___________________________________________________________________________

2016/PPFS/012 Agenda Item: 2

Updates on Pilot Project on APEC Global Data Standards for Improvement of APEC Supply Chains

Purpose: Information Submitted by: ABAC

Policy Partnership on Food Security MeetingPiura, Peru

23-25 September 2016

2016/10/14

1

© GS1 2015

APEC Global Data Standards (GDS) for improvement of APEC supply chains

October 2016

Patrik Jonasson

© GS1 [Country] 2015

Background

APEC Global Data Standards

2016/10/14

2

© GS1 [Country] 2015

Background

• The Global Data Standards (GDS) initiative has been driven by ABAC since2012

• Proposing that Governments leverage business data and systems such asbarcoding and data sharing platforms in cross – border control and supplychains for improved transparency and better risk management

• Result could be better product visibility and improved efficiencies, fasterclearance, less spoilage etc.

• Global Data Standards received endorsement in the Leaders’ Declaration andin the Ministers’ Statement in Beijing in 2014 with official support for pilotprojects and again in the Ministers’ Statements 2015 & 2016

3

© GS1 [Country] 2015 4

2016/10/14

3

© GS1 2015

APEC GDS Pilots – Why?

5

APEC pilots were conducted to demonstrate how utilisation of GDS can improve supply chain connectivity across borders.

Improvements via GDS would help relieve the APEC/ABAC identified supply chain chokepoints and deliver a 10% reduction in trade costs.

Benefits were assessed across 4 variables; 1. Visibility2. Efficiency3. Innovation4. Integrity

© GS1 2015

Already identified benefits of using Global Data Standards

• In a pilot project focusing on meat exports from Australia to the US Global Data Standards facilitated Supply chain visibility with traceability improving from 43% to 93% of events and it enabled automation of messages around transport instructions, which reduced manual entry errors with potential savings of US$57,000 per annum.

6

To the Australian meat exporters, savings could be around USD 15M in the Australia – US meat supply chain per annum

2016/10/14

4

© GS1 [Country] 2015 7

Pilot Projects

APEC Global Data Standards

© GS1 [Country] 2015

APEC GDS Pilots Project 2016 Expected Results

Track progress and cost benefit analysis through pilot projects onapplication of GDS at product level with the aim to:

“enhance supply chain visibility as related to traceability andexpedited product admission while coping with existing customsclearance system and future single window”

Objectives: 1. demonstrate how GDS will enhance supply chain performance

and contribute to better compliance; 2. identify enablers, challenges and mitigation policies;3. determine if it is cost effective to adopt GDS in supply chains4. Depending on the results, encourage wider adoption of

interoperable GDS to facilitate trade and to assist economies to implement their commitments under WTO TFA

8

2016/10/14

5

© GS1 [Country] 2015

Policy Recommendations

Overall objective to identify next steps to implement the commitments by Ministers and Leaders

• PSU study also aims to propose recommendations on future actions to enhance supply chain performance through the application of GDS which could include policy recommendations

9

© GS1 2015 10

No. Lead Economy Product Trade Routes Transportation

2015 1 Hong Kong Wine Australia to HK By Sea

2 Australia Boxed Beef Australia to US By Sea

2016 3 Malaysia Durian (Fresh/Frozen) Malaysia to HK & China By Air & By Sea

4 Peru Asparagus Peru to US By Air

5 Mexico Tequila Mexico to US By Land

2017 6 ABAC/LSIF Pharma TBC TBC

2

3

5

4

1

APEC GDS Pilot – OverviewPrimarily focusing on food supply chains

2016/10/14

6

© GS1 2015

APEC Policy Support Unit (PSU)

Pilot participants worked closely with Victoria University working on behalf of the APEC PSU to;

• Conduct an analysis to develop KPI’s that measure the benefits of GDS.

• Propose ‘policy’ recommendations on possible future actions to enhance SC performance through the application of GDS.

• Identify the next steps to implement the commitments by Ministers and Leaders on this issue, building upon existing APEC/ABAC work.

.

11

© GS1 2015

Beef pilots executed in 2015Overview

2016/10/14

7

© GS1 2015

Key Objectives

• Demonstrate how GDS can deliver direct

benefits for traders, customs & gov’ts

• Demonstrate how GDS compliments WCO AEO

programs (Trusted Trader)

• Reinforce use of barcoding for missing shipping

mark protocol (Beef Pilot)

• Demonstrate how to leverage GDS based

services including National Product Catalogue,

Recall portal & EDI via Transport Instruction

message & Au MeatMessaging Portal)

13

© GS1 2015

AU/US Beef Export Pilot Supply Chain

14

Courtesy of Google Maps

Transport to wharf(Chalmers Transport)

Shipping Line(Hamburg Sud)

Teys USCustomer

3PL Cold Storage

3PL Cold Storage

Shipping Line

Teys Australia(Meat Producer)

Brisbane

Longbeach Philadelphia

Shipping Line

New Zealand

Loading Container

GS1 AustraliaAU Customs

AU DoAg

GS1 USUS Customs

US DoAg

Picking & Staging

Port of Brisbane

2016/10/14

8

© GS1 201515

Beef Pilot: 10 supply chain events captured (AU leg & voyage)

Beef to USA

1.

