The Business Role of Classification Lunch & Learn Thursday October 9, 2008

1. The Business Role of ClassificationLunch & LearnThursday October 9, 2008

2. Classification ≠ Identification Product Identification: A coded key - GTIN such that unambiguously identifies a single product SKU Product Classification: putting GTINs into category groups (GPC Brick) according to common characteristics towards a specific goal

3. Why Global Product Classification (GPC)? GTIN GPC ITEM SKU Reference Code Product GROUP Code WHICH product is it? WHAT product is it? ____________ Each GTIN is electronically linked to a unique GPC brick code GPC is a mandatory code in GDSN 00910023712823 10005788

4. Segment = Food/Beverage/Tobacco Top Tier Family = Fruits/Vegetables/Nuts/Seeds 2nd Tier Class = Fruit – Unprepared/Unprocessed 3rd Tier Bottom Tier Many GTINs to One Brick Core ID Key: GTIN:1234567890123C; GLN: 987654321012C; TM:USA GTIN:4567890123456C; GLN:321012987654C TM: UK Basic Trade Item Name: Apple Manufacturer:ZPA Trade Item Name: Banana Manufacturer:ABCDE Category Specific Net Weight:150 grm Best Before Date: 2005-11-30 Net Weight:150 grm Best Before Date: 2005-11-30 TM Specific Brand Name: Freshest Apple Catalogue Price: USD 0.15 Brand Name: Children Banana Catalogue Price: EUR 0.25 Relationship Specific Publication Date:2005-11-01 First Order Date:2005-12-01 Publication Date:2005-10-01 First Order Date:2005-11-01 Manufacturer Specific Target Consumer Gender:Unisex Target Consumer Gender:Children Food Beverage and Tobacco Example Use Classification Hierarchy to find the Category (Brick) Brick Code = 10000003 Brick Description = Fruit – Unprepared/Unprocessed (Shelf Stable) = Classification Category ID Key Formation:WHOLE If Organic:YES If Pitted/Stoned:NO Type of Fruit:APPLE Formation:WHOLE If Organic:NO If Pitted/Stoned:NO Type of Fruit: BANANA Classification Category (Brick) Attributes: SINGLE TRADE ITEM PROPERTIES (Public or Private)

5. Segment = Home Appliances Top Tier Family = Major Domestic Appliances 2nd Tier Class = Major Laundry Appliances 3rd Tier Bottom Tier GTIN:1234567890123C GLN: 987654321012C TM:Germany GTIN:4567890123456C GLN:321012987654C TM: BENELUX Core ID Key: Many GTINs to One Brick Basic Product Name, Width, Height, Net Weight, Gross Weight, Current Depth, Colour Body, Colour Panel, Energy Efficiency Class, Energy Consumption, Noise Level, Washing Performance, Water Consumption, Average Washing Time 40C/60C/90C, Moisture Content % on dry load after max spin, Capacity Cotton, Max Spin Speed Category Specific [Descriptive* non GS1 stds - (Energy Label – CECED] Manufacturer Specific [Technical Features* non GS1 stds –CECED] Wash Optimisation, Foam Control, Balance Control, Water Protection System, Half load option, Pre-Wash, Quick Wash, Special Woollens, Rinse Hold, Delicates/Silk, Tub Material, Drum Material, Filter System, Spin Speed Options, Skip Spin, Self adjusting water level to load, Separate Temperature Control Options, Cold Wash Option, Start Delay Options, Start Delay Time max. (h), Water Plus; Door opening: Button/Handle, Drum Volume, Load size (max.–kg), Hot & Cold Water Intake TM Specific Brand, Catalogue Price, Voltage, Frequency, Plug Type, Test Certificates, Relationship Specific [Communication* non GS1 stds -CECED] Logo fields, Product Images low resolution, Product Images high resolution, Brand Message fields, Feature Messages USP fields, Sales Messages USP fields, After Sales Message USP fields Home Appliances Example Use Classification Hierarchy to find the Category (Brick) = Classification Category ID Key Brick Code = 10001959 Brick Description = Clothes Washers Installation Type:BUILT IN Loading Type: FRONT Type of Clothes Washer: AUTOMATIC Installation Type:FREE STANDING Loading Type: TOP Type of Clothes Washer: SEMI-AUTOMATIC Classification Category (Brick) Attributes: SINGLE TRADE ITEM PROPERTIES (Public or Private)

