When a company as big as Walmart decides to change the rules in its supply chain, it can have far-reaching effects on suppliers (remember RFID?). This will certainly be the case with the new barcoding rules the company is introducing.
Walmart is introducing changes to shipping case labeling to solve problems that are occurring in the store backrooms. We are told that it is often difficult for associates to quickly find the correct products to deliver to the retail shelves because of incorrect labeling on the boxes. Walmart already mandates an Interleaved 2 of 5 GTIN14 barcode on cases shipped to their distribution centers.
So what does the new Walmart initiative involve?
Walmart’s case barcode mandate currently affects most food items, with exceptions such as produce (where Walmart has already implemented PTI), meat/poultry and fish.
The requirement is for a barcode to be located on all four sides of the case, plus the top – five barcodes in total.
As well as the multiple barcodes, other features that MUST be included are:
Brand name and sub-brand, ideally with brand logo – to help the store associates quickly recognize the case. Like the barcode, this has to be on all four sides and the top flap.
Case quantity and a square where an associate can update the quantity with a sharpie pen – all four sides.
Vendor Stock Number printed on at least one side.
Indication for Single Stock, Shelf Ready/PDQ or Case Cut Capable printed on top flap.
Temperature notice for refrigerated or frozen products on top flap.
Lot Number and Best Buy Date on at least one side – all four sides for refrigerated products. Date format is MM/DD/YYYY (although Walmart’s examples don’t show the date this way).
What About Shrink-wrapped Trays?
For products that are packed into shrink-wrapped corrugated trays, Walmart is asking for the GTIN14 barcode to be flexo printed on all four faces. The rest of the required information can be printed on the tray or onto pressure sensitive labels and applied to the film.
Yes, we understand that having a barcode under the film and trying to scan it isn’t ideal, but that’s the rule at the moment and we were told that labels are not approved for the barcodes.
For trays that have no corrugated to flexo print the barcode, Walmart suggests that suppliers discuss with their Walmart buyer to come up with a plan.
Will These Cases be Walmart Only?
The Walmart folks say they shouldn’t be, the GTIN14 barcode is a GS1 standard and other retailers should be able to use the same cases. Unless those other retailers require GS1 128 barcodes of course.
Walmart has determined (incorrectly as it happens) that the only print technology that can produce reliably scannable barcodes is flexographic printing. Inkjet barcoding seems to be particularly out of favor, having been singled out as producing prints that are illegible or quickly degrade. Labels and laser marking are non-compliant as well. Printing a black barcode on a white label produces the highest scoring and most easy to read barcodes, high-resolution inkjet, laser (using DataLase laser receptive material) and flexo are all very similar from a quality point of view. Of course, we’ve all seen good and bad examples of all these.
Note that the GTIN barcode is the only element of the case where Walmart specifies the print technology. Other variable information (such as dates and lot numbers) can be applied using on-demand technologies.
This is going to cause a huge problem for suppliers and is a step backward in supply chain barcoding. Most companies (other than those with huge volumes of each SKU) use generic cases (often pre-printed with the company logo) and customize them for the particular SKU on their packaging line.
Printing technology such as high-resolution inkjet (which despite Walmart comments to the contrary can produce barcodes that are completely ANSI/GS1 compliant), thermal printing for labels and laser have been refined to the point that they have become standard in most case marking applications.
Forcing suppliers to purchase and manage inventories of pre-printed cases is going to cause a lot of expense to companies where margins are usually already low.
What are Walmart Suppliers Doing?
We’ve had the opportunity to get feedback from a number of companies that ship to the Walmart supply chain. If there is a common theme it is a feeling that the Walmart people have not considered the high costs involved and the disruption introducing a change like this would make.
While some companies have agreed to comply and have ordered their pre-printed cases, others are not rushing into anything and basically waiting to see how things develop.
What should Walmart have done?
To be fair, a lot of the Walmart requirement makes a lot of sense. It is important to have the barcode on both the wide and narrow faces of the case – at the DC, the barcodes are scanned automatically while the long side of the case is facing the scanner on a conveyor. In the store backroom, the cases tend to be packed on shelves with the narrow face facing out to save shelf space. Having the barcode on all four faces makes sure that every case has an accessible barcode through the supply chain.
Walmart already has a solution in the barcode mandate for frozen baked goods which could easily have been expanded.
This specification asks for the GTIN barcode to be printed on a white label (best way to get the most scannable barcodes) that is wrapped around a corner of the case, so the barcode is visible on two faces. The specification recommends two labels, on adjacent corners, to give four face visibility.
The supply chain labeling standards developed by GS1 and used worldwide provide everything that is needed to be able to meet barcode quality standards while also keeping costs low and efficiency high.
My personal view is that the best way for Walmart to improve the barcode experience for workers in their stores would be to make sure suppliers correctly implement the GS1 labeling standards. It would be more cost effective for Walmart suppliers to install barcode systems to check the quality of their barcodes than to move towards pre-printed cases.
There is no excuse for suppliers to ship items with incorrect or poor quality barcodes, regardless of the printing technology used. To steal a Walmart marketing phase, there’s no need to “ROLLBACK” supply chain barcoding to get the results that are needed.
Want another viewpoint? Check out the article by Pat Renolds over at Packaging World or this article at Supply Chain Digest.
There is also an updated Packaging World article that includes an email Q&A session with “Walmart” – if the Q&A is to be believed, Walmart isn’t contemplating any changes at this point.
What do you think of Walmart’s new rule on case coding? Is it going to affect your business? If you ship products to Walmart, are you pushing back or working to get into compliance?
At ID Technology, we can help you get into compliance with the Walmart mandate by applying the variable date/lot codes to your pre-printed cases.
Want to learn more about GS1 Barcodes? Check out the ID Technology Intro to GS1. If you need help with your labeling or barcoding, contact us today at 888-438-3242 Option#3 or you can contact me directly at firstname.lastname@example.org. We’ll get you in touch with one of our ID Technology specialists right in your area.