- Welcome to MIT Supply Chain Frontiers presented by the MIT Center for Transportation and Logistics. I'm your host, Benjy Kantor. Each episode of Supply Chain Frontiers features center researchers and staff or experts from industry for in-depth conversations about supply chain management, logistics, education, and beyond. First, MIT CTL offers a variety of educational programs for graduate students, seasoned industry professionals, and anyone at any level looking to learn more about the supply chain and logistics domains. To find out more about all of CTL's educational offerings, visit ctl.mit.edu/education. Today, we welcome Melanie Nuce-Hilton of GS1 US, a not-for-profit information standards organization. Celebrating its 50th anniversary, GS1 US has 300,000 plus members and GS1 standards are the most widely-used supply chain standards in the world. Based in Ewing, New Jersey, GS1 US administers the universal product code barcode, as well as other information standards and data carriers. Our conversation today dives into everything you wanted to know about the UPC barcode and more, how it's shaped supply chains in the past 50 years, and where we can expect it to take us from here. Melanie Nuce-Hilton is senior vice President for innovation and partnerships at GS1 US. Her background in retail technology stretches back 30 years, which she draws on at GS1 US to investigate new technologies, partnerships, and business opportunities to increase the relevance and reach of GS1 standards. Melanie oversees the exploration of collaboration opportunities to help businesses leverage emerging technologies, including the Internet of Things, blockchain, artificial intelligence, and computer vision to address multiple business process challenges such as autonomous retail and circular economy. Melanie, welcome to CTL's Supply Chain Frontiers. Thanks for joining us.

- Yes, thank you for having me.

- I think it'd be great to start, for the lay people that are listening, for myself included, I would love to start with a general history of GS1 and GS1 US, and even a formal history of barcodes. Like, what has been the role of the barcode in retail and the supply chain for the last 50 years?

- Sure. I mean the thing is, you know, when you look back on 50 years and you think of a technology that's really endured, the one dimensional barcode is a pretty fascinating study. And now that we're past 50 years, lots of people have been kind of investigating how did it all begin? But the truth is it was actually a group of grocers and consumer packaged goods brands that came together. In 1973, they had some formal ad hoc committee of the Uniform Grocery Code Council that was assessing how do you improve efficiency at checkout, because it was all manual keying in of prices at that time, highly inefficient, also very error prone. And so at the time that this was going on, there had also been this investigation into barcode technology, and it all converged. And so they selected the linear barcode. Originally, there are some, actually, some documentaries on this where they originally were looking at round barcodes that kind of, you know, look like a bullseye. And there's even a quote from one of the executives saying, we predicted that there will be no more than 100,000 unique codes in existence in the future. It's kind of like how people treated the internet, right? The worldwide web when it first came out. I'm like, who's gonna want that? So, I mean, when you think now how far we've come and serialization, and even IOT, right? Billions and billions of objects being uniquely identified. It was very pioneering technology. But so they decided on this in 1973, and then in 1974, the very first UPCA barcode was scanned. It was on a 10 pack of Wrigley's Juicy Fruit Gum at a Marsh Supermarket in Troy, Ohio on June 26th. So next year, while we're celebrating 50 years of GS1 US in 2023, 2024 is truly the 50 year mark when all of this took place. So, you know, I think you're seeing that barcodes are being scanned over 10 billion times a day all over the world now, at every level, not just at point of sale, but in logistics environments, we're tagging pallets, cases, even containers, and we've added other technologies on top of that as well, but the whole principle behind that was unique identification. And it was something that we really didn't have before the days, maybe many of the listeners are too young to remember, but those price stickers that somebody in the back of the store was using a gun to attach little $1.49 price stickers to everything.

- In that early seventies time period, there was this sort of more mass general thinking about logistics and about tracking and about how things are going to move in this world in a way that folks hadn't been thinking about in the past. So I'm just kind of curious like how, from that pack of Wrigley gum, which is still being sold, you know, and maybe using, is it using the same barcode? I don't know. How did GS1 become the standard or the standard bearer from that to today?

