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In my last blog post I introduced the topic of responsive supply networks and standards.  To summarize: standards are critical for cross company communication and cross company communication is essential for responsive supply chains. 

To underscore the importance of supply chain standards in building responsive supply networks I’m writing a series of blogs that looks at several specific standards and how they enable RSN.  Since this is the first of a series, I’ll begin with the supply chain standard that almost everyone is familiar with: the barcode. 

Barcodes originated in the grocery industry, and have since expanded to include many consumer facing applications.  Chances are very good that you have a barcode within 5 feet of the monitor that you’re reading this blog post on (the bottom of my laptop has 6).  The original idea was simply to encode a product id that could be automatically read at the checkout counter, instead of the checkout clerk having to remember the price or product code for a particular product.  These IDs were encoded into barcodes, which were affixed to the all the products, which in turn, could be read by point of sale systems to indentify the product and the price.

Most shoppers are familiar with barcodes, but most shoppers aren’t familiar with the barcode standard.  They understand that products are scanned at POS (point of sale) systems when they’re going through the check out lines. But most shoppers don’t (and probably shouldn’t) realize that there is an entire standards organization, i.e. GS1, that defines exactly how those little vertical lines and corresponding numbers should be used to faciliate global commerce. 

Observant readers might have noticed a jump in logic.  Scanning items at a POS device isn’t exactly global commerce.  However, when the barcode is affixed to the product in a manufacturing environment in China, and the product is shipped through a global supply chain (warehouse, 3PL, seller’s DC, retailer’s DC, backroom, frontroom, etc), and the code needs to be read at each step of the way, things become more complicated.  

Given the complexity of global commerce, writing these standards is no small feat.  SAP understands the complexity, participates in the GS1 process, and provides solutions, like the new Business Suite, that support these standards. SAP Business Suite supports GS1 bar code standards, and the associated business process standards, but also provides mechanisms for our customers to extend those standards so that they meet the particular needs of the business relationships between two specific companies.

Barcodes, like other auto-id technologies, provide the basis for a number of business processes that are invaluable: Inventory, demand management, goods receipt, and many more.  As such, barcode support is a critical foundation for innovation in any modern business, and without barcode standards support no business software platform would be complete. 

In my next post, I’ll discuss a related standard technology, RFID, and how the Business Suite 7 support for this standard is enabling business as the speed of change.

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