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Retailers Association to enforce barcoding by FMCG suppliers

Ramnath Subbu

July 1 fixed as deadline; will help stock monitoring

MUMBAI: T he Retailers Association of India (RAI) along with ECR India has launched the Win-Win 2006 initiative for the FMCG (Fast Moving Consumer Goods) sector to standardise quality and ensure efficient supply chain management in the modern retail trade. The initiative is a mandate by 12 leading Indian retailers under the umbrella of RAI to their suppliers to use barcodes with internationally accepted GS1 (earlier EAN) product identification standards for all FMCG supplies with effect from July 1.

Beyond this date, retailers will not accept supplies from the FMCG suppliers without the GS1 barcodes. Among the signatories to the mandate are Pantaloon, Piramyd, Shoppers' Stop, Dollar Store, Spar International, Subhiksha Trading, Apna Bazaar, HAIKO, Great Wholesale Club, Food World Supermarkets, Dmart and HyperCity Retail, Spencer's Retail, Reliance Petro Marketing, Odyssey Bookstores, Shoprite and Sangam Direct.

Annual fee

All suppliers will have to pay GS1 an annual fee of Rs. 5,000, but larger suppliers will pay a one-time fee of Rs. 20,000, while small-scale suppliers will pay Rs. 5000. "There is no doubt that suppliers will willingly pay the amount once they realise the benefits of the access to information they can enjoy. Today, there is a lag of up to two weeks to get the right information about inventory and goods movement,'' Gibson Vedamani, CEO, RAI, told The Hindu.

Bar-coding started 30 years ago in the developed world to ensure 100 per cent accuracy of data capture at high volumes and high speeds. Besides, it provides real time information on availability of stock and allows for reconciliation of daily sales and cash collections. The modern retail trade operates on thin margins — even large global retailers operate on 1-2 per cent margins — and, thus, every part of the business process is important with supply chain being critical and its efficiency being a differentiating factor.

The deadline is to ensure that the fringe 25 per cent suppliers, not conforming to industry standards, fall in line. "We have informed all retailers and brand owners about the initiative and are spreading awareness about its importance. Till date, there was no uniformity in systems and several in the modern retail trade have their own barcodes,'' said Mr. Vedamani.

"It is important that the retail trade in India is geared up to accept international norms especially when the foreign direct investment is opened up. Globally, GS1 is the de facto standard in retailing,'' said Ravi Mathur, Chief Executive, GS1 India.

The Government has in the past successfully enforced exporters to conform to global standards. According to Mr. Vedamani, even Indian book publishers have complied with the ISDN standards — a GS1 coding system.

"The Ministry of Commerce and Industry and the Ministry of Consumer Affairs should enforce it right across the retail industry. With this, price changes cannot be easily affected, audits are easier and inventory follow-up is much simpler.''

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