147 Purpose of labelling of Stock Keeping Unit (SKU) and Distribution Unit (DU)

Purpose of labelling of Stock Keeping Unit (SKU) and Distribution Unit (DU)

The purpose of a standard for labelling of Stock Keeping Unit (SKU) and Distribution Unit (DU) with subsequent electronic data interchange (EDI) is to:

  • Achieve an efficient flow of products from manufacturer to consumer
  • Ensure traceability through the value chain, which is important in case an event or crisis occurs which requires a recall or withdrawal of the product

The basis for this is the labelling of each Distribution Unit (DU) with a unique SSCC.

This code is the main key in the electronic Despatch Advice and is linked to information about which GTIN which the Distribution Unit (DU) consists of, the number of Stock Keeping Units (SKU) batch / lot number and shelf life information if applicable.

SSCC is the most important key for traceability of Distributions Units (DU), see Recommended way to track and trace a product in the value chain.

For that reason SSCC shall not be reused until after a minimum of 6 years.

Recommended way to track and trace a product in the value chain

Recommended traceability methods in the value chain

Traceability using pallet labelling and EDI Despatch Advice
The recommended traceability method involves labelling load carriers with GS1 labelling system combined with EDI Despatch Advice (Advance Shipping Notice(ASN)).

For products distributed through the retailer’s distribution warehouses, the industry’s unified guidelines for the identification and Distribution Units (DU) are based on GS1 standards.

To conduct traceability, each actor in the value chain must have a system that can store and process Distribution Units (DU) or logistic units with unique identifiers.

The importance of SSCC as the primary tracking key for deliveries
SSCC is the most important tracking key in the retail value chain. For each pallet identified and marked with SSCC, all products that are on the pallet are linked with full tracking information (GTIN, batch / lot and shelf life). This information is sent to the buyer in an EDI Despatch Advice.

A prerequisite for the tracking information to remain intact is that an SSCC is not reused.
Reusing a SSCC can result in a pallet being stopped at the Goods Reception by the recipient’s IT system, anticipating that the pallet has been received earlier. The recipient must then issue a new SSCC for the pallet, mark it and link the contents of the pallet to the new SSCC.

Since the pallet now has a new SSCC, it can no longer be used as a mutual tracking key in the retail value chain. In case of an incident with a possible recall / withdrawal of products, this could be critical.

STAND has therefore decided the following:
“For trading in Norway, it is a requirement that SSCC shall not be reused until after a minimum of 6 years. This is rooted in the Norwegian Food Safety Law, requiering a minimum traceability of 5 years. This also includes products that are outside the scope of the Norwegian Food Safety Law”.

Traceability at and from sender
Each packaging level (Consumer Units (CU), Stock Keeping Units (SKU), Distribution Units (DU)) has an assigned GTIN and must include a bar code on the label.

On Consumer Unit (CU), GTIN should preferably be labelled with the EAN-13 bar code symbol.

Stock Keeping Unit (SKU) on the Distribution Unit (DU) must be labelled with an approved bar code symbology and linked to the Distribution Unit’s (DU) unique identification.

Each pallet must be labelled with one GS1-128 bar code pallet label. The label contains a unique identifier (SSCC) which enables a link between the Stock Keeping Unit (SKU) on the pallet and the batch / lot number stored in the sender’s IT systems.

If the pallet is split or changed (for example, to one Mixed pallet or Promotional Unit, it shall be identified with a new GS1-128 label and SSCC. Mixed pallets are not labelled with product information.

The product information is attached to the pallet’s SSCC by scanning each Stock Keeping Unit (SKU) when the Distribution Unit (DU) is being assembled.

Once the sender has created the connection between the Stock Keeping Unit (SKU and the Distribution Unit (DU) and secured this, the information can be used to make an EDI Despatch Advice.

The EDI Despatch Advice is then sent from the sender to the recipient of the products. The parties are identified with GLN. This provides a clear and secure identification of the parties and is central to traceability. The Despatch Advice contains all relevant product information (GTIN, batch / lot and shelf life) about the shipment, and that it ties it to each Distribution Unit (DU) using SSCC.

For shipment, the supplier scans all outgoing Distribution Units (DU) and thus has a unified link between the individual product, its associated batches and which customer receives the product. This also enables effective control of the sending of correct products to customers.

Sender sends EDI Despatch Advice to recipient at agreed time.

Traceability at receiver
When the products arrive at the recipient, each pallet will be scanned.

All Stock Keeping Units (SKU) and Distribution Unit (DU) information is received in the EDI Despatch Advice. Using the EDI Despatch Advice, the tracking information is taken care of and significantly simplifies the products receipt.

The link to the product information occurs when the recipient scans the SSCC on each Distribution Unit (DU). Here, the recipient connects information about the products (GTIN, batch and shelf life information, against the sender (GLN).

For a Standard pallet all relevant information can be scanned from the Distribution Unit (DU) labels. This ensures that correct products are received at the same time as traceability information can be linked to the individual supplier. This simplifies and ensures the sharing of proper traceability information.

Mixed pallets must be split into the warehouse, and through IT support ensure that accurate and statutory traceability information is safeguarded and connected correctly.

Efficiency and traceability are achieved primarily through:

  • Synchronization of product information between the various parts in the value chain.
    The purpose is for all players to obtain correct and coherent product information about the products. Between suppliers and retail chains in the Norwegian groceries sector the EPD database is used for the registration, quality assurance and distribution of product information.
  • Electronic Data Interchange (EDI) between the actors.
    The purpose is to reduce manual operations and reduce lead time in the value chain. The most widely used EDI messages are order, order confirmation, Despatch Advice and invoice.
  • Standardized labelling of outer packaging.
    The purpose is to contribute to faster and more efficient shipping, distribution and receipt of the products. A common labelling concept for the grocery industry is used here; GS1-128.

To ensure rational product and information flow in the distribution chain, STAND recommends a uniform labelling of Stock Keeping Units (SKU) and Distribution Units (DU).
This simplifies the labelling of the manufacturer / supplier, shipment by shipper / freight forwarders and merchandise at distributor / store.

This labelling concept also applies to types of transport units other than pallets.

For fish and fish products, the following applies:
STAND has decided to refer to Norwegian Standard NS17099:2020 “Information technology — Fishery and aquaculture products — Requirements for labelling of distribution units and pallets in the trade of fishery and aquaculture products” for products that fall under this category. This standard replaces todays NS9405: 2014 “Fish and fish products. Requirements for labelling of distribution units and pallets in the trade of fish and fish products», and is valid as from 30. September 2020.

It can be ordered from Standard Norway.

Published on: 31. July 2018