Why Logistic Service Providers should embrace standardisation

Standards
in Transport & Logistics
Logistic Service Providers like DHL
should embrace Standardization (on GS1)
Sept 10th 2013

Why LSP should embrace open standards 10th September2013 Page 2
Introduction Jaco Voorspuij
 APICS Certified Supply Chain Professional (CSCP)
 Approximately 25 years of experience in all aspects of Logistics
Over 17 years Warehousing, Transportation (Air, Road, Express,
Ocean) and Supply Chain Management
as well as circa 7 years in Production & Manufacturing.
 Currently working with the DHL Supply Chain Division (Europe).
 Responsible for the design of Integrated IT Solutions to support
complex integrated Logistics services (including warehousing and
transportation services).
 Responsible for (and supported) many dozens of warehousing and
transportation management systems implementations of about a
dozen different WMS and TMS providers.
 Co-chair global GS1 Transport & Logistics Leadership Team
 Co-chair for eCom Logistics Standards Work Group.

Table of contents
 Introduction to open standards
 What is GS1 (in a nutshell)?
 How do open standards align with DHL Strategy 2015?
 Some Key information on link Open standards and Supply Chain excellence
 Conclusions

Introduction to open standards
 An open standard is a standard that is publicly available and has various
rights to use associated with it, and may also have various properties of
how it was designed (e.g. open process).
 There are a number of definitions of open standards which emphasize different
aspects of openness including:
 openness of the resulting specification,
 openness of the drafting process,
 ownership of rights in the standard.
Compare this to
There are many “standards” that are pushed by individual commercial companies that
have been widely adopted but these proprietary standards ultimately are controlled
(and serve the interests) of the single owning company.

What is GS1?
 GS1 is a not-for-profit international organisation that develops global standards and
solutions to improve the efficiency and visibility of supply chains across industry
sectors.
 GS1 engages a global community of trading partners, industry organisations and
technology providers to understand their business needs (both current and future).
 GS1 develops its system of standards and solutions in response to these needs.
 GS1 is driven by over 1 Million user companies, which execute more than 6 Billion
transaction per day. The user companies operate in over 150 countries world wide.
GS1 has local Member Organisations (support offices) in over 110 countries world wide.
 GS1 provides a System of Open Standards (SoS)
GS1, the worlds leading and most widely adopted System of Standards

Who is already engaged in the GS1 System of Standards?

LSP engaged in the GS1 System of Standards

GS1 provides a comprehensive System of Standards
for Logistics Chains
GS1 ID Keys ensure
consistent identification
of objects and parties
across all participants in
Logistics Chains
(forward and reverse).
GS1 barcodes and RFID
standards enable easy
capture of the ID Keys
everywhere.
GS1 Systems
Integration standards
enable easy exchange
of information between
SC partners using the ID
keys and barcode/RFID
standards
Leveraging global standards to reduce cost, complexity
and support interoperability across the supply chain
DataMatrix GS1-128 Logistic EPC HF EPC UHF
Label Gen 1 Gen 2

Identify:
Key Concepts DHL experience / benefits
 SSCC identifies Logistic Units end-to-end.
End-to-end use of the same SSCC eliminates
unnecessary relabeling and other wasteful
activities
 GLN (Global Location Numbers) identify parties
and locations such as legal entities, warehouse
locations, terminals (air/sea/rail), yards, collection
/ drop-off points and much more.
 GTIN (EAN) identifies Product (e.g. on Shop
shelves) unambiguously regardless of who is
“owning” the GTIN.
 GSIN and GINC identify shipments and
consignments independently from Logistic
Service Provider executing Transport (or
warehousing) services. GSIN and GINC allow
tracking & management of shipments and
consignments without numerous (sometimes)
complex translations.
 DSC generate SSCC on behalf of dozens of
Clients (e.g. Unilever, Mars and Colgate).
Express allow SSCC as Parcel-ID providing
tracking advantage over most competitors.
 DHL have GLN for several legal entities and some
physical site locations avoiding confusion over
involved parties or locations. We should use
GLN in more areas e.g. Master Data Management.
 DSC can work with GTIN “natively” in warehousing
(eliminating error-prone translations of Product-ID).
Native GTIN adoption should be increased.
 DSC started to implement GSIN and GINC with a
number of Logistic Services Clients (e.g. 3M) in a
Collaborative Logistics environment with multiple
other LSP also. Clearly independency of LSP
and LSC specific identification schemes is of
paramount importance in such Collaborative
models.
With GS1 standards you can manage complex logistic chains with
just a few identification keys you share with logistics partners.

