Expert Insight: Gilmore's Daily Jab
By Dan Gilmore
Date: July 21, 2009

Supply Chain News: Meeting with VICS on Emerging Retail Carton Labeling Issues


As we Expected, No One Really Knew what was Brewing with these Changing Mandates; We are Optimistic Progress will be Made

SCDigest Materials Handling Editor Cliff Holste and I travelled to Columbus this week to present to the Compliance committee of VICS with regard to retail carton labeling issues.


The meeting came about after we put out an article (see Worrisome Trends in Retail Compliance Labeling Requirements) and video (see Supply Chain Video: New Retail Label Compliance Requirements Worrisome?) on the topic, prior to which we had had some initial dialog with VICS and GS1, two important setters of standards and guidelines in this area. That led later to further research on our part and more dialog with VICS CEO Joe Andraski, and, ultimately, to our presentation yesterday.


See the links above for more details, but in a nutshell, the consumer goods industry is increasingly seeing requirements for variable label placement on cartons of the UCC/GS1-128 serial shipping container labels, rather than in the lower right or anywhere along the long side of the carton in a specific horizontal plane. We are now seeing requirements for specific placement in the middle or on the bottom left of the long side, or on the short side of the carton, or on the top.


In addition, a few retailers are, at least in some cases, requiring that suppliers not have any other additional bar codes on cartons other than that retailer’s GS1-128 label.


The first issue, variable label placement, creates havoc in manual picking operations, as pickers need to somehow know where to put the labels for each customer. It also makes it very difficult for the manufacturer itself to use conveyors, as the labels are now all over the box, making scanning systems difficult, and virtually impossible to use auto print-and-apply to handle the GS1-128 labeling.


The “no other bar code” requirements in effect say a manufacturer can’t even track its own product in manufacturing and distribution.


They both very much threaten existing or potential material handling automation systems. As we have noted, materials handling vendors also have cause for concern.


All this, we believe, is bad for everyone, including retailers. The vast majority of retailers not “wandering off the ranch” may ultimately have their suppliers facing higher costs for the sake of the new requirements from a small percentage of their retail peers.


We have subsequently heard from a number of retail suppliers that are facing these very real challenges, a number of whom provided us with pages of compliance guides and other information to support our presentation.


Our simple mission: raise the awareness of this issue, and hope someone takes some steps to stop what is now a small problem from turning into a major one.


We were really at a “pre-meeting,” since VICS bylaws ban “the press” from any actual meetings. Our presentation featured many “pictures” of actual compliance guide examples, how print-and-apply systems work, and other slides that seemed to help really bring the point home. There were, of course, other topics for the day’s agenda after we left.


The meeting had a relatively small number of retailers participating either in Columbus or over the phone. No manufacturers, but a decent number of materials handling vendors and industry consultants were also present.


I do not think anyone participating was really aware of the emerging issues. Many thanked us for the research and raising the issue up, most I think with genuine concern that there may be a problem here.


After we left, the committee was to discuss our presentation and thoughts on any response or action VICS should pursue related to it. It’s obviously too early to hear back on that yet. I have also sent a couple of ideas to VICS on some things we could do together.


I am optimistic that some effort and progress will be made here. If you are a manufacturer or retailer affected or concerned about this issue, would love to have you in the boat. I think we really need some retailers to emphasize to their peers why some of these developments contrary to the guidelines or common sense we have operated under for many years are not good for anyone.


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Dan Gilmore is the editor of Supply Chain Digest.

Gilmore Says:

I do not think anyone participating was really aware of the emerging issues. Many thanked us for the research and raising the issue up, most I think with genuine concern there may be a problem here.

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