Pic

kC

arto

ns

(Bee

nle

igh

)

2. L

oad

Car

ton

s in

to C

on

tain

er

3. P

ick

up

C

on

tain

er

4. C

on

tain

er

Arr

ives

(B

risb

ane

Term

inal

)

5. L

oad

Co

nta

iner

to

Sh

ip

6. S

hip

Sai

ls

7. O

bse

rve

Sh

ip

8. U

nlo

ad c

on

tain

er

fro

m S

hip

(A

uck

lan

d)

9. L

oad

Co

nta

iner

on

to S

hip

10

. Sh

ip S

ails

(A

uck

lan

d)

SUDU1189217

SUDU1103574

SUDU1173036

© GS1 201516

Beef Pilot: 5 supply chain events captured (USA leg)

Beef to USAcont’d

11

. Sh

ip A

rriv

esU

SA

12

. Un

load

Co

nta

iner

13

. Co

nta

iner

leav

es

14

. Co

nta

iner

arr

ives

at W

areh

ou

se

15

. Un

load

Pac

ksfr

om

Co

nta

iner

SUDU1189217

SUDU1103574 SUDU1173036 Longbeach

Philadelphia

Philadelphia

2016/10/14

9

© GS1 2015

EZTRACK was critical to success of both pilots used by participants to load and query critical SC event data and supported by GS1 HKC.

Use of Supply Chain Visibility Platform

17

© GS1 2015

Visibility Platform Search Options……

Trading partners and authorised 3rd parties and Government can search the visibility platform for information to assist decision making.

• Search for a specific pack number- urn:epc:id:sgtin:9332218.902017.010034310220

• Search for all packs by GTIN- urn:epc:id:sgtin:9332218.902017.*

• Search for all packs by Order #- 33790

• Search for Packs by Shipping Mark- TBN/33790A

18

2016/10/14

10

© GS1 2015

What Supply Chain benefits have been demonstrated….

> Visibility> Efficiency> Innovation> Integrity

© GS1 2015

APEC PSU Report on Global Data Standards prepared for CTI

20

• Reporting on Global DataStandards pilot projects

• Focus on beef exports fromAustralia to US; wine exports fromAustralia to Hong Kong

• Benefits were measured onefficiency; integrity; visibility andinnovation

2016/10/14

11

© GS1 2015

Report Findings: Need to manage risks associated with lack of visibility & traceability

• Lack of visibility and hence poor traceability of goods that move along the supply chains can challenge the APEC principles of Trade Facilitation

• Managing supply chain risks associated with lack of visibility and poor traceability of goods that move along the supply chains is crucial to enhance trade facilitation

• This is particularly relevant in the context of dealing with customs and border control agencies across different trading economies

• In this regard the use of GDS can play a crucial role

21

© GS1 2015

APEC Economies surveyed for the research indicated:

• Sensitive products such as pharmaceuticals and food productstraded cross-border were identified as a priority for traceability andsupply chain visibility

• APEC member economies could envisage global data standards beingintrinsic to assurance and compliance verification by tradeagencies such as Customs and food safety/biosecurity inspection

• Concerns regarding product inputs, the conditions of production,compliance with product assurance and quality systems, tamperingand biosecurity risks can translate into applications using the GDS toenable monitoring across borders, transport modes and supplychain events.

22

Report Findings: Product Integrity Benefits of using GDS

2016/10/14

12

© GS1 2015

Supply Chain Visibility benefits

23

• Beef: Supply Chain visibility increased traceability from 43% to 93%

• Visibility can be further improved using container tracking technology. Decision taken not to include in scope of pilots.

• Customs support container tracking for risk mgt.

© GS1 2015

Efficiency Improvements

Beef pilot: • Benefits quantified were associated with

savings in manual data entry ($57K pa - t’port EDI)

container demurrage / detention (US side)

Mitigating the impact of missing/damaged ship marks.

• Benefits from using GDS account for 0.67% of the value of this SC.

.

24

Automated messaging

used by only 14% of participants

in pilot

2016/10/14

13

© GS1 2015

Innovation

There is clear potential to leverage product master data for B2G.