- Yes, well that Uniform Grocery Code Council, they dropped the word grocery in the Uniform Code Council. Uniform Product Code Council became the Uniform Code Council, which eventually became GS1. So we've had lots of identity crises over the years, but luckily, we're still focused on unique identification through all of that. But, you know, I think that the principle use case of going deep at the checkout, looking up the correct price, right? Ensuring, I think that was a profitability play, it was an accuracy play, at that time, to your point, Benjy, it wasn't an inventory play at the base, but it was really, we've gotta do this at scale in order to achieve benefits. So bringing GS1 US, what was the Uniform Code Council into the conversation, we have, for all of our years of history, been that broker in the middle of industry that provides that safe harbor, we don't talk about competitive issues, we only talk about collaborative issues, and we're focused on how can we drive adoption at scale from which all of industry can benefit. And what's so interesting is even the foresight, maybe, that the original council members were thinking of and coming up with this notion of a technology to do automated price lookup, they probably didn't foresee just the volume of goods or the lengths to which they would travel in the future supply chain, but they were laying the foundation of, what I would say, is three principles, identify something, give it a unique identity, capture it in a data carrier that can be read by a machine so that you can create automation, and share data about it so that you can actually build trading partnership.

- Well, and you mentioned something, I think, is sort of at the crux of what you're working on, which is this adoption at scale, with that being the operative term, like, in a world where there are so many products being created digitally, physically, faster than a barcode can be slapped on them, perhaps, how do you do that? How does adoption at scale happen?

- Lots of heavy lifting. You know, I think, for us, it's remembering that we are truly the evangelists of GS1 standards. Those of us who work with GS1 US is one of 116 member organizations of GS1 all over the world. So we focus on local implementation and support in the US, but we have counterparts that do that everywhere else on the globe as well. And while many companies have the job of solving problems for the enterprise, we have the job of solving problems for the industry. So the hat we wear is a unique hat. We ask our partners who come to the table to wear that same unique hat, right? Take off your enterprise hat, put your industry hat on. But we also work with the community of solution providers that bring the standards to life. I always say standards are only as good as the technology that brings them to life. So a big part of our effort around scale is educating the technology provider community, one, on the value of standards, and embedding standards into their commercial offerings. My boss, our CEO, he likes to say, collaborate to compete. So on the compete side, hey, mister and miss solution provider, go out, take what you're building, embed standards in it, and guess what, it's gonna get you an audience with the biggest companies in the world, because anything crossing point of sale at retail for the last 50 years has carried a GS1 barcode on it. And in fact, all the back office functions in the supply chain is it's got a lot of GS1 in there as well. So for solution providers, it's teaching them the value of the standard, how to embed it, and then the goal of sort of that matchmaking service, bringing technology providers to the table, bringing industry users to the table, so they can meet each other and then decide how they wanna implement for business benefit, not just the standard, but the technology that's being offered, that does, I like to call it standards plus, because any technology provider knows standard is my baseline, but my plus is where I make my money, and they become those additional advocates beyond just our team, 'cause we're a small team, in the US, we're about 200 people. Compared to the customers we serve, we're small. And so they, as voices of advocacy and support, are critical to the success of the scale piece.

- And we're talking about how this small sort of unit of tracking fits into a really big grand scheme. But to sort of bring it back to a practical standpoint, if I am, from the very basic use of this barcode, I guess the question is who is the customer for GS1 US? Is it a manufacturer, is it a grocer, is it a producer, who's coordinating so that that is put on there for tracking for the, throughout the whole system, and what does it entail for that person to start? Like, if somebody's starting a company or producing a product for the first time, what does it mean for them to start participating, basically?

