The Supply Chain, Numbering Systems and Identifiers

A numbering system needs to be put in place across the supply chain to identify participants and their locations, the items (products and services in their various forms), the processes (rules, treatments, recipes, etc) and the assets.

This can be achieved via the smallest practical number of globally accepted systems of numbering, preferably employing unique and non-meaningful identities. This means that the coding system should not have inbuilt meaning since meaningful numbers/codes imply human recognition rather than computerised data, require extra digits and hence introduce a potential lack of accuracy and higher costs of operation.

Instead, meaning should be derived from associated master data files.

Numbering Systems

The supply chain identity should be a unique, non-meaningful number. For example, the GS1 (formerly EAN) code for an Item (GTIN) is usually 13 numeric digits – 2 for the country numbering authority issuing the right to number within the GS1, 5 for the company doing the numbering of its products, 5 for the particular item, and finally 1 overall check digit for verification purposes. It is important for all parties in each value chain to agree the level of detail at which an Item should be identified, e.g. variants required for production control, distribution management and retail operations need an accepted degree of consistency.

Banks have unique systems for numbering accounts to ensure that money comes from, and goes to, the correct place across the globe. Tracking assets for accounting and maintenance purposes requires each individual asset to have its own unique identifier (UID), comprising an Issuer code and a unique serial number from that issuer.

Identifiers must be unique and non-meaningful

Unfortunately, too many systems do not have unique IDs. For example, in the UK there are many more National Insurance (NI) numbers on file than there are people who could validly use a number. Effective verification systems are essential. Obvious errors in IDs have to be rejected automatically and promptly. Where meaningful alphanumeric codes are used for identification purposes, code maintenance becomes more difficult. While such codes are normally used to aid human recognition, that is also their main source of error. People find such “meaningful” codes easier to interpret; but people are the principal causes of inaccuracy. Also, meaningful codes are longer, and longer codes are more error- prone. These should be largely unnecessary with modern Auto ID and computerised data retrieval systems.

Where each item (or logistics unit) has a high value and/or needs to be tracked individually, each item (or Object) will have a separate number, e.g. an aero engine control unit. Where items are of low individual value or significance, all items which are identical (of the same Class) can have the same number, e.g. a 4-finger Kit Kat for sale in the UK. Information about the item should be stored in a Master Data file. Physical quantities of the same items can be held in a Logistics Unit (e.g. in a case, or a number of cases held on a pallet, or a number of cases or pallets within a container). Unique Class identities can be given to particular Logistics Units, or they can be identified via a Serial Shipping Container Code (SSCC, within the GS1 system).

Product life cycle

Where a product lasts for a long time and is changed during its life, Product Life Cycle Data are held to provide the original specification, all the amendments, and also the current status (within ISO 10303 Computer-interpretable representation and exchange of product manufacturing information).

Software Product Life Cycle

Product Life-cycle

This is particularly relevant for plant and machinery which are maintained and enhanced over time. Clearly, rules for data retention are of great importance for all value chain data.

Identity of logistical units in the supply chain

As stated above, Identities can also refer to Logistics Units, such as a case, pallet or shipping container. These need to be distinguished from the Consignment (or shipment/vehicle load), which will be composed of one or more Logistics Units containing one or more Item IDs. The ID of a Logistics Unit can be cross-referred to a master file containing data about the contents, e.g. the GS1 number of each item contained therein plus corresponding quantities. Here, there is a key role for Auto ID systems to track items across a value chain.

If Logistics Units in the supply chain are being effectively identified and tracked, it is not necessary to identify a consignment/shipment in detail – it is only necessary to know which Logistics Units make up the consignment and to track the largest of these which cannot be tampered with en route (often the containers holding the individual cases). A consignment is therefore similar to an order or delivery, each of which only requires a non-meaningful sequential number for control purposes.

In summary, decisions on what to identify need to be taken carefully and systematically, in conjunction with the roles and uses of Auto ID, Master Data and Dynamic Data Bases.

