The Keys to Compliance

Bar coding is just the beginning- you can meet your customers' compliance mandates and improve your business practices.

In pursuit of speedy data entry, data accuracy, system efficiency, real-time information, and cost reductions, more companies are taking advantage of bar code scanning for data entry and electronic data interchange (EDI) to communicate with trading partners.

These developments, in tandem with the increased implementation of standards and specifications in a growing number of industries, affect the entire supply chain, from the raw materials supplier to the end-use point. If, for example, a retailer wants to automate operations, this has an impact on the manufacturer, who must now bar code each item, carton, and pallet. The manufacturer will, in turn, impose similar requirements on its raw materials suppliers.

The key for any company required to provide bar codes is not to view it as an expense of doing business. Compliance labeling improves the supplier/customer relationship by benefitting both parties. Bar codes permit trading partners to have timely, accurate data to ensure that orders are filled correctly from either a smaller inventory or no inventory at all. Bar codes make EDI possible, so trading partners can electronically place orders, send invoices, and receive advance ship notices. EDI lets everyone in the supply chain react quickly, allowing for reduced inventories, stock replenishment based on sales, and, most important, reduced costs.

If you take advantage of bar coding and EDI, instead of using it to simply label product before it goes out the door to your customer, you can streamline your operation into a more efficient, profitable, and competitive business.

There are currently a number of compliance mandates. Typically, industry specifications, such as those issued by the Uniform Code Council (UCC) for the retail sector and the Automotive Industry Action Group (AIAG) for the automotive industry, form the basis from which specific compliance mandates are drafted. For example, the UCC issues the Code 128 Serial Shipping Container specification, and then companies like Wal-Mart and Kmart issue their own compliance mandates to their suppliers based on the UCC specification (see Figure 1). This allows suppliers who have multiple customers to more easily accommodate the mandate.

The question asked by a supplier, be it a fastener manufacturer supplying the automotive industry or a small specialty shop supplying the retail sector, is, “How do I go about complying and in what order should I do things?”

Compliance labeling is not just a matter of purchasing some equipment and labels and placing them on outgoing products on the shipping dock. Information must be gathered, encoded into specific bar codes, tracked, and sent via EDI to your customers. Therefore, the first thing that you should do is form a project team with members representing all functions that will be involved (e.g., operations, MIS, shipping).

Next, make sure team members have a copy of the specifications and a general understanding of them. They also should be aware of their individual responsibilities for successful compliance. Information and guidance can be obtained from your customer, or the AIAG (313) 358-3570, UCC (513) 435-3870, and AIM (412) 963-8588.

Once you are familiar with the requirements and aware of your compliance deadline, contact potential vendors who can assist you both during the initial stages of learning the requirements and when you begin determining the best methodology for your business. Look at specific areas of your business that will be affected. Will you need to provide labels for individual products (Figure 2), cartons (Figure 3), shipping (Figure 4), or some combination of these?

Then map out a time line and verify compliance deadlines for various customers and requirements. Involve employees who are personally affected by changes in your labeling operation early on, both for their input, as well as to be certain they understand what changes are occurring and why.

When the project is underway, select your labeling vendor(s). Then concentrate on providing a bar code label per your customer’s specification by the deadline. Following are key considerations for compliance labels. Here is where your chosen vendor(s) can help.

What type of label is needed? Adhesive, facesheet? What is it being applied to? What are the size requirements?

• What information is being bar coded? What symbology is specified? What printer resolution will be required to meet the specification? Are certain print technologies listed (again, see Figure 4)?

• Where is the label being placed—on the side or the top? Does it have to be located a certain distance from the corner? Is more than one label required? Will you be applying labels manually or with automatic application equipment?

• What software is needed and where will label data come from? Do you need custom or “canned” software? What platform will be used: PC, midrange, etc.? Will you need to tie back to a host with the information generated by or during the labeling process?

With your labeling operation in place, establish a plan for producing and submitting samples to your customer for approval, and establish and implement a bar code quality control program to ensure that specifications are continuously met. Once you’re supplying customers with in-spec bar code labels, you’re ready to move to any subsequent phase, whether incorporating EDI, complying with another customer, or using bar codes in your own business.


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