6. Have you heard this before? Help, I’m overloaded with GTIN level data but starving for category level information

7. $ $ $ $ $ $ Purchasing Purchasing Inventory Inventory Packaging Packaging Warehouse Warehouse Manufacturing Manufacturing Accounting Accounting Distribution Distribution Legal Legal Department Department Marketing Marketing Receiving Receiving Quality Quality Customer Customer Assurance Assurance Service Service Research Research & Development & Development Publications Publications Global Classification Solution Concept Many functions, different classification needs Selling Organizations Buying Organizations Industry Standard Map Internal Product Classifications Map Internal Product Classifications 3rd Party Solution Partners Could Maintain Current Classification Systems by Mapping to Industry Standard

8. GPC UNSPSC UNSPSC UNSPSC Global and Regional classifications Global classifications UN/CPC ISO/ICS UN/ISIC WCO/HS HS GPC GPC NACE CN GPC GPC GPC GPC CPA ANZSIC ANZSCC NAICS CEN/UNECE Regional classifications

9. GPC & Information Flows Flow Source Transmission Recipient 1. WEBFORM Webform Portal Supplier PIM 2. PEER TO PEER Direct XML / EANCOM / X12 Message Supplier PIM 3. GDSN Recipient Data pool Global Data Synchronisation Supplier A Recipient Data pool Source Data pool PIM Recipient Data pool Supplier B Source Data pool Recipient Data pool Source Data pool

10. How GPC Unites the Supply Chain? • When Seller implements GPC, then the GPC Brick ensures the correct recognition of the product category through the extended supply chain and • The Buyer can use the same GPC Brick to route the seller's product information to the right buyer

11. Inventory Planning • Inventory planning and deployment is primarily based on • customer sales and volume, • followed byproduct grouping – GPC! • region or geography and • margin or market share Source: IBM study 2006

12. How GPC will be used? • Manufacturers to guide buyer organisations to their product groups • Retailers • To route new product messages • To find sources of existing products through GDSN • Global benchmark for category management • Governments • To evaluate risks in releasing incoming or outgoing cargo at international borders

13. How the perfect GPC will work? • Be used globally • Include all industry sectors • Be “tuned” to Supply Chain needs • Describe all essential characteristics

14. What User Benefits Brings GPC? • Enables GDSN related processes • Internal, external and network synchronisation processes by organising and validating data • Enables granularity and aggregation internally within a company and between trading partners. • Simplifies matching the publication data with subscription data. • Improves accuracy and integrity of item set-up and maintenance. • Language barriers could be eliminated • Facilitates faster implementation into GDSN • Monthly / quarterly updates at aggregate (Brick) level

15. What User Benefits Brings GPC? – cont. • Accelerates new product introduction • Denotes what type of product it is • If new products come in via GDSN the validation workflow is triggered and the product is routed to the buyer • All externally facing communication that references product data could use GPC such as • Product specs; Price Lists; Shipment and Share Reports; Inventory Positions; Product Image Management; Point of Sale (POS) Data; Shelf Data (plan-o-grams); Joint Business Plans; Order Acquisition & Shipment Status; Consumer Response;

16. What User Benefits Brings GPC? – cont. • Data Management – Product Information Management: • Single source, high quality master data and services; Enter Data Once; Common Data Standards; Single Point of Accountability; Atomic Level Data Aggregation • Data cleansing facilitation (all products going forward should use the appropriate Brick code) • Eliminates redundant activities by avoiding costly mis-matches • Allows mapping to different trading partners or third party solution providers – reducing costs. • Reporting facilitation by using GPC Brick and attributes as an industry standard that will cross all product silos • Enables category management . • Provides an opportunity to group products with category specific product group attributes in catalogues allowing global SKU (Stock Keeping Unit) mix • Allows globally standardised positioning of products • Establish category level product attributes

17. HOW do you eat an elephant?

18. ... take one bite at a time! Clear communication Common understanding GS1 management endorsement Alignment with other non - GS1 standards Training & Education Translation Alignment with other GS1 standards Business Case