- It's a great question. At its simplest, it's licensing a GS1 identifier, and we issue those in real time. So you can go to, right? A GS1 US store, or even a store of any of the other member organizations around the world, many of them have the ability to issue those licenses real time. But as one of my other colleagues, she says nobody wakes up in the morning and says, I need a GS1 identifier. So there's usually a compelling event. And I would say the two compelling events are demand side partners, retailers, marketplaces across any of a variety of industries, we serve over 25 industries in the US. Our core, of course, retail, food service, apparel and general merchandise, kind of that department store and mass merch retail, and then also healthcare on both medical device and pharmaceutical side. So somebody on the demand side is saying, I need to authenticate the identity of the products in my supply chain. The parties that are participating with me in the supply chain, they will often be the demand point. Or regulatory drivers. In the US, we have support for unique device identification through the US Food and Drug Administration. That's all around medical devices of various levels of importance and criticality when you're dealing with patients, right? Something from a bandaid, all the way to an implantable device, they all have to carry a unique device identifiers, and GS1 is one of three issuing agencies around those. On the pharmaceutical side, the Food and Drug Administration passed regulation called the Drug Supply Chain Security Act. And we are part of that tracking mechanism for serialization and chain of custody of products. So regulatory is always nice, when the government says do something, you know you do because you're gonna wanna avoid fines and jail. I always like to say, people use GS1 standards for three reasons, to make money, to save money, or to avoid jail, or, I mean, mitigate risk, I guess, is probably the easiest way of saying that. But so the demand side, typically, is the one asking for that scaled way of looking at things, right? I want one unique identifier, I want that language to be global. So when we call ourselves the global language of business, what we mean is when you scan a barcode, it identifies exactly that one thing all over the world. Now, you and I can talk a little bit more detail about serialization 'cause a bag of, a nine ounce bag of regular flavored potato chips has the same ID all over the world. However, batches, things that are produced at different times, there's some additional identity embedded in those, that's really probably why we have to talk about more than just UPCs or one dimensional barcodes. But on the brand side, it is the brand who who needs to go and assign that unique identifier. So GS1 US, we license in two ways. We will give a capacity what we would call a prefix, that's a fixed part of that barcode and you assign the other numbers and you assign them randomly. So one, you know, a 12-ounce can of a carbonated beverage versus a 20-ounce plastic bottle of a carbonated beverage, two different IDs chosen by the beverage manufacturer, typically. What we do have is a GS1 registry platform at the global level where through the local members, like GS1 US, our brands can register all of the items they've created very few attributes, the GTIN and the global trade item number and then six attributes that would tell the rest of the world what that is. And that's what's used for that authentication mechanism I talked about for the demand side partner, especially to your point earlier that you said about a lot of items, not just digital items, but physical items that actually never flow through a traditional supply chain. When you look at marketplaces today, they do a lot of third-party selling. So they wanna connect you and I together, I have an item I wanna sell to you. They never take possession of the inventory, they're just providing me a listing mechanism. But they wanna know that if I'm promising you, you know, a box of 12 number two pencils, that it isn't actually a can of green beans. And so they'll utilize GS1 to verify those basic attributes about the items so that you know when you order the pencils, that you're not gonna end up with a side dish for your dinner, instead.

- That's really interesting. Yeah, it makes a lot of sense, too. I'm interested in asking about what you had started to talk about, sort of changes to the future or plans or possibilities future. Before we do that, I would like to ask that question as if I was asking it 25 years ago. So I could imagine in the internet age of the last 25 or 30 years, there has been sort of a re-revolution of what GS1 had started to do 50 years ago. And even in those first 25 years, a ton of it really ramp, right? Ramp up. So what has sort of changed, been revolutionized in the last, you know, in the internet age, or even in the last four or five years, the pandemic age, and then this idea of like what the plans are for the next section of time that things could be changing or innovating.

- Well, in the last 25 years, and this is where MIT was such a pivotal part of partnership with GS1, because we launched our efforts around passive UHF RFID right around 1999. So we had a couple of big things going on. 1999 was when the first efforts to start providing better mechanisms for synchronizing product master data happened. So there was a lot of electronic exchange of product information, but there was this desire to have sort of a network that kind of tracked base level product master data that really started in 1999, so close to 25 years ago. And then the launch of the RFID effort. And this was a herculean task of bringing industry together. So you definitely had MIT, and some of our other auto ID lab partner universities around the world in Switzerland and Japan and Korea, China coming together around what was the first inklings of IOT. And I believe there's someone from MIT that's credited with coining that term, internet of things. I apologize for not knowing his name. But when IOT just began, that just being trickled out into the universe, that was also the time where there was this interest in serializing products, and one of the first use cases was anti-theft. It was shrink, razor blades were one of the big, from Gillette, were one of the big items that kept getting stolen. And they were trying to find a way to put a technology on the packaging that would help them track each individual unit. Because interestingly, about retail theft, it doesn't just happen at the retail store level, it happens in the supply chain. And the idea of some kind of sensor, an RFID sensor, that could be read anywhere in the supply chain became very appealing to help with that use case. Now, it quickly mushroomed into inventory tracking, and beyond that, omni-channel retail. So to your point of the internet age, what was interesting in the early 2000s, so we're maybe a decade into this effort, which is the other challenge of standards, it's like the long, long process. You can never become weary of your well-doing when you're in standards 'cause it takes a long time to get the industry to truly embrace readiness around, you know, these technologies. But at that time, omni-channel, and I listened to an executive from Macy's, he said to me, especially when I started innovation, he said, Melanie, your team needs to look around the corner 'cause we don't wanna be caught off guard by the next thing that happens. Omni-channel retail wasn't a strategy of the retailers, it happened to us because the consumer started demand what she wanted, when she wanted, where she wanted. She wanted to mix the digital and physical channels and we had to have inventory down to the unit in order to satisfy her need. So RFID really took off as part of that, what we were calling cycle counting each individual unit in a retail store so that you could expose that inventory online, and a customer in Miami could order a dress from the Pacific Northwest, and then now, as you know, it all morphed into like two day delivery, overnight delivery, two hour delivery. we've really become quite demanding as consumers. But that initial omni-channel was a big driver around the increased adoption of RFID, and GS1 was at the center of creating all the standards. So we created standards for serialization taking that number that was in the barcode, being able to embed it in RFID chip, have it be unique. So now, you're not just talking about every nine ounce bag of regular flavored potato chips, you're talking about each bag of regular flavored potato chips. And beyond that, you were able to work on that available to promise inventory, as well as better inventory tracking because we were running, most department stores are running like 65% accurate on inventory, which is just brutal from a profitability standpoint. So again, there were ways in this to make money and save money that were gonna benefit, the consumer was gonna get what they wanted, when they wanted it, the business was gonna be able to more effectively track inventory so you're gonna be able to manage those levels better and run a much more efficient, I don't know if it was always leaner, but you could run a more efficient supply chain. So RFID burgeoned in that timeframe as well. And, you know, that may lead us, maybe, to our next talk about where we're going in the next four to five years.

