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Digitalisation and standardisation must go hand-in-hand

Jaco Voorspuij, Senior Manager Transport & Logistics GS1 Global Office | 26. Aug 2020
7 minutes read

Ultimately, transport and logistics is all about the Goods traded between a Seller and a Buyer, be it in business-to-business (B2B) or business-to-consumer (B2C). Without the goods there would be nothing to transport. Logistics and supply networks today are struggling to meet the demands and expectations of Sellers and Buyers especially when it comes to providing visibility. Simple questions like “Where are my Goods?”, “When will they arrive?” and “Are my Goods still in good condition?” all too often remain unanswered. And there are many reasons to why. 

Collaboration among stakeholders

Typically, there are many stakeholders and logistic service providers (LSP) involved in the transportation (and temporary storage) of Goods from Seller to Buyer. Carriers in e.g. road, rail, air, maritime and inland waterways may be used in the logistics and supply networks carrying the goods. In many cases, there will be handovers between different stakeholders involved. In these handovers, a lot of the information is often lost and the ability to respond to the simple questions is diminished (or even lost).

Digitalisation is a word that is on everybody’s lips right now, also in logistics and supply networks. It is almost like digitalisation must be the solution to all the reasons why the above simple questions go unanswered. A blog post written by Richard Tucker in June covered a fair number of digital technologies. There is no doubt that technology may assist in solving some difficult problems for stakeholders in supply networks. Equally there should be no doubt that the most effective steps toward improving logistic and supply network effectiveness, efficiency and sustainability always involve collaboration among the stakeholders.

There is wide support for the idea that standards are essential for logistics and supply networks. E.g. in the maritime mode organisations like International Taskforce Port Call Optimization, IPCSA, DCSA and others have been calling for and contributing to the development of standards for their area of logistic networks. Similarly, in Air cargo, IATA has been active for quite some time to develop standard related to air cargo globally. IRU focus on the road transportation. UPU covers postal networks.

To enable the smooth flow of goods, the collaboration among the stakeholders must be based on global standards commonly used across end-to-end (Seller-to-Buyer) logistics and supply networks.

gs1 label

Without commonly used standards we will continue to lose information at each of the handovers.
Fortunately, the standards we need to prevent losing information at handovers already exists, have been in wide use for decades and are proven to work extremely well. They just need to be implemented even more widely.

Standards: Foundation for end-to-end collaboration

Traditionally, carriers have managed transportation at the level of the consignment (a collection of transport units or cargo). Typically, they identified the consignment with a proprietary identification key (ID Key) usually a number or code e.g. Air WayBill, CMR, Bill of Lading or other Consignment Note ID. As long as the consignment is never split up along the way, you could know more or less where the goods are. However, each LSP involved currently uses a different consignment ID, making it very hard for Seller or Buyer to get a reliable answer to the question “Where are my goods?”.

It would make much more sense if all LSPs handling the goods on their Seller-to-Buyer journey would use the same ID Key for the collection of goods despatched by the Seller (a shipment in UN/CEFACT and GS1 terminology). That shipment ID Key can easily be passed down to any stakeholder involved in the journey of the goods. That ID Key may then be used by all stakeholders to share or retrieve the information necessary to handle the goods appropriately and to provide tracking information.

The International Standards Organisation provides the standard (ISO 15459-6) intended exactly for that purpose. ISO 15459 ID Keys are unique and unambiguous regardless of the party that issues the ID Keys and assigns them to a specific object or entity. So, an ISO-compliant shipment ID Key issued by one Seller will never clash with an ISO‑compliant shipment ID Key issued by another Seller.That makes the ISO 15459 shipment ID Key ideal as unambiguous identifier commonly used by all parties involved in the shipment’s end-to-end journey. The IT systems used by the parties can use these ID Keys as a reliable way to search for records that help respond to the “Where are my Goods” question. Additionally, cross-border procedures recognise the ISO 15459 shipment ID Key as UCR (Unique Consignment Reference).

In case shipments may get split on their journey, it is no longer feasible to use consignment identifiers to try and keep track of where the goods are. Furthermore, increasingly legislation and regulation are (put) in place that requires unique identification for transport units.

Here too, the ISO 15459 standard provides a perfect solution. The ISO 15459-1 transport unit ID provides a globally unambiguous ID Key. That transport unit ID may be used by any and all stakeholders to keep track of where the transport unit is. Provided the Seller linked the Transport Unit to the Shipment (and preferable also to the Goods inside the transport unit) it becomes feasible to “know where goods are”. Knowing where the transport unit is (even in case the shipment has been split along the journey) you know where the goods contained in the transport unit are.

This is the basis for the below vision.

GS1 barcode
Source GS1

The bottom barcode contains the GS1 SSCC (100% ISO 15459-1 compliant). The small square QR‑barcode is formatted according to the GS1 Scan‑4‑Transport approach, which enables any and all stakeholders to easily read and interpret the contents of that barcode regardless of what other stakeholder created the barcode. The barcode may hold all information required to correctly handle the transport unit even without prior EDI or connection to a remote IT system. The barcode may also contain a URL pointing to a Web service that may provide the latest or more detailed information regarding the transport unit and its contents.

Conclusion

Knowing where the goods are and having access to information to what those goods are, is the foundation for all value-added services that stakeholders may provide in addition to the basic transport & logistic services. All of the technologies mentioned in the blog post mentioned earlier work much better in case commonly used ID Keys are available for those technologies to “connect and process” their data sets.

Therefore, organisations need to adopt well-established and proven global standards to provide a solid foundation for their digitalisation efforts.

 

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