Manage entire complex Logistics Chains with Only a few Keys

Capture:
• GS1 linear barcodes such EAN-13,
GS1 128 are widely adopted
for “carrying” data.
• Standard International Logistics Label
(STILL)
• Developed in collaboration by
a range of LSP including DHL
• STILL provides the basis for re-use
of labels across Logistics Chains
avoiding wasteful relabeling activities.
• GS1 2D barcodes such as data matrix
are widely adopted where large
amounts of info needs to be captured
and/or checked.
• GS1 standards (EPCglobal) are
at the heart of all RFID
implementations.
• DSC routinely use GS1 barcode standards to
convey i.e. Product, Lot, Expire Date.
We also read countless GS1 barcodes.
• DHL widely support GS1 STILL standard:
• Express labels comply entirely
• Freight labels (largely) comply with STILL.
• DSC Warehouses routinely generate STILL
compliant labels for Despatch.
• In-house labels mostly “proprietary”.
• LS&HC use DataMatrix to increase both
process control and efficiency. <<movie>>
• DSC and DHL Freight use RFID for
Fashion and Automotive Clients for piece-level
tracking and Returnable Assets Management
making DHL a front-runner in this area.
(00)3 4210201 0202 126108
GS1 Data Carrier standards: a cornerstone of
World Class Logistic operations in decades past and future.

Share:
• Driven by Logistics Interoperability Model
• Develops a framework of common
business processes and related data
communication interchanges
• Transactional messaging through
EANCOM = an enhancement on EDIFACT
GS1 XML = likely most powerful and up-to-
date XML messaging standard today.
• EPCIS accepted as “the standard” to share
event information (What, Where, When, Why)
linked to LU and Item-level “Captured” from
Barcodes, RFID or other Data Carriers.
• GDS widely used among Manufacturers and
Retailers to share Product Information.
In effect a distributed “database” to share
relevant data with authorised partners.
No need for point-to-point communications
• DHL provided significant input from both WH
and TM background to ensure we can easily
adopt GS1 standards for most (close to all) of our
logistics services and operations.
• DHL and Unilever deployed GS1 XML for
standardised integration for Warehousing
processes across many sites.
• DHL developed the InfoBroker for the RIFD-based
Automotive Network in Germany to enable secure
collaboration among several competing
partners (e.g. BMW and Daimler). Solution
providers e.g. Oracle, BT and Zetes following suit.
• DHL (like most LSP !?) not connected to GDS
network. Advantages for LSP participation needs
to be explained.
GS1 information sharing solutions (increasingly) widely recognised
as the most comprehensive and powerful around

LSP generally “sell” these Strategy Statements (or similar).
1. Operational Excellence
We strive to deliver a better quality service to our Clients than the competition.
We design our processes smarter to avoid errors the competition makes.
2. Cost Leadership
We design our processes so we eliminate non value-add activities.
3. Sector Focus
We have in-depth knowledge and understanding of our Clients Industry Sectors and
therefore we are better able to serve the Client than the competition.
4. Strategic Product Replication
We deploy our best practices and supporting IT solutions developed based on
extensive experience to the benefit of our Client.
Many LSP try to achieve these strategic objectives
using “proprietary” tools only.
GS1 will enable you to achieve these strategic goals to a level
well beyond what the existing, often proprietary solution can support

How do standards contribute (1)?
Operational Excellence
Improve process quality due to effective use of GS1’s Identify, Capture & Share
methodology:
1. Use of the same key-values in partner systems eliminates the need for
conversion tables and prevents associated errors.
2. Use of open and common standards for keys, labels (data carriers) and Systems
Integration and common “vocabulary” reduces the margin for misunderstanding
when defining and improving processes that involve multiple partners.
3. Use of Standard International Logistics Label and implementation guidelines
reduces variability and confusion for Transport and Warehousing operators.
They can now work more quickly and still make fewer errors.
4. Use of GS1 ID Keys and STILL eliminates the need for unnecessary activities
e.g. attaching proprietary labels, with proprietary Part Codes and proprietary LU
identification, that increase chances of errors.