- So I'm hearing, in terms of future, I'm hearing about things like GS1 US facilitating a change within industry to leverage things like 2D barcodes. What does that mean? what can a 2D barcode that a UPC symbol, which is, you know, the 1D version cannot do, what's the thinking there? What does it mean for that to roll out into the world?

- Yes, the 2D barcode offers so much more flexibility. And there's probably a strong linkage, too, between 1D, RFID, and 2D because one thing we're learning is that where one dimensional barcode, like A UPC, which so many people now know what it is because of self-checkout. So to your point, like before the pandemic, when we weren't having a lot of pickup on things like curbside or home delivery in the US, we were lagging behind Europe and others and their sort of omni-channel at the basics level, grocery, replenishable products, and so we were lagging behind, and the pandemic just really pushed all that forward in a big way. But that also exposes some of the gaps. A one dimensional barcode, a UPC, is designed to do one thing, go beep. It goes beep and it tells the software, please look up my price. It's phenomenally efficient at doing that, right? If you've ever watched like speed, there are barcode contests like scanning contest, you can do it pretty quickly, and you're just gonna write price, price, price. But when you need to get to that rich set of data, where was this manufactured? When was it produced? What is the expiration date? Most of that today appears in human readable text somewhere on a products package today. And if you're like me, it can be very difficult to find it. You're getting, not only you're reading glasses, but you're magnifying glasses. And also it's not, going back to our conversation about scale, it's not scalable because it's a manual intervention every time. So while RFID actually helps solve those problems, because when you serialize things, there is one of one, and you can find it anywhere it is in your supply chain by reading it. The challenge is that RFID technology comes with certain set of infrastructure costs, and even RFID tags, while the prices have come down incredibly in the last decade that I've been working on this technology, still may be prohibitive for consumer packaged goods that tend to be low margin. But you have this need, you have few needs. I need to be able to pull expired product off the shelf. I need to be able to pull recalled product off the shelf. I need to be able to communicate with consumers when they may have purchased recalled product. I want to actually manage pricing based on the production date or the freshness date of product. None of that is possible with a one dimensional barcode. And this was really the impetus behind the 2D work that we really started in the US in 2018. Our counterparts at global, were working on this probably many years before, but 2017, we ratified a standard called GS1 digital link. And it was about taking GS1 identifiers, not just the global trade item number, but other things like dates or batch lock codes and structuring them into an internet syntax so that you could embed them in a 2D barcode, that could not only, right? You could extract the data to do that beep at point of sale, but now you could also scan with various other types of software to do all those supply chain functions I mentioned, and even provide the consumer an engagement point on the product. Because as the ubiquity of mobile phone technology, right? You started to see a mobile phone in every pocket, at least, certainly, in the US, you start to see a mobile phone in every pocket. And then the pandemic helped because you also started scanning QR codes all over the place. Like, nobody wants you touching anything, so you go to a restaurant, point your phone. So QR code adoption kind of exploded during the pandemic. All the while, amazing work of foresight by some folks at GS1 to go look at 2D before this was really even a thing. I mean, we had to advocate, Benjy, through some really challenging times because in the US, there was a lot of stigma around 2D barcodes prior to the pandemic. People were like, oh, they get spoofed and they're not real, and, you know, why would anyone do that? Meanwhile, in countries like Columbia and China, you had upward of 60%, 80% consumer adoption of reading QR codes. So once again, the US is lagging behind. We were lagging behind in alternative delivery of consumables and replenishables.