Identity of items in the supply chain

As much of the related data about an Identity as is practicable should be held in Master Data files. It may also be necessary to print one or more of the following on items in order to facilitate human recognition:

  • Batch Production Code/date of manufacture – this allows the item to be related to data held by the manufacturer about the particular time and circumstance of manufacture.
  • Best Before Date/Use By Date – guidance to the end-user or consumer to support quality standards.
  • Instructions for Use – e.g. how to take/apply a medicine, or how to prepare a foodstuff.
  • Ingredients or Warnings – e.g. “40% alcohol”, “highly toxic”, “contains nuts”.

One of the features of printed data is that they may or may not be read, or they may be misunderstood. Where an Identity can be cross-referred to an accurate Master Data File, the likelihood of error can be substantially reduced by examining both printed and computer information. Nevertheless, where there is a possibility of the printed data and the Master Data differing to a dangerous degree, because the Master Data have been altered subsequent to a particular item’s manufacture, the printed data must reign supreme (e.g. on a drug or foodstuff package). The rule should be to employ standard Identities linked to accurate Master Data Files wherever practicable, but where safety is paramount to use this approach supported by a cross-check with printed data (“both belt and braces”) – for example when administering medicine or maintaining safety-critical systems

Identities relate not only to Items, but also to value chain Participants, including Locations, Roles, etc; Processes; and Assets,

All identities may be structured from a variety of standpoints. For example, the identities of participants in a particular value chain can be viewed in terms of their legal status, or logistical role, or position as a taxpayer or recipient of benefits, or employment status, etc. Indeed, one of the main problems impeding low-cost business and e-business is that value chain participants are identified in so many different and incompatible ways, especially by government departments. Hence much time and cost are wasted by both organisations and government in re-entering the same data and in failing to recognise organisations as being one and the same entity.

If a company could identify itself once to all parts of government, along with its products, countries to be traded with, customers and suppliers, the total cost of doing business would be reduced, the country would become a lower cost and higher customer service economy, government IT costs would be reduced, and modern risk assessment techniques could be applied to those companies and transactions which most merit the attention of the authorities.

Identity of participants in the supply chain

For value chain management purposes, the identity of a participant needs to be related comprehensively to his or her location, so that instructions to act can be specific to a particular location and messages can be accurately addressed. For example, the VAT Registration Number can be used by government (HM Revenue & Customs) to identify many businesses. But not all are VAT registered and the VAT number does not identify each value chain location a business has for production, distribution, ordering, invoicing, accounting, administration, etc.

There needs to be a unique, meaningless code, such as the GS1 Location Code (GLN – 13 digits, similar in structure to the GS1 Item Code). Effective value chain management, along with economic e-enablement, requires each location to have a unique ID, especially for structured communications and for its associated Master Data. Clearly, some Master Data are common to all the locations used by a business. These can be maintained centrally while being made available locally.

Identities for other participants in the supply chain

The number of other identities for participants should be kept to a minimum. For example, the VAT number could be used for all business tax payment and receipt purposes; the bank codes could be used for all commercial payments and receipts for both businesses and individuals; the company registration number could be used for all legal purposes; and the National Insurance number could be used for individuals dealing with government (subject to effective “cleansing” of the identities and related master data).

Most other business IDs should be progressively eliminated and replaced by the Value Chain Management ID – GS1 GLN. Other key IDs would be held in the appropriate Master Data Files to support cross-referencing; these would also hold any key participant classifications, such as type of business/government statistical codes, type of location, occupation of employee/patient, etc.

Data alignment and accuracy

Particularly where data relate to individuals, but also to companies, Data Protection provisions (for security, privacy and secrecy) are important. However, where, for example, a company agrees to a common identity for all its operations and to standardised and aligned master data, it should benefit from lower cost and higher speed business and governmental processes. Master data about both people and organisations becomes much more valuable when it can be linked to dynamic data. Therefore greater effort must be made to ensure that both identities and data are accurate and secure. This is in no way an argument against holding such data. But the job must be done much better than it is done now.

Without rigorous identification of people, companies, products and locations, there cannot be cost-effective, safe and secure operation of either businesses, public services or countries. Most people and businesses want better services at lower total costs. Their concerns are often more to do with the poor ways in which these services and supporting systems have been provided to date than with the principles of providing such services and systems. Many of the key prerequisites for success are those covered in this publication.