way it is handled: the administrative costs and the order-to-delivery period.
A manually processed order generates additional administrative costs and leads to more claims
than an order that is integrated directly into the information system of whoever receives it.

Savings for
everyone in the 
supply chain

No need to send a fax t
Elimination of manual order entry t
Elimination of errors related to
automated shipments t
Fewer claims due to errors in manual input t
One day less of stock
needed
The integration of EDI adds real value to the companys business strategy and offers a
competitive advantage thanks to the simplification of the interaction between partners and
the greater capacity for flow management, and because a smaller team can now handle
a larger volume of business.

GS1s ROI Simulator

u How are savings due to the use of GS1 standards calculated?
The savings matrix developed by GS1 France enables company managers
to calculate the return on investment (ROI) associated with the use of GS1
standards in the supply chain.
This new approach makes it possible, for each standard broken down by
process (product reference, resupply, shipping, reception, billing, etc.) to
identify the potential savings that could be realized if the standard were used.

u How does the tool work?

Based on its profile as a manufacturer or retailer, the user enters its data into
a matrix (number of pallets shipped or received, number of product sheets,
pay of an operator, etc.) and the ROI Simulator then computes the potential
gains for each stage in the supply chain.
The ROI Simulator is a powerful tool for making decisions about the use of
standards and is available by request by emailing:
cassi.belazouz@gs1fr.org

The electronic shipping notice and the shipping label: a savings of

0.5 per pallet
The joint use of the electronic shipping notice and the marking of shipping units using the
GS1-128 shipping label helps optimize logistics operations throughout the supply chain: goods
receipt, order preparation and the stocking and shipping of the goods. The automatic capture
of information on the packages / pallets together with the electronic submission of additional
information relating to these packages / pallets improves the reliability of the operations and
leads to significant productivity gains. It also guarantees control over product traceability.

Savings for
everyone in the 
supply chain

Elimination of the cost of printing and attaching storage labels t
Better circulation of trucks t

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Automating the logistics processes has led to greater reliability with respect to order
preparation, shipping and billing, and it has also improved logistics productivity, accelerated
the reception process, and reduced the number of claims. The resulting improvements in
traceability, quality and security all go to the benefit of the consumer.

Logistics excellence: a savings of 1 per pallet

Simplified reception is a process that helps expedite reception by reducing checks on quantity
and quality while improving the reliability of information concerning reception. It is the result of
collaboration between the manufacturer and retailer based on mutual trust and on the successful
use of the electronic shipping notice and the shipping label.

Savings for
everyone in the 
supply chain

Elimination of the cost of printing and attaching storage labels t
Better circulation of trucks t

Reduction of time for checks upon reception t
Elimination of claims about reception t
Fewer
staff needed on the unloading dock t
Elimination of quality checks t
Elimination of claims
about reception
The GS1 standards allow to reduce the time spent receiving products by more than 50%.

The electronic invoice: a savings of 14 per message

The invoice is a fundamental element in the business relationship. Whether an accounting record
or evidence for legal purposes, the speed and quality with which it is processed are crucial for
triggering payment. The dematerialization of the invoice consists in eliminating the sending of
the paper invoice and involves the computer-to-computer exchange of invoices using EDI or an
electronic signature.

Savings for
everyone in the 
supply chain

Elimination of mail handling costs t
Reduction of sending costs t
Reduction of costs for checks t
Reduction of accounts reconciliation t
Elimination of inputting costs t
Reduction of data
storage costs t
Reduction of the time to process claims
This has a number of advantages in terms of reducing administrative costs and storage
costs as well as automating and streamlining processes (processing speed, data integration,
accounts reconciliation, etc.). The result is better access to information and a better business
relationship.

A savings of 14
per electronic invoice and of
42 per product data sheet

10

The synchronization of product information: a savings of 42

per product data sheet
The electronic catalog is indispensable for the supplier to provide reliable and up-to-date product
information to its various partners. The partners can thus be informed in real time, without
technology being a barrier. The synchronization of product information thus ensures that the
manufacturer (who holds the information) and the retailer (who receives the information) have
mirror images of the product information in their systems.

Savings for
everyone in the 
supply chain

Reduction in the time to input information in the product reference t
Better productivity in
the management of product data sheets t
Fewer disputes with suppliers t
Acceleration of the
introduction of new products t
Increased productivity in order processing
Administrative costs are lower due to the elimination of re-entries of product data sheets,
to the use of a single exchange format and to a fall in commercial claims. Logistics and
shipping operations are optimized; the trucks are fuller; warehouse deliveries are faster and
more accurate, with as a result a decrease in logistics disputes. The shelving of new products
is speeded up.
Finally, the availability of products on the shelves is improved (less stockout, greater product
range, fresher products).

2 200 suppliers of retail products

dematerialize their product data
sheets

11

Achieve operational excellence with

GS1 standards
u An annual study conducted by the Consumer Goods Forum has established
a link between the use of GS1 standards and improvements in business
performance.

