Case Study: ZON fruit & vegetables raises the bar for GS1 compliance

SOURCE: Lansa Case Study

Many fresh fruit and vegetable suppliers are officially allowed to tick the GS1 compliance box. However, most of them are just filling the required item attributes with default values, because data quality seems too hard to achieve when dealing with natural products. ZON fruit & vegetables, based in the Netherlands, went beyond this type of superficial GS1 compliance and is the first in its sector to not only fill all item attributes with real values, but to also close the entire loop from GSDN publication to EDI invoicing. Using Data Sync Direct, a solution from the LANSA organization, ZON is implementing its new procedures with a well known Dutch grocery retail chain via the GS1 DAS data pool.

Raising the bar for other players in the agriculture industry, ZON’s unambiguous data quality helps to minimize misunderstandings about products through the entire chain and allows retailers to better manage transportation requirements and shelve space.

1. The Challenge
2. The Project
3. The Benefits
4. Conclusion
5. Company and System Information

The Challenge

Michèl Thewessen, Manager ICT at ZON (left)
and Wil Westerburger, Operational Manager
at ZON (right)

ZON is one of the largest food horticultural cooperatives in Europe. ZON’s roots go back a long way, to the establishment of the Cooperative Auction Association in 1915. After various mergers and structural changes, ZON has developed into an international sales organization and is known today as an active mediator in the chain from producer to customer.

ZON offers cooled storage, transport, cross-docking and other logistics services from its two distribution centers. ZON also has a real-estate arm with ‘Fresh Park Venlo’, a business park where over 130 fresh food companies – such as suppliers, growers, transport companies, traders and packing companies – rent facilities from ZON.

ZON’s sales division uses a range of sales instruments to sell its growers’ products quickly and efficiently. The auction, traditionally in a hall or over the Internet, is one of these instruments. In addition, ZON offers contracts on a weekly, monthly or seasonal basis where parties commit to a predetermined product volume against a fixed price. Last but not least there is telephone sales and mediation, depending on what products are available on any specific day.

All the transactions related to the delivery of products by the growers, warehouse logistics, pickup-by or delivery-to the customer and all the financials between ZON, the growers and the customers are handled by a heavily customized version of USVA, an auction administration system, complemented by in-house developed systems for contracts and sales mediation and various on-line facilities to customers and growers.

Michèl Thewessen, Manager ICT at ZON, explains, “We are a very customer focused organization and that’s reflected in our ICT systems. Our auction customers are mostly wholesale traders. We have fine-tuned our systems to service them over the years and will continue to do so. But through our contracts and mediation sales, we now also cater for a growing number of retailers. The retail industry has many additional requirements. It is a market we are keen to develop further and several of our recent projects have been focusing on meeting their needs.”

ZON’s GS1 project is a recent example of how ZON is adapting its systems to better meet retailers’ needs.

ZON has been GS1 certified for several years, but none of its retail customers asked for strict implementation. GSDS publication happened only just before invoicing, instead of having the assortment of published items continuously up-to-date. Also, 50 of the 70 required item attributes were filled with default values. This allowed ZON to get started with GS1 DAS (the GDSN-certified data pool for the Netherlands), but it hardly guaranteed data quality.

The trigger to improve came when a leading retail group asked ZON for EDI invoicing procedures. “Initially their focus was only on invoicing related EDI traffic and not in the processes that precede invoicing,” explains Thewessen. “However, one of the retailers within the group saw the project as an opportunity to close the loop and improve the entire process, from GSDN publication to EDI notifications and invoicing. We were keen to prove to the retail world that we can be a front runner in meeting their needs, and saw the GS1 and EDI project as an opportunity to do so.”

“It was an opportunity to improve the entire process, from GSDN publication to EDI notifications and invoicing”

The Project

ZON selected the Product Information Manager (PIM) solution from LANSA – Data Sync Direct. This is an end-to-end Global Data Synchronization Network (GDSN) solution, designed to cater to the needs of demand- and supply-side implementations. A major reason to select Data Sync Direct was its ability to integrate tightly with ZON’s backend ERP system, but also the fact it could easily be coupled to another ERP system, if that need would arise in the future.

Thewessen explains “The technical implementation was done in two days. It basically worked out of the box, the installation, integration with our backend ERP system and the communication with GS1 DAS. What was far more time consuming was the process of collecting information for the item attributes that had been missing and the discussions about what rules should be applied to those attributes.”