Beef pilot: AU Meat Messaging system – online portal for creation, sending, receiving of information and compliance declaration to meet AU DoAg “Alternate protocol for managing missing ship marks for USA” and USDA-FSIS Notice 41-15.Cost: $5,000 ave lost product + $10,000 time & fees in mitigation per failure

25

$14.5m in lost meat exports in 2013 owing

to missing ship marks

© GS1 2015

Integrity

Defined as protection of product authenticity, management of defined risks & product quality.

Beef pilot: focus on compliance time / cost impacts on border clearance

procedures & traceability Using GDSN to provide product content to Gov’t

(future) attaining Trusted Trader Program status.

26

2016/10/14

14

© GS1 2015

Opportunities

27

• Develop further use of GDS in collaboration with local peak industry bodies & Government

• Promote and support Industry & Government use of GDS in Trusted Trader/AEO programs

• GS1 and ABAC continued support for APEC initiatives including the GDS SC Interoperability agenda

• Advancing the ability of industry to utilise data from visibility platforms

• Implementing GDS in domestic compliance systems related to freight operations.(eg GS1 AU Freight Labelling & T’port EDI stds)

© GS1 2015

Challenges

28

Key challenges to GDS implementation within APEC nations were identified as; • High investment costs • Regulations• Legal aspects

Also……

• The lack of EDI-enabled interfaces with border & trade regulatory agencies in pilots meant that GDS data identifying each item/transport asset/party must be uploaded manually causing errors & inefficiency.

2016/10/14

15

© GS1 2015

How to progress with GDS

• The report highlights that in order to progress with GDS regulators are in a position to encourage the adoption of standards to enable visibility in sensitive supply chains such as pharmaceuticals and certain food products where the visibility is critical for product safety and managing risk.

• A strategy was advised to facilitate the adoption of GDS led by industry and supported by governments.

Report findings: How to progress with GDS

29

© GS1 2015 30

Ongoing pilots focusing on food productsAsparagusDurian

2016/10/14

16

© GS1 2015

Opportunities & Challenges of 2016 Pilots

• Opportunities: expanded scope– More types of products: Fresh fruit & vegetables (Malaysia

Durian , Peru Asparagus)– Different modes of transportation: air and by truck– Additional scope: Risk management system study for cross

border agencies

• Challenges: stakeholders engagement – Involvement of cross border agencies at importing economies

(Durian to China, Asparagus to US)

31

© GS1 2015

Peruvian Asparagus to US

32

2016/10/14

17

© GS1 2015

Peruvian Asparagus to US

• Products:- Emerald Valley & MUCHIK fresh asparagus

• Current Status:- Finalizing business steps and completing technical development. 1st

shipment to be started by end Sep 2016- Interviewed Peruvian & US border agencies on risk management study.

33

© GS1 2015

Supply Chain Standards usedGS1 standards

GTIN Used on the product including Emerald Valley Fresh Asparagus(i.e. 0033383702209)Muchik Fresh Asparagus (i.e. 9336191000491)

SSCC – unique serial number – 18 numeric

Used on the pallet level for the above product

GIAI for truck id Used for the identify the truck – include truck license plate number

GIAI for the flight number

Used for the identify the truck – include flight number(i.e. LA601 – LAN Airline flight 601)

GLN– unique umber – 13 numeric

Peru Asparagus Processing HousePeru Asparagus Loading BayPeru Airport Terminal

EPCIS 1.1 GS1 Hong Kong ezTRACK

34

2016/10/14

18

© GS1 2015

Supply Chain Visibility Platform

35

© GS1 2015

KPI

• Increase supply chain visibility from 80% to 100%

• Reduce 10% cost in information searching time & cost

• Avoid 10% loss by temperature (cold chain) monitoring

• Reduce 20% response time in Acceptance/Reception of pallet, Truck attention and reduce 10% response time in Pallet assembly

36

2016/10/14

19

© GS1 2015

Malaysian Durian to HKC & China

37

© GS1 2015

Malaysian Durian to HKC & China

• Product: Musang King durian- Fresh whole fruit to HKC- Frozen durian to China

• Current Status:- Completed three shipments to HKC.

1st shipment to China started by end Sep 2016.

- Arranging interview with China Government agencies in risk management study.

