1. Evolution of Product Identification Standards: From UPC to GTIN to EPC to RFID Richard Randall Business Advisor July 13, 2004 Presented to:

2. © Richard Randall, QRS Corporation, 2004 // 800.872.8255 // www.qrs.com 2 Agenda Update on QRS Product Identification Standards –History of the Barcode and UPC –Current utilization (UPC and EAN) –Clarification on “Sunrise 2005” and GTIN –Future – Electronic Product Code (EPC) and RFID Update on UCCnet –Evolving to the Global Data Synchronization Network (GDSN) –Item Data vs. Instance Data –EPCglobal Questions

3. © Richard Randall, QRS Corporation, 2004 // 800.872.8255 // www.qrs.com 3 Who is QRS? Founded in 1988, only QRS gives retailers and marketers/manufacturers the ability to connect, transact, collaborate and differentiate Full suite of collaborative commerce solutions for retail industry –Global data synchronization –Industry and retail mandate compliance –Transaction outsourcing –Global trade management –Market intelligence More than 10,000 retail industry customers rely on QRS to improve supply chain performance and brand equity “With QRS we have reduced order errors and cycle times, which translates to reduced costs and better service for our customers.” — Yusef Akyuz, CIO The Stride Rite Corporation

4. © Richard Randall, QRS Corporation, 2004 // 800.872.8255 // www.qrs.com 4 What’s new with QRS? Since we last met… Introduced two new Product Information Management (PIM) software solutions –QRS IMPACT™ –QRS QuickSync™ June 17 th announcement QRS to be acquired by JDA

5. © Richard Randall, QRS Corporation, 2004 // 800.872.8255 // www.qrs.com 5 History of the Barcode and the UPC 1932Harvard graduate student, Wallace Flint’s “punch card” project. 1948Bernard Silver & Norman Woodland, graduate students at Drexel Institute of Technology respond to a local food chain store’s request for a method to automatically read product information at store checkout. 1949Silver and Woodland filed a patent application for the “Classifying Apparatus and Method” for “article classification…through the medium of identifying patterns,” which was issued in 1952. 1966Barcode first used commercially by Kroger based on a concentric ring pattern, but soon realized that there would have to be industry standards. 1969The NAFC contracted for the development of UGPIC. 1973The IBM proposal for the UPC, developed by George Laurer, was adopted by the NAFC. 1974The first UPC “scanned” was a pack Wrigley’s Gum at Marsh’s supermarket in Troy, Ohio. >70’sWork with competing formats such as magnetic strip and OCR. 1981Barcode adoption cemented by DOD requirement for marking all products sold to the US military.

6. © Richard Randall, QRS Corporation, 2004 // 800.872.8255 // www.qrs.com 6 Components of a UPC Number System Character Manufacturer Number Unique Item Reference Number to Color/Size Level 5-2 digits Mod-10 Checkdigit Company Prefix (Block ID) 6-9 digits  Eventually evolved to the EAN-13, where first 3 digits are the Country Code. (North America is 000-099.)  And now, the GTIN-14 where first digit is a “Pack Indicator.”

7. © Richard Randall, QRS Corporation, 2004 // 800.872.8255 // www.qrs.com 7 Pre-pack UPC-12:123456 00721 5 GTIN-14:00 123456 00721 5 GTIN-14 Usage The first digit of a GTIN-14 is a level of packing indicator A higher level pack of a single UPC can be assigned a “Case GTIN:” –Where the root of the Case GTIN is the lower level UPC –Where the first digit of the Case GTIN is not “0” or “9”* –And the checkdigit has been re- calculated appropriately A case or higher pack level may be assigned a new UPC (Pre-Pack UPC), or if case is homogeneous (only 1 UPC in the case), then a “Case GTIN” (where the first digit is not “0” or “9”) can be assigned to the case *“9” is reserved for variable weight/measure items Widget X Case of 12 Widget X’s GTIN-14:30 123456 00001 9 UPC-12: 123456 00001 8 GTIN-14:00 123456 00001 8 Pallet of 4 cases of Widget X or Case GTIN-14:10 123456 00001 5 Note:  If a GTIN-14 begins with a zero, the number is actually one of the other, shorter GTIN data structures.  The actual GTIN type may be determined by the number of leading zeros on a GTIN-14.

8. © Richard Randall, QRS Corporation, 2004 // 800.872.8255 // www.qrs.com 8 Clarification on “Sunrise 2005” & GTIN Technically, the UCC’s Sunrise 2005 states that all North American retailers should be able to handle the EAN by January 1, 2005 However, while making changes to systems and hardware, should go all the way to 14-digits for the GTIN Technically, no “sunrise date” for supporting the GTIN-14 has been issued Note: The consumer level unit will always be marked with the UPC or EAN symbology. Although the number may be stored in a database or transmitted in EDI in a 14-digit GTIN format, the consumer unit will always be marked with the applicable UPC or EAN format. In general, POS hardware and software will not need to be modified to support the GTIN-14 format.