As an example of one of those discussions, Thewessen mentions the issues a tray cauliflowers raised. Should you express the consumer’s unit as a single cauliflower or, as some retailers prefer, express it in grams of cauliflower? And what are the measurements and weight of an average cauliflower, or a whole tray of them, since both very much depend on the way the stalks are cut? Another example was the definition of pool-pallets (rentable pallets, being pooled), quite common in the industry, but there were no suitable attributes available to describe them.

ZON went with these type of questions to Frug I Com, an alliance of organizations in the fruit and vegetable chain, whose mission it is to optimize information exchange between parties in the chain, by establishing standards for labeling and electronic data exchange. ZON also went with its questions and suggestions to GS1 Netherlands, who assigned a panel of experts to sharpen up the GS1 rules and standards for data quality in the fruit & vegetables industry. In effect ZON helped to establish some of these standards, which have meanwhile been officially communicated to other parties in the industry.

“Except for the long time we spent on discussions and collecting information on item attributes, the rest of the project went smoothly. Data Sync Direct is integrated with our ERP system and its user interface is productive. We are already synchronizing the first part of our item assortment with one retailer and are in discussion with other retailers about their implementation.” says Thewessen.

“The technical implementation was done in two days, collecting information for the item attributes was more time consuming”

The Benefits

Managing various GTINs for the same
product, all with different packaging.

Wil Westerburger, Operational Manager at ZON, explains “Key to expanding our share in the retail market is to differentiate ourselves. Product quality, price and innovation remain the most important differentiators, but that by itself is not enough. You also need to differentiate in the way you offer your products and conduct your business.”

“We do that by making sure our logistic services are well managed: By making sure our tracking and tracing facility is watertight; by making sure our EDI capability is complete and robust; by being a frontrunner in implementing new developments as they present themselves, not waiting for industry deadlines and by showing we are aware of market developments and willing to invest in their early implementation.”

“Retailers will continue to look at product quality and price, but that being equal, total GS1 capability specifically and our ICT services in general, are important ways to differentiate ourselves to existing and potential retail customers,” continues Westerburger.

Frank Stevens, sales support manager, comments “It was a massive amount of work to collect all the information, but now we have all the data centrally stored. You enter a single GTIN code and the system shows all related information, including net and gross weights, measurements and type of pallet. One set of unambiguous data that is used through the entire chain.”

“Customers and potential customers will be able to use very specific search arguments in the GSDN and find our products. Hundreds of suppliers may show when you search for ‘tomatoes’, but when you search with the right codes for a specific type of cherry tomato, pre packaged to a certain consumer unit weight and on a stackable pallet, we might be the only supplier. Having all those details available makes our business more transparent and our products easier to find.”

Having the exact measurements and weight also makes it easier to arrange transportation, especially in the case of export. And it makes it possible for the retailers to plan shelf space.

Being able to handle the entire cycle from GSDN publication to EDI invoicing saves time for the customer and ZON and avoids misunderstandings. Previously placing an order would require fax, phone or email communication and ZON’s staff would often have to spend time explaining packaging options. And still, the delivery might be different from what the customer expected. Correcting such situations would be expensive and create more fax, phone and email traffic. Now the customer has access to the exact details and orders arrive via EDI. ZON immediately checks availability and responds with an EDI confirmation. “There is no human intervention, no miscommunication and procedures run quicker and smoother,” says Stevens.

“GS1 capability specifically and our ICT services in general, are important ways to differentiate ourselves”

Conclusion

The GTIN Manager pulls in relevant product
information from the ERP system and allows
review and maintenance of GTIN attributes

For the time being ZON stores and maintains all the attributes that were missing in its ERP system inside Data Sync Direct, as it comes with a PIM facility. But in the future ZON may decide to maintain all or some of those attributes in its ERP system. Data Sync Direct can support either way and collect-from or feed-into multiple data sources.

“It was not easy being the first in our industry to go for 100% GS1 compliance. We specifically welcomed the support of LANSA’s consultants and the contributions they made in this process. Their support went far beyond technical assistance and included suggestions on how to handle all kinds of data quality issues,” concludes Westerburger.

“We have been a leading party in setting the GS1 standards for our industry and we have applied those standards to our own systems. We are prepared for any new requirements that may come our way, from retailers and traders.”

“We now have one set of unambiguous data that is used through the entire chain”

Company and System Information

• ZON fruit & vegetables, is one of the largest cooperatives of growers in Europe. ZON is the middle link in the chain between growers and buyers and aims to keep the distance between the two parties as small as possible.
  For more information visit www.zon-business.com/en