Cost Leadership
Eliminate waste from the Logistics Chain though use of GS1 standards
 Remove non-value-add work e.g. Re-labeling, Re-keying , Unnecessary Use of
Proprietary Keys (e.g. Product data, LU identification),
 Avoid errors, avoid Costs.
 ALL users benefit from Enhanced Standards (allowing more efficient processes).
 GS1 standards and guidelines have already solved your efficiency problem
(in many cases).
Billions Wasted through lack of collaboration.
• Proprietary Object & Entity identification greatly
complicates collaboration.
• Independent facilitators for Collaborative
Networks are emerging to enable collaboration
across competitors.
• Collaborative Networks all based on use of
INDEPENDENT standards.
• LSC will favour Collaborative Networks (lower
cost)

Sector Focus
LSP must understand, support and actively endorse
Industry Sector standards
1. To avoid costly Client proprietary “standards”.
2. To be credible as a partner and expert
using the right language.
3. To be easier to do business with for the Client.
4. To seamlessly align with Sector best practices .
Industry standards often use various GS1 standards.
Industry Sectors will have their specific way to use the
standards and they may include elements from other
standards to cater for the Sector needs.
Understand GS1 standards,
Understand Sector standards

Strategic Product Replication
Implement replicable, low risk, cost-effective, swift and smooth business (IT
and operational) solutions to Clients.
1. GS1 System of Standards (SoS) provides key building blocks for integration and
processes that cross multiple companies.
2. Combination of standards for a given Strategic Product may vary per Product or
Sector
GS1 SoS is layered :
• Use cross-sector standards across
multiple Strategic Products where
possible.
• Use sector specific standards where
necessary .

Key facts on use of GS1 standards and
Supply Chain Excellence
Leaders: Top 20% Performers Followers: Bottom 80%
Only 1 in 25 (4%) IN ERROR on outbound Deliveries to
Customers
Every 1 in 9 (11%) IN ERROR on outbound deliveries to
Customers.
Only 1 in 17 (6%) IN ERROR on inbound Orders
received from Suppliers
Every 1 in 8 (13%) IN ERROR on inbound Orders received
from Suppliers.
1 in 3 (33%) has reduced year-on-year landed per unit
cost in 2012
Less than 1 in 5 (18%) has decreased total landed per unit
cost in 2012
1 in 2 (50%) work with five or more LSP. Only 1 in 4 (25%) work with five or more LSP
Only 1 in 5 (20%) does NOT manage to find, within
reasonable time, and access OUTBOUND supply chain
data needed for decision making.
More than 1 in 2 (57%) does NOT manage to find, within
reasonable time, and access OUTBOUND supply chain data
needed for decision making.
Only 1 in 15 (7%) does NOT have online visibility into
INBOUND in-transit shipment status.
1 in 3 (69%) does NOT have online visibility into INBOUND
in-transit shipment status.
ALL LEADERS (100%) are compliant to GS1 standards
and track at the item level.
Only 1 in 4 (25%) are both compliant to GS1 standards and
track at the item level.
6 in 7 (85%) of survey respondents plan to increase their current
level of end-to-end Supply Chain Visibility.
Based on Aberdeen Group Survey; May 2013
149 MNC with international Supply Chains respondents (Logistics Services Clients)
Use of GS1 standards clearly pays off for LSC
LSC will require LSP to adopt these (or lose their business)

Conclusions
 Proprietary standards do NOT lock Clients in;
They Lock LSP out of the Supply Chains they need to be in.
 More and more MNC Clients (will) want/demand end-to-end SC Visibility that spans
ALL participants in the Chain and not just a subset (managed by one LSP).
 These Clients will (start to) select their LSP based on their capabilities to
support the GS1 System of Standards
 Within LSP we use GS1 standards (a lot) but too often Business Development,
Solution Design and Operations are not aware of it.
LSP already use of GS1 standards (though often unawares)
The time for deliberate adoption & deployment is NOW

Why Logistic Service Providers should embrace standardisation

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