- And what's the hesitation? Is it our general conspiracy theory?

- Yes, oh my goodness.

- Spam culture?

- Yes, we should probably, if I had a dollar for every time someone said, but when you scan a QR code, isn't it tracking you? I'm like, it's no different than a UPC. All that's embedded in that code, right? Is unique identification about the product. Now, you can contextualize a scan. This is the other thing that's so interesting about QR code technology, right? You pair that with software, whether that's phone-based software or lot of mobile devices in use in retail today that are helping associates perform their jobs more efficiently. Let's go back to what I said at the beginning. You gotta identify something and capture it in a machine readable way so you can automate. And we've got to automate because we can't do things at scale in retail if we don't automate. So I think 2D opens that up. Here's an example I love to give maybe just very straightforward. I was at a grocery store, and I happened to notice in the freezer case there was expired pizza. Okay, very strange. Why is there expired pizza? Well, the little codes that are printed on the edge of the packaging, somebody has to go read all those and read the expiration dates. I mean I was just hanging out at the store, I had time to do it. The average associate probably doesn't. But if you were to embed expiration date in a two-dimensional barcode, and you could equip an associate with a mobile device, go out, and they could just scan and basically get a red or green, red, pull it off the shelf, green, leave it on the shelf, that would expedite their process of kind of that freshness checking immensely. You could also utilize those dates to do dynamic pricing. Maybe that happens at the register. Because now, when I scan the 2D code, if it says, oh, the expiration date of this one is tomorrow, I'm gonna give you 50 cents off, dollar, whatever, you're actually like driving consumer delight in a very dynamic and sort of real time way. Maybe I wasn't expecting that 50 cents off, but when it happened at the point of sale, how much more pleasant was my trip to the grocery store? So I think this, again, when we talked about convergence of 50 years ago, right? Convergence of barcode technology and a need in the grocery industry around automated price lookup, now you're talking about massive use case convergence, whether that has to do with consumer engagement, promotion, dynamic pricing, recalls, expiration date, all of these things, all can be enabled through the use of a pretty straightforward technology, and over time, we're gonna be able to replace that UPC, the bars and spaces, with a two dimensional QR code or a data matrix type code on the package so you're doing a real estate swap, which will make your brand managers happy because then, right? They can still use the rest of the packaging to make all of their claims about how healthy products are for you.

- And like you said, the data exists, it's already being printed on the package, just in a less easily digestible way. So I guess what are the necessary steps, then, to make this migration into 2D as the standard and is that the goal?

- Yep, that is the goal. We talk about, at GS1 US, we call it Sunrise 2027. So as you can imagine, it seems so far away when that was first brought up in 2018, but time flies quickly. So the first thing is you've gotta start thinking about it. And of course, GS1 US provides resources to explain in more detail some of the things I've described around the why behind a two dimensional barcode. But I think, right now, it involves all rowing together. We've gotta be in the same boat pulling in the same direction, and we've gotta decide that we're gonna make this move. And there are brands making this move today so you gotta thank the pioneers that are gonna be the early adopters. You know, working in a university, you have so many innovators. We have to have that same thing in retail and healthcare and food service across all of our sectors. They're those people that are willing to pioneer and go out and lead the charge for us. But for the average company, I would say, one, is learn from the pioneers. Go and read about their stories. There's a lot of great stories now coming up on the internet about what companies are doing. And then secondly, you've gotta embrace the idea that it's a migration and not a lift and shift. So there is gonna be a time where many, and many packages today already carry both a QR code and a UPC barcode because people were testing QR codes, right? for other use cases.

- Yeah, that's what I was gonna ask about is are we gonna see 1D and 2D technology next to, I mean, like we have seen it, is that, or is the idea that the 2D will replace 1D because it will encapsulate that information as well?

