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 good news is that most bar code scanning and printing hardware is already compliant. "All scanners are capable of reading EAN-13 unless they're very old," says John Wilson, product manager for bi-optic scanners at NCR.

Most likely, problems will manifest most apparently at the point of sale, where some items may not scan or pricing errors may occur.

"It will be more of a customer-service issue," says Garton. "This could turn around and bite a lot of people who aren't prepared. There could also be additional cost to retailers if they have to temporarily re-label product while they get their systems in order."

Wilson thinks these errors will probably turn up before product even hits the shelves. "At some stage, the supply chain will send an invoice with a 13-digit code in it," says Wilson, "so those numbers will be visible to the system before the bar coded product actually arrives."

"There won't be a tidal wave of EAN codes in January," says Beaith. "Most companies are targeting the end of the year for compliance, but not everyone will be ready."

Compliance Varies

The UCC estimates that most large retailers are already Sunrise compliant, or should be by year's end. It worries, however, about small and mid-size retailers that may either not know about the coding changes or have been putting off compliance work.

"We're starting to see some slightly concerned faces out there," says NCR's Wilson. "I suspect that a lot of people are only now looking at this issue."

Estimates vary on the level of industry compliance. Last year, the Grocery Manufacturers of America (GMA) conducted a survey of its members and found that only 30% of manufacturers were GTIN ready, despite the fact that more than 75% of the respondents had been asked to comply with Sunrise/GTIN requirements by their customers.

"Clearly, there's much work to be done to bring the U.S. consumer-products industry into compliance," says Pam Stegeman, GMA vice president of industry affairs. "As an advocate for brand manufacturers' ability to market their products profitably, GMA recognizes this as a matter of urgency for our members as they move forward to compete globally."

The GMA also found that 55% said their enterprise application does not differentiate the case UPC from the item UPC, a capability that retailers will require in 2005.

Things look slightly better on the retailer side, where Sunrise compliance is a more urgent matter. Research firm Venture Development Corp. (VDC) found that 65% of North American respondents were either using, evaluating or planning to install Sunrise-compliant POS software. The bulk of respondents started scanning 13-digit bar codes in the 2002-2003 timeframe.

Getting Ready

VDC found that more than 30% of compliant companies were able to complete the transition in less than three months. Nearly half said the process took between 6 and 12 months. More than 55% cited cost as the primary challenge in compliance, followed by the large amount of customized software and the large number of systems involved.