No use of SSCC
and of ORDERS messages

7,8%
Difference
- 52%

Use of SSCC
and of ORDERS messages

3,8%

Reduction in the out-of-stock percentage due to the use of SSCC and EDI order transmission

Use of GDSN
1 - 50%

8,9%
Difference
- 44%

Use of GDSN
> 50%

Reduction of distribution costs due to the use of GDSN

12

5%

More competitive
Efficiency

Customer
satisfaction

Quality
enhancement

Sustainability

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Annual growth rate of sales

100%
50% 51%
1%

Average implementation level of

A
standards implemented

Distribution costs:
6.5%

5 6

Customer
satisfaction
 Improved client relationship
 Improved customer satisfaction
 Better information availability

Supplier Service Level

 GTIN on consumer units

 GTIN on cases/cartons/inners

Out of stocks

Sustainability

Improved quality
 Improved data quality
 ewer invoice-disputes

 GTIN on cases/cartons/inners
 SSCC
 EDI for orders
 EDI for despatch advice

Store Service Level

 Improved Image & Brand

 Less Waste
 Optimized usage of resources
 Better overview of inventory

Efciency
 Time saving
 Cost reduction
 Improved supply chain operations
 Improved visibility
 Increased understanding of retailers
needs and become preferred
collaboration partner
 Increased sales

Invoice accuracy

 EDI for invoices (manufacturers)

 SSCC
 EDI for orders
 EDI despatch advise
 Sales with syn master data

Distribution costs

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 EDI for orders
 Sales with synchronized master
data via GDSN

Order to delivery
err cycle time

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Annual Revenue Growth Rate

 Roll out and full implementation
of Trading partner performance
standards (E401)

Figure 7. Competitive advantage chart

Industry
dustry leader
leaders

-43%

Distribution costs:
11.4%

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Competitive advantage

As seen in Figure 6, the top-right quadrant represents

organizations with 6-10 standards implemented that have
an average minimum implementation level of 51percent.
Companies in this group reported lower distribution costs
in comparison to their peers with fewer standards adopted
and lower average implementation levels. Industry leaders
(companies that have implemented at least six standards at
an average implementation level of above 50 percent
manufacturer as well as retailer and wholesaler) prot from
reduced distribution costs.

Level of store service

10

Number of standards implemented

Figure 6. Distribution costs and the usage of standards

As shown in Figure 8, the out-of-stock rate (the extent to

which the product is available when the consumer wants to buy
it) is much lower among companies who have implemented the
Serial Shipping Container Code (SSCC) standard or used EDI
for orders. Both actions could lead to better serve consumers
who benet from fewer out-of-stocks and earlier access to new
products. It is essential that consumer value and satisfaction are
met to maintain shopper loyalty, not only for the brands, but
also to the retail store in order to increase sales and category
protability.

Figure 7 illustrates that there are many benecial relationships

between the usage of standards and business measures.

On-Shelf/POS out-of-stocks with the use of SSCC

No Implementation of
SSCC

7,8%
Difference:
-52%

Implementation of SSCC

Figure 8.

3,8%

Lower out-of-stock rate with the use of SSCC

Quality of invoicing
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standards (E401)

The tables are taken from the publication, Improving business performance and competitive advantage through the
implementation of standards (Findings of the Consumer Goods Forum Global Compliance Survey - January 2011).

The completion of the order - shipping

notice - acknowledgment of receipt of goods
- payment notice flows using GS1 standards
leads to a savings of 50 per order

13

GS

GS1 France is contributing to

companies digital development
Since its inception, the mission of GS1 has been to facilitate commercial exchanges between
businesses by developing multisector communication standards.
GS1 has a vision of a world where objects and the information related to them circulate
efficiently and safely. We do this for the benefit of companies and to improve the daily lives
of everyone.
Our mission is to be a neutral leader that enables communities of users to develop and
implement international standards by providing the tools and building the confidence
needed to achieve our vision.
Identify, capture, share the 3 key stages in GS1 standards
The GS1 system is built around two main elements: automatic identification standards
and communication standards.
The automatic identification standards are based on identifiers (e.g. a product reference,
a use-by date, a batch number, etc.) and bar codes and / or RFID chips that can carry these
identifiers and capture them automatically at any point in the supply chain.
The communication standards are used to exchange data about transactions (order, invoice,
shipping notice), stable master data (product sheet data) and visibility data (related to
events).
GS1 standards are a component of the companys Social and Environmental
Responsibility
86% of companies continue to send and receive paper documents or use their phones
to conduct their daily transactions.
At a time when companies are all making commitments to sustainable development,
this figure raises questions.
The implementation of GS1 standards is part of a responsible development policy.
Eliminating paper shipments through the dematerialization of flows and optimizing the
filling of trucks through the improved synchronization of product information are some
examples of ways that GS1 standards contribute to a better environment.

14

15

2, rue Maurice Hartmann

92137 Issy-les-Moulineaux cedex
T +33 (0)1 40 95 54 10
F +33 (0)1 40 95 54 49
E infos@gs1fr.org

www.gs1.fr