- Eventually, yes. One of the biggest challenges when you're dealing with everyone from, right? A most sophisticated, multinational retailer with thousands and thousands of locations, to a mom and pop convenience store that's on a back road as you're making your way kind of north through Wyoming or Montana, is you've got the gamut of technology. What's really interesting is those longstanding sort of convenience stores, small operations that kind of use legacy point of sale technology. For every one of those, there are the new market entrants. Restaurants are very common where you're now seeing a lot of the new POS devices pop up that kind of have that native 2D scanning already in them. So we're working on this continuum of trying to capture the most sophisticated to the least sophisticated and push us all to a point of adoption. So there will be a period of coexistence, but eventually, that's why we're calling it Sunrise 2027. That's the time when you wanna be able to scan the 2D, but probably the 1D, the UPC, hasn't gone away at that point, but over those next few years, we would expect it should.

- Well, and it strikes me that the challenge isn't necessarily the adoption of the codes themselves because the, I mean, that is a challenge, but because they're digitally accessible and easily to retrieve, but not so much as the hardware, the POS devices, and like, I'm going to my local grocery store, my star market, and they have a scanner that reads a particular kind of code. What does it mean for hundreds of their stores and hundreds of different stores having hundreds of stores to be able to integrate that into what they're already doing?

- One thing I do think is kind of a gift with purchase is you can piggyback on another use case, and in some situations, loyalty has been the ground breaker. So when you think of loyalty programs in a lot of of stores now, you scan your QR code, that's your loyalty ID. So they have 2D scanning. It's happening in a lot of different retailers today, and that, when you said, hey, have you already implemented two dimensional scanning for your loyalty program? Oh yeah, well let's figure out if we can repurpose that for point of sale. You get the creative ideas start flowing. So I love when, I like to, you know, I use all of my kind of colloquialisms, but convergence, multiple use cases is gonna be where your ROI is, right? You don't wanna just solve one thing, you wanna solve, a passive checkout is another one, right? Letting a customer checkout with a mobile device. But piggybacking. Let's jump on top of another use case where you've maybe already made the investment. Because loyalty programs are phenomenally appealing to retailers, and if they're willing to make hardware investments. And a lot of times, Benjy, actually, it's just a software upgrade. It's actually not replacing the scanner. Most scanners, if you've bought it anytime, probably in the last decade, probably has the capability and it's a matter of getting it turned on if it's not already enabled.

- Well, and I was also thinking about this situation with stores that don't even have checkout. You just walk out and scan what's in your bag, right? So it's got those sort of like powerful, of which I'm sure there are gonna be consumer adoption issues, maybe more in the United States than elsewhere or vice versa 'cause of some of the issues that you've mentioned before. Are there brands currently using 2D technology the way that you're envisioning them?

- Yes, very much so. Some stores, not in the US, but a couple that are happening in the US, Puma, manufacturer of clothing, apparel, footwear, in their flagships store in New York, they actually implemented, so both RFID, because RFID provides great passive inventory tracking, so you can count your store lots and lots of times using RFID readers and keep an accurate count of inventory, but they also implemented 2D for consumer engagement and they have actually, in their own retail store, taken the UPC code off the tag. So they are doing a combination of two dimensional barcode and RFID, consumer engagement, point of sale, and inventory management. Another one that we know has implemented two dimensional barcodes with GS1 digital link is Patagonia, probably for the consumer engagement use case, more so as their starting point. And then Pepsi. And PepsiCo has been a very big advocate for GS1 digital link because, frankly, you can put any URL in a QR code, just to be clear, right? I don't wanna mislead about, the technology is the technology, but it's about putting that GS1 digital link syntax which allows you to read the unique identifier, read the additional data, like, perhaps the expiration date for the point of sale operation or for the inventory operation, but then also, for consumer engagement. And so Pepsi started, they used 2D to relaunch Starry, which was a rework of a, I think their old Sierra Mist product. They used it. But also John Phillips, who is the senior vice president of customer supply chain and go-to-market at PepsiCo, he's been a strong advocate for 2D on product, as well as GS1 digital link. And he has spoken at conferences, he's also done a video with GS1 US really, again, as an outspoken proponent of the industry move toward this technology. So I think there are many other examples of companies that are implementing this, but I think, from a public facing perspective, those are three that I know of that have kind of shared their stories for the community just to galvanize around.

- What are the roadblocks for moving forward with this or with other plans you may have? I'm thinking of something, like, you may have a different phrase for this, but the thing I'm thinking of is sort of, is there a concern with what I would call splitting the root or splitting the standard where there's, I could go to a QR code generator and create my own QR codes and use them in my own mom and pop shop or do whatever to scan and do whatever I wanna do there. Are there concerns with that? Are there other roadblocks to moving forward and how do you approach them?

