Sunrise looms for retailers: North American retailers must start scanning longer bar codes in 2005. Will they be ready?

Frontline Solutions, March, 2004 by Brian Albright

The sky isn't falling, and contrary to rumors, we haven't yet run out of UPC bar code numbers, but retailers are about to undergo a significant change where the familiar bar code is concerned.

Starting January 1, 2005, U.S. and Canadian retailers will be expected to start scanning and processing 8- and 13-digit EAN bar codes at the point of sale, in addition to the 12-digit UPC already in use. This change, dubbed the Sunrise 2005 Initiative by the Uniform Code Council (UCC), means many retailers will have to make enterprisewide database changes and system upgrades before they're compliant.

"You'd better start now," says John Poss, bar code technology manager for Ace Hardware. "This is not a project that's going to be done in 24 hours. You've got to do the up-front system analysis, and you've got to test and monitor those systems as you move forward."

"Now is the time to get ready," says Al Garton, director of channel management at the UCC. "You need time to do testing and to get your hands on some EAN-13 product for scanning. The good news is there's still plenty of time."

International Standards

The bar coding system, managed by the UCC in the U.S. and EAN International elsewhere, has been rapidly expanding. The UCC instituted the Sunrise initiative in 1997 to simplify labeling for companies importing products into North America and to better serve the universe of consumer goods that was outgrowing the 12-digit UPC numbering schema.

Currently, foreign companies importing goods to the U.S. are assigned both an EAN identification number and a UCC number, and they often have to re-label their EAN-marked goods with UPC bar codes. Some retailers, if they handle only a low-volume of EAN-marked goods, deal with those goods on an ad-hoc basis at the point of sale.

Starting next year, the UCC will no longer issue UCC company prefixes to new companies based outside of the U.S. and Canada, which will increase the number of products identified with EAN-8 and EAN-13 symbols. Some U.S and Canadian companies will also be issued company prefixes with lead digits of 10 to 13, which can't be used to create UPCs.

The UCC has also changed the way it assigns company prefixes. Previously, prefixes were limited to 6 digits; now they can range from 6 to 10 digits. Prefixes encoded in the EAN symbols also vary in length. The UCC has also started using prefixes with lead digits of 1, 8 and 9 for new companies.

Companies that currently parse these numbers in their systems must stop doing so or risk sharing incorrect information with their trading partners.

All of this number crunching won't mean much to consumers, but it can create big database headaches if systems are based on 6-digit prefixes, for example.

The biggest impact will be on retailers in the U.S. and Canada. North American manufacturers can continue labeling products with 12-digit UPCs (which are accepted worldwide). However, manufacturers may still have some database work to do if their retail partners want them to use 14-digit Global Trade Item Numbers (GTINs) to identify products for other purposes, such as UCCnet data synchronization. If manufacturers receive products marked with EAN symbols (e.g., some raw materials), they'll need to be Sunrise compliant as well.

"For some companies, this will be bigger than Y2K," says Ted Beaith, principal in the retail consulting group at Agilysis Inc., which provides point-of-sale systems and consulting services to the retail community. "For others, this will be a non-event."

Beyond Sunrise

The UCC is recommending that retailers go beyond the 13-digit requirement of the EAN symbols and set up their systems to process and store 14-digit GTINs, which encompass all of the EAN/UCC codes.

"If you're already making the change to 13 digits, you should really go ahead and move to a 14-digit structure to be prepared for the future," says Garton.

Here, Sunrise intersects with another retail industry initiative, the UCCnet GLOBALregistry, which is designed to help retailers and manufacturers keep their item data synchronized. Synchronization is a costly and time-consuming problem, which eats up billions of dollars annually through incorrect shipments and mismatched invoices. GTINs are assigned for every level of packaging (e.g., items, cases and pallets) and are required for UCCnet data synchronization.

GTIN compliance is also necessary to scan Reduced Space Symbology (RSS) bar codes. The RSS was developed to tag items that are too small for UPCs or require additional point-of-sale data, such as produce, fresh meat and pharmaceuticals. GTIN compliance alone doesn't give you the ability to scan the RSS, though--you also need scanners and printers with RSS capability.

Consequences

So what happens come January 1, 2005, if you aren't ready for Sunrise? Not a whole lot--at first.

"This isn't going to be supply chain Armageddon," says Garton. But glitches could develop in the supply chain anywhere product codes are scanned, as the volume of EAN-marked merchandise increases throughout 2005.