Wake Up, Sunrise 2005 Is Almost Here
by Alex Woodie
Radio frequency identification (RFID) is getting lots of attention as a promising new supply chain
technology. But for companies in the North American consumer goods supply chain, there's an equally
important technology deadline on January 1 called 2005 Sunrise, which requires U.S. and Canadian
companies to be able to scan the eight- and 13-digit EAN barcodes used in Europe, as well as the standard
12-digit UPC barcodes. However, a lack of preparedness could spell trouble for both manufacturers and
retailers.
The 2005 Sunrise deadline was formed seven years ago by the <a target="new" href="http://www.uccouncil.org">Uniform Code Council</a> as a way to create a global barcode standard. By eliminating of
duplication of barcodes on goods traveling overseas, it is estimated that $40 billion in savings can be wrung
from the supply chain.
On January 1, 2005, the UCC will stop issuing new UPC barcodes. The only barcodes manufacturers will
be able to request from the UCC after that will be the eight-digit and 13-digit EAN barcodes (the EAN-8
barcode is used on smaller items, such as a pack of <a target="new"
href="http://www.mentos.com">Mentos</a>). Many products sold at retail outlets already sport the new
EAN barcodes, and the biggest, most technologically progressive retailers, like Wal-Mart, are already
compliant with the 2005 Sunrise initiative and are able to scan both EAN and UPC barcodes at check out.
But despite the progress that some companies have made, now with 136 days to go before the deadline,
many retailers of all sizes are not yet compliant, even if they claim to be. Ray Tromba, director of retail
application management systems for <a target="new" href="http://www.ibm.com">IBM</a> Global
Services, discovered this firsthand.
Tromba recently went shopping at a well-known supermarket that claimed to be 2005 Sunrise-compliant,
when he found some balsamic vinegar on the shelf with items marked down for quick sale. The item had an
EAN-8 barcode on it, and for kicks he self-scanned it using one of the scanners supermarkets are now
placing at the ends of aisles. It came up as "item not found."
"It should have recognized the EAN-8, and it didn't," Tromba says. "A number of retailers that have
claimed remediation haven't remediated." Instead of putting the vinegar in his cart and getting in the checkout line, which would have inevitably caused a delay, as the check-out clerk requested a manual price
check, Tromba put it back on the shelf.
The experience at the supermarket backs up what Tromba has come to learn through his job at IBM: that a
good percentage of retailers don't seem very concerned about 2005 Sunrise compliance right now. At best,
there appears to be a leisurely stroll in the general direction of compliance. Tromba says this lack of haste
is partially a result of retailers' belief that manufacturers won't start sending them EAN-labeled goods that
the retailers' UPC-based systems aren't capable of handling.
In July, IBM Global Services announced its Legacy Transformation Services for Retailers. Depending on
the amount of custom code residing in a retailer's merchandising system, it can take upward of an entire
year to make the necessary changes. The changes aren't unlike the field-expansion issues related to the Year
2000 problem, and IBM has a number of tools at its disposal, including recently acquired software from
Trigo. Tromba's group deals mostly with very large tier-1 retailers, and therefore deals mostly with
mainframe systems, although they do see some AS/400s. But it's not a platform issue, and the issues are the
same on AS/400s as they are on mainframe- or Unix-based systems.
While 2005 Sunrise has been looming for seven long years, at many shops it's taking a back seat to other
technologies, like RFID and UCCnet, which supply chain masters like Wal-Mart and Albertson's have
mandated that their largest suppliers implement. There is also a fair degree of confusion over what 2005
Sunrise is and how it relates to the 14-digit global trade identification numbers (GTINs) that RFID and
UCCnet technologies require.
Instead of moving from 12-to-13-digit-capable systems now, and then from 13-to-14-digit-capable systems
sometime in the future, Tromba and IBM recommend that suppliers consider doing all the remediation
work at once.
So when will retailers start getting with the 2005 Sunrise program and make the changes in their systems
that will allow them to sell products with the European barcodes, without causing massive traffic jams in
the check-out lines and angering consumers? Tromba says that this won't happen until retailers have no
choice but to start accepting products with the EAN-13 or EAN-8 barcodes--perhaps, he says, when some
hot new low-carb product hits the market (remember, the UCC won't provide any new UPC barcodes after
January 1). "My estimate is probably mid-year to the second half" of 2005, he says. "I think they should be
thinking about it now."
Scott Langdoc, a supply chain analyst with <a target="new" href="http://www.amrresearch.com">AMR
Research</a>, wonders why retailers and suppliers aren't working more closely together. "Despite
suppliers' desire to tell the retailer that it's the retailer's problem, suppliers will be forced to bend to retailer
power, setting collaboration efforts two steps back," he wrote in a June "Alert Highlight."