- That use case exists in 1D world too, because as long as you keep the identifier within your four walls, you probably don't see the need for globally unique identification. But as soon as you wanna branch out and you wanna list on an internet marketplace, or you wanna, we've had companies who have created products with proprietary identifiers that we're gonna sell just direct to consumer, right? I'm gonna post up a website and I'm gonna sell outta my garage. And then as soon as they try to branch out to an online listing, or we had one, a small batch coffee roaster that got a deal with Lowe's supermarkets in, you know, North Carolina and had to put a UPC on there because that's what nationally-branded retail grocers do. So in one sense, you've got momentum, you've got an industry that's scanning 10 billion barcodes a day all over the world, multiple industries. They're relying on that globally unique identifier because nothing worse than clashes that happen. So you could go and create a unique identifier, but there's no guarantee that it's gonna be unique outside your four walls without a steward to kind of help manage that, the application of that on a global basis. So I've actually talked with startups, and I've talked with startups who went down the proprietary path cosmetics and then got a deal with Sephora and had to go and relabel all their packaging because they scan GS1 barcodes in their digital and physical operations. And then I've met companies, I met this company that was manufacturing shelf stable soups, but in kind of innovative packaging, little more environmentally-friendly, lots of great nutritional claims, actually had the chance to try one of their soups, it was delicious. And they came to this pitch of I was at with GS1 barcodes on the product and I was like, hey, I just have to say, I'm pleasantly surprised. Like, how did you know? Well, one of our advisors used to work for a big consumer package goods company and they told us we need to go get a GS1 identifier to put in our barcode. Y'all might be too young for this, but there was this Faberge commercial in the 80s with Heather Locklear that she would say, you know, you'll love this product so much that you'll tell two friends, and she'll tell two friends, and she'll tell two friends, and her face just kept multiplying on the screen as you just showed the power of word of mouth. And that's a lot of what happens with GS1 standards. So I think people realize that I'm, if I'm crossing a supply chain line, if I'm working across a network of partners, these identifiers have to be able to stand up to multiple reads by different parties who have a different need to have info to append info to the product or the location and send it on to the next party down the line. Standards are the heart of that, of that notion of uniqueness, persistence, that guarantee that we're right. We're not supporting duplication across networks, that's been the big thing. So, and I think the ability to read that barcode and then interpret it, because if you're creating it randomly, there's a risk of it, it'll get to a read point and it won't be able to read or interpret what you've put in the barcode. So that's really why we exist as a standards org, right? We are a not-for-profit organization all over the world. Our goal is really to serve at the behest of industry, but also, to continue to support our members that look around the corner so that we're helping companies anticipate how technology could benefit the future of business rather than just kind of rest on our laurels, right? My team spends a lot of time investigating hype, debunking myths around emerging tech, and that's probably where all of this actually started when you think about the myths around QR code that have truly evaporated in the last few years. Same thing happened with RFID, right? 20 years ago, somebody had to work their way through all of the truth and all of the fluff and find that true use case in ROI for companies.

- Yeah, well, you've brought up a really important question, which is who's Heather Locklear? No, I'm be joking, We all know. But that, I guess what I'm thinking about is you had mentioned GS1 as a nonprofit. Are there other ways that an organization, a company, a manufacturer, or even an end consumer, are there other reasons why they would be interacting with GS1 or GS1 US to learn more, to hear about best practices for other sorts of partnerships or information?

- Yes. So our primary role, right? Is to issue unique identifiers. And as I mentioned, we can do that by, we actually, as I said before, we issue prefixes, we also issue identifiers in whole. So if you're a very small company and you're like, look, I'm making three different spice blends that I wanna put on grocery store shelves or sell on a marketplace. You can just get three unique identifiers from GS1 US and do that. That would be the basic level customer. But we also have a community engagement team that works with industry partners who want to sit around the table and help define or articulate the problems and define the solutions of the future. So those are great ways to get engaged here in the US or anywhere all over the world, frankly, where also with that solution partner community, sometimes you're approaching your business saying, I wanna grow, but I'm not sure I'm gonna need help. I need a logistics provider, or I need someone to help me redesign my packaging. And we have over a hundred solution partners in the US alone that can help do those things, even, right? ERP software deployments. And they run the gamut of anything that has to do with helping you improve the efficiency of your supply chain and grow your supply chain. So those may be reasons to get involved. I also, just selfishly, from my team, we wanna pilot emerging technology. So my team will work with whether you're a large corporate, whether you're a small startup, we work with both end users and technology companies to pilot solutions, whether, you know, those are around digital receipts, computer vision, the use of multi-sensor technology to drive multiple use cases. We just completed a big project around cold chain applications for IOT and how you manifest them across the supply chain. Because the lovely thing about technology is there's so much to choose from, and the real lift is in, can I get to the data layer so that I can ingest that data, digest it, and then disseminate it to the systems and the people that need to take advantage of it and we do all of those kinds of things in GS1 US. Looking across the holistic supply chain, how do we find where data, where technology, and where standards can intersect to solve a problem. Whether that's a legacy problem, so we've been chasing things like product traceability for two decades with certain core industries, or whether that's the future, which is to say this move toward sensor-based, recommerce, embedded threads in garments that can actually use that identity for recommerce or recycling purposes. The notion of circularity around plastics and product packaging, we have teams that are working on all those things. We call it the circular journey of the product. All the parties involved, all the steps involved, we really wanna make sure that the standards are covering all the needs across the board.

