Move to GTIN standard challenges the masses

By January 1, 2005, American retailers and consumer product goods (CPG) manufacturers are supposed to be Sunrise 2005-compliant—meaning capable of reading and writing bar codes conforming to the new Global Trade Item Number (GTIN) standard. This replaces the eight-digit uniform product code (UPC) format, which has been common in North America for 30 years, with a 14-digit bar code that is compatible with Europe's EAN-13 and EAN-8 standards.

The reason for this new standard? Pretty soon, the UPC format is going to run out of unique numbers to allocate to products—some time in 2005, in fact—hence the need to find an alternative beforehand.

Well, that's the theory. Major manufacturers certainly are compliant, which isn't surprising, since benefits will be substantial. For the first time, CPG companies such as Coca-Cola and Procter & Gamble will be able to print the same bar code on products sold on both sides of the Atlantic. Major retailers, including Wal-Mart, also are compliant. Wal-Mart recognized early on that RFID tags required GTIN-compliant product codes, and that consequently Sunrise 2005 was on the critical path for its RFID plans.

But plenty of businesses haven't been so quick on the uptake. Retailers are the worst culprits, but manufacturers also are playing catch-up. The problem isn't so much reading and writing the longer bar codes, but storing the information in enterprise applications. "In some systems, the field width is hard-coded in," says Christian Clauss, head of IBM's worldwide automatic identification practice in Geneva, Switzerland, which helps companies comply with the GTIN standard.

Hopes that bar codes will be truly interchangeable within Europe and North America likely will prove wide of the mark. As Kevin Mixer, a director at Boston-based AMR Research, points out, automotive and aerospace companies need some persuading to move from the formats already entrenched in their industries. "Standardization for the sake of standardization doesn't add value," says Mixer. "If it doesn't reduce costs or improve efficiency, then there isn't a compelling business case."

Meanwhile, CPG manufacturers are seeing their business case for conversion destroyed by the retailers that have been late to convert. Recognizing that they won't be ready in time, some are simply using their muscle to tell manufacturers to keep shipping product with the old bar codes printed on them, says AMR. For a single standard for which there was seven years' notice of the conversion date, the result is surprisingly messy.