9. © Richard Randall, QRS Corporation, 2004 // 800.872.8255 // www.qrs.com 9 The GTIN “Family” Global Trade Item Numbers include: Existing –UPC (UCC-12) –EAN (EAN/UCC-13) –EAN/UCC-8 –SCC-14 (ITF-14) New (2005 Sunrise) –GTIN-14 (EAN/UCC-14) 14-digit format for database storage: 00123456789012 01234567890123 00000012345678 12345678901234

10. © Richard Randall, QRS Corporation, 2004 // 800.872.8255 // www.qrs.com 10 “Item” Data vs. “Instance” Data An “item” is represented by a UPC/EAN/GTIN An individual copy of an item, is an “instance” of that item To identify individual “instances” of an item, they need to be serialized – each instance gets assigned its own serial number Necessary for RFID to work – if RFID only had the UPC imbedded, how could the RFID receiver identify whether there were 1,000 instances of an item, or whether it just heard the same one item 1,000 times?

11. © Richard Randall, QRS Corporation, 2004 // 800.872.8255 // www.qrs.com 11 RFID isn’t new Over 60 years old – used by the British in WWII to identify their aircraft More recently, has been used to track: –Soldiers in war zones –Patients in hospitals –Airfreight parcels –Toll roads & bridges (FasTrack San Francisco, E-ZPass New York, etc.) Benefit of RFID over UPC/Barcode RFID is radio versus UPC/Barcode which is optical – can process items in bulk rather than scanning each individually Then why hasn’t it caught on? Cost Volume of data Competing standards

12. © Richard Randall, QRS Corporation, 2004 // 800.872.8255 // www.qrs.com 12 Industry Direction: GTIN  EPC  RFID GTIN – Global Trade Item Number Format supports EAN-8, UPC-12, EAN-13 and Case-GTIN-14. Used to identify an item. EPC – Electronic Product Code Is a GTIN with a serial number (or SGTIN) plus some additional data attributes. Used to identify an “instance” of an item. RFID – Radio Frequency Identification A radio transmitter chip attached to items for identification purposes. Chip is programmed with the EPC. Format of a 96-Bit EPC/RFID: Header 8 bit Filter Value 3 bit Partition 3 bit EPC Manager # (UPC Block/Co Prefix) 20-40 bits Object Class (Item Reference) 24-4 bits Serial # 38 bit GTIN

13. © Richard Randall, QRS Corporation, 2004 // 800.872.8255 // www.qrs.com 13 How “move” item data?... Historically QRSCatalogue Vendors                 Retailers

14. © Richard Randall, QRS Corporation, 2004 // 800.872.8255 // www.qrs.com 14 How “move” item data?... UCCnet QRSCatalogue Vendors                      Retailers                OtherCatalogueOtherCatalogue UCCnet OtherCatalogue Source Datapools Global Registry Recipient Datapools Physically load 35-160 attributes per item Current UCCnet

15. © Richard Randall, QRS Corporation, 2004 // 800.872.8255 // www.qrs.com 15 How “move” item data?... UCCnet QRSCatalogue Vendors                      Retailers                OtherCatalogueOtherCatalogue UCCnet OtherCatalogue Source Datapools Global Registry Recipient Datapools Current UCCnetNew UCCnet (8/04) QRSCatalogue      OtherCatalogue UCCGDSN OtherCatalogueUCCnet Physically load 35-160 attributes per item Only register 8 reference attributes

16. © Richard Randall, QRS Corporation, 2004 // 800.872.8255 // www.qrs.com 16 How move “instance” data? First, have to know item data Then, could move item data in Ship Notice (ASN) Or, could wait until the actual individual items are received and simply “read/hear” them then (but could not query on their status until received) Or, have a “global router” to direct you to individual “instance” databases The last alternative is what is being promoted by the UCC, and their affiliate EPCglobal

17. © Richard Randall, QRS Corporation, 2004 // 800.872.8255 // www.qrs.com 17 How move “instance” data?... EPCglobal LocalRouter          LocalRouter EPCglobal LocalRouterLocalRouter          A completely separate network from the UCCnet/Global Data Synchronization Network, which is for “item” data. The UCC’s EPCglobal network is for finding databases that have information on specific “instances” of an item. Item data includes things such as: Product/Model # GTIN Size Color Flavor Instance data includes things such as: Date of manufacture Lot Expiration date Country of origin Expiration date Highest temperature reached How long in a particular warehouse

18. © Richard Randall, QRS Corporation, 2004 // 800.872.8255 // www.qrs.com 18 Why do we need an “instance” data network? We don’t Unless we want… –Refrigerators that tell you when you have a carton of milk about to expire –You want a washing machine to set the cycle and temperature automatically based on the contents –You want to know if an individual item has a safety recall Net is, it is a necessary foundation for future applications

19. © Richard Randall, QRS Corporation, 2004 // 800.872.8255 // www.qrs.com 19 So, where are we with RFID? Wal-Mart top 100 vendor piloting on cases/pallets –Driving standards and solutions –Forrester estimates at a cost of $9M per vendor per year Standards will evolve and chip prices will come down Privacy issues to be resolved What is “real” business benefit? Many years off before RFID at product level for average consumer goods – will probably be earlier adoption in high ticket goods, that are already serialized, such as cars, appliances, consumer electronics, etc. Have to effectively manage item data before moving to instance data and RFID

20. © Richard Randall, QRS Corporation, 2004 // 800.872.8255 // www.qrs.com 20 Q & A For more information – Web:www.qrs.com Phone:800.UPC.TALK (800.872.8255) E-mail:Salessales@qrs.com Supportcshelp@qrs.com Careerscareers@qrs.com Alliancesalliances@qrs.com Richard Randall, QRS Business Advisor: 510-215-3765 rrandall@qrs.com Thank you!