Lines of control

Indian food exporters, if they want to stay in business, will soon have to follow the European General Food Law, which will come into effect from January 1, 2005. The law insists on the traceability of the products down the supply chain.

"Barcodes will become mandatory on all food items meant for exports," says Ravi Mathur, CEO, EAN India. Mathur has been involved in the field of e-commerce, electronic data interchange and supply chain management for over 25 years. In a conversation with Business Standard he says that, in the long run, barcoding will help the Indian retail sector.

Why is barcoding necessary?

Barcoding is necessary because it facilitates global collaborative processes between trading partners. It also enables compliance of international best practices. But more than anything it helps build a lean supply chain.

In today's competitive retail environment cost reductions are necessary to survive. Earlier, product data was captured manually. But now the digitised data goes directly to computer applications. Barcoding eliminates manual errors.

Is EAN the only barcoding organisation?

Yes, we are the only organisation. EAN is a 30-year-old organisation based in Brussels. Our standards are accepted across the globe. In the US we have our partner organisation, Uniform Code Council Inc.

We've formed another not-for-profit organisation, EPC Global Inc, which will offer next generation solutions to take supply chain efficiencies to the next level.

EAN India, an affiliate of the EAN International, was registered in 1996. It is a not-for-profit organisation and represents a joint industry-government collaboration.

Its board of management comprises representatives of chambers of commerce, export bodies, trade federations and the Ministry of Commerce. Across the world it is the industry that runs EAN.

How many companies in the world use barcodes?

Worldwide nearly 1 million companies use the EAN barcodes. In India, the figure is close to 3,500. Indian retail majors such as Foodworld Supermarkets, Giant Wholesale Club, Trinethra Super Retail and Nilgiris Franchise Division have come together and asked their suppliers to use barcodes.

Apparel brands like Levi's, Arrow, John Player, Byford, Louis Philippe and retailers such as Shoppers' Stop, ITC Lifestyle and Piramyd Megastore are working towards implementing the EAN barcode.

How does barcoding help the manufacturer, retailer and the consumer?

Barcoding is an automated process. For the manufacturer it helps in measuring productivity on the shop floors; helps in raw material supply management and also tracks the work in progress. Barcoding ensures on-line stock management, accurate dispatches, efficient product recall and boosts production based on consumption.

For the retailers barcoding means automated point of sales billing which means faster customer check-outs. It also enables easy product tracking and demand forecasting. The consumer benefits with lower product prices, fresher products, especially food items and product availability at all times.

How will the European General Food Law affect food exports to Europe?

The law requires all food manufacturers or suppliers to make their product traceable along the supply chain. It is not just the finished product but also the ingredients. The food category includes vegetables, fruits, meat and marine products. The key word in the law is traceability. Only barcoding the products will help in identifying suppliers and manufacturers.

It's not just food. Soon barcoding will become mandatory for all exporters. Even now very few countries accept goods without barcoding.

How has the Indian bazaar responded to barcoding?

It's not that bad. Major players in the FMCG sector use it widely. Barcoding will become prevalent with the maturing of the Indian retail sector. It is for the industry to realise that barcoding is an efficiency tool and it stands to gain if it is implemented.