38

2016/10/14

20

© GS1 2015

Supply Chain Standards usedGS1 standards

SGTIN – unique serial number

Used on the product including MUSANG KING/ D197 DURIAN (i.e. 9554100253367)XO / D24 DURIAN (i.e. 9555861100044)RED PRAWN / D175 DURIAN (i.e. 9555861100051)LABU / D163 DURIAN (i.e. 9555861100068)GOLDEN PAU / D13 DURIAN (i.e. 9555861100006)MILKY PAU / D28 DURIAN (i.e. 9555861100013)RED MEAT / D101 DURIAN (i.e. 9555861100020)

SSCC – unique serial number – 18 numeric

Used on the case level for the above product

GIAI for truck id Used for the identify the truck – include truck license plate number

GIAI for the flight number

Used for the identify the truck – include flight number(i.e. MH6114 – Malaysia Airline flight 6114)

GSIN – unique number – 17 numeric

Unique Consignment Reference No.(i.e. 95558611034054624)

GLN– unique umber – 13 numeric

Malaysia Durian Processing House (i.e. 9554100367675)Malaysia Durian Loading Bay (i.e. 9554100367682)Malaysia Airport Terminal (i.e. 9554100367699)

EPCIS 1.1 GS1 Hong Kong ezTRACKGS1 China EPCIS networkMIMOS EPCIS network

39

© GS1 2015

Interoperability

40

Event data upload to MIMOS

Event data upload to ezTRACK

2016/10/14

21

© GS1 2015

KPI

• Increase supply chain visibility from 40% to 100%. Support authentication that the Musang King Durian fruit is from Malaysia.

• Enable Real Time data capture and retrieval.

• 100% documentation compliance e.g. HACCP, Halal, MyGAP(Malaysian Good Agricultural Practices), SALM (Good Farm Practice Scheme Malaysia), Good Manufacturing Practices (GMP)

• Temperature to be recorded in the EPCIS platform for verification.

41

© GS1 2015

APEC Cross-border risk management research

42

2016/10/14

22

© GS1 2015

The APEC risk management -background

• We were asked to:- Examine border agency risk management systems (outside of the pilots)- Advise on how GDS could help improve agency risk management

• Approach – desk study on risk management systems and country interviews- So far Peru and United States and Malaysia complete- China to come

43

© GS1 2015

So what’s border agency risk management about?

• Border agency objectives:i. Timely and efficient clearance of wanted goods ii. Detection of unwanted goods crossing the border

• Risk management aims to efficiently identify the wanted goods, and then re-allocate agency resources to inspect ‘high risk’ potentially unwanted

44

The physical inspection trade-off

Potential of Global Data Standards

Agency costs Up Same

Clearance speeds / business costs

Down Up

Detection rates Up Up

2016/10/14

23

© GS1 2015

Where border agencies want to focus inspection efforts

Decide not to comply

Don‘t want to comply: effort & cost

Try to comply but don’t always manage

Consistently do the right thing

45

Trade volumesAgency effort

Regulatory Compliance Pyramid

© GS1 2015

Where border agencies can end up focusing inspection efforts due to:

Decide not to comply

Don‘t want to comply: effort & cost

Try to comply but don’t always manage

Consistently do the right thing

46

Data entry errors• e.g. wrong

port origin listed

Insufficient data• e.g. HS code for

products to broad for accurate identification

Data not timely• e.g. out of sync

with shipment

Non-unique data• Multi

addresses, spelling errors

GDS can help overcome these data problems and facilitate trade

2016/10/14

24

© GS1 2015

Border agency appreciation of GDS possibilities

• Border agency systems ‘proven’ and purpose built for the task:- Fairly standardised content declaration forms e.g. who, what, port of

origin…- But also localised requirements e.g. special import permits- Agency coordination growing – e.g. single trade windows

• Much border agency consignment information is already catered for in product master data fields – but largely unknown to border agencies

• Some GDS developments in the US: - US Consumer Product Safety Commission – using product recalls and

beginning to use GPC and GTIN at the border – very strong supporter- USFDA - rule making flexibility to adopt GDS e.g. Australian boxed

meat exports using meat industry EDI and GS1 identifiers

47

© GS1 2015

So how might this be taken forward

• Pilots should continue – but pilots need to be led by border agencies in partnership with business

• The focus of future pilots- progressively build value for agencies – e.g. provision of GPC

standard- add supplemental data to enhance existing agency processes,

in areas of high volume regular trading area e.g. packaged foods

- support ‘trusted trader/AEO programmes’ aimed at faster border clearance, where GDS could substantially enhance existing processes

- high risk goods – e.g. traceability and authentication high risk food and pharmaceutical products

48

2016/10/14

25

© GS1 2015

Next steps in APEC

• Final report due to be ready for APEC SOM1 2017 in Vietnam

• APEC PSU are also planning to issue a separate synthesis report that could combine the key findings from all five pilots.

• Final report will identify next steps to implement GDS in APEC and enhance supply chain performance through the application of GDS which could include policy recommendations

• APEC economies are looking to developing phase 2 of pilots with added functionalities

• APEC economies are working to implement GDS systems locally to support key areas of trade, AEO, single window etc.

49