- Well, and as you mentioned, the integration of 2D will enable, not just the tracking of a product for manufacturers or where to sold, or for the end consumer, how much it costs, but also enables a whole promotions and marketing platform, which is my world, to enable people to find out more information about products or companies or promotions or giveaways or whatever they want. So this one code can do many different things for different times or people or places or how they're read. So I find that component really eye-opening. It's been just a, you know, a pleasure of speaking with you and really appreciate you being here. I guess I want to sort of close off an opportunity to sort of talk about what the next section of time is gonna look like. What four to five years will look like for GS1 for GS1 US, and for its partners.

- Sure. For the core community, this Sunrise 2027 effort and the move to implement 2D broadly across retail and across healthcare is significant. So there are a lot of folks that are heavily invested in ensuring that happens, both inside GS1 US and right in our member community and our partner community. But from an innovation lens, one of the most exciting things that we've been working on is around verifiable credentials. And this is all about digital identity technology and how we can actually link digital data, cryptographically secure digital data about products as they move through a supply chain to the products that are moving through the supply chain. So if you think about a supply chain as three things, there's the physical flow, okay, we know products get to shelves and they get to doorsteps and that's happening, the magic of trade happens every day. There's the financial supply chain which makes sure all those people get paid 'cause nobody can make more products if they don't get money. And then there is the digital supply chain. And this is sometimes purely digital. There's so much pure digital that's happening today with virtual worlds and all the purchases that you're doing that never manifest in a physical product. But then there is so much digital data about products, and to truly unlock the power of things like artificial intelligence and what it brings to the table, we've got to find ways to bind the physical and the digital together. And so that's a big focus of our innovation team as well. And we believe, I mean, it started, it's been a five-year journey. There's at least five more years in the journey, probably more like 15. But that notion of finding cryptographically secure ways to link digital data to physical products has such broad implications for cross-border trade, for product claims, the authenticity around product claims and certifications just for assurance from any party in the supply chain, any regulator, and even at a consumer level, and we're utilizing technologies that, some people call them decentralized, I like to say distributed technologies so that it's kind of self-evident. I can validate something with my own device, my mobile phone, if I wish, that doesn't rely on me going through a bunch of hoops and paywalls and firewalls to get to the truth. I think this is a really fascinating evolution. And, of course, something that I know our partners at MIT have been looking at for many years because it even applies to things like educational credentials, right? Can you prove the validity of something through a credential that is self-revealing? And also, can you revoke those credentials so that there's a digital way to say, hey, this is no longer valid information. Very hard to do that in an analog world. When you think about, you know, just saying that something is within warranty, or something is organic, or something is gluten-free, those things can change at any time, but our paper chasing, as supply chain practitioners, is not an effective way to ensure that we're keeping that information up-to-date and providing consumers with an authentic experience, that's gonna have to be done digitally. So for us, that's really one of the next big frontiers that our team is also working on in parallel with this move to richer product information on package.

- Well, thank you. Our guest today on Supply Chain Frontiers has been Melanie Nuce-Hilton, senior Vice President for Innovation and Partnerships at GS1 US. Melanie, thank you so much for joining us. This has really been a great conversation, and I know that so many people will love hearing pieces of this as well, too.

- Yes, thank you. My pleasure.

- Thanks for listening to this episode of MIT Supply Chain Frontiers, presented by the MIT Center for Transportation and Logistics. To check out other episodes, visit ctl.mit.edu/podcasts. And for more on the center's research, outreach, and education initiatives, make sure to visit us at ctl.mit.edu. Until next time.