“Nothing is as easy as it looks.” -old saying
In the first blog of this three-part series, I talked about how trade and commerce proceed best with shared communications and technology standards. In turn, the consumer enjoys the savings of removing the formidable problems and costs of interfacing different systems.
In the second blog, we brought things up do date discussing one of the remaining hurdles for cooperation in international trade—the quest for standards in universal product identifiers known generically as globally unique identifiers (GUIDs) or in the design of one leading proponent as global trade item numbers (GTINs) . Agreement on an international digital standard would greatly facilitate trade and commerce by enabling us to use GUIDs universally as primary keys in databases. Today’s digital technology and automation could then be leveraged to realize a wide range of benefits.
A few of these benefits include reducing inefficiency, uncertainty, and waste in the global supply chain while improving accountability and security with the precise identification of products, locating products anywhere in transit, deterring fraud and identifying counterfeit products, using data synchronization to update product information worldwide at a keystroke, and providing greater opportunities for companies to understand and personalize their marketing.
Today we’ll first talk about RFIDs, a widely used product ID technology that goes beyond the functionality available with bar and matrix codes. Then we’ll wrap up this series by assessing the current status of the search for an international standard for unique product identifiers.
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RFID is short for radio frequency identifier, product ID tags that embed microcircuitry for data storage, updates, and short distance radio transmission. Activated by a signal from a scanning device, they return a weak radio signal over a short distance without having to be in the scanners’ line of sight. The scanner can also process signals from more than one RFID at a time. RFIDs have enabled warehouse inventorying times to drop from days to minutes.
Cheap and cost-effective, they’ve been produced in a variety of sizes for a wide range of applications. Common uses include hotel room “key cards,” “auto passes” for toll roads, and keeping track of items on assembly lines. Healthcare facilities, railroads, car rental agencies, shipping containers, and the military all use RFIDs to tag equipment that is reused, making it as easy as coming within range of scanners to update their use and whereabouts in automated inventory databases, thereby obviating much of the costly hands-on administration methods of the past.
Found everywhere today and expected to figure even more prominently in tomorrow’s “Internet of Things,” the widespread adoption of RFIDs, like much of the technology of Big Data has alarmed some citizens’ groups with privacy concerns related to would-be snoops being able to gather information from RFIDs embedded in the products a person uses. In this digital age though, as with any knowledge, tool, or technology ever developed, the responsibility to use it wisely and beneficially lies with us
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Now wrapping up, we should ask, given the undeniable benefits of an international digital GUID standard, how far along is the effort?
Unfortunately, not as far along as you might expect.
Problems related to agreement on a GUID standard include determining the “taxonomy” of categories so that one can assign a unique digital code to any product based on its categories and on distinctions within categories called “attributes.” But consider for example whether “men’s shoes” should be a separate category or whether “shoes” should be the category with gender represented as an attribute. And what about the types of “dress shoes” or “athletic shoes”? How many subcategories for each?
Agreeing on the taxonomy’s categories is hampered further by the different ways that countries have already categorized shoe sales for their own tax purposes. Multiply these issues by the vast number of candidate items for GUIDs in the world marketplace and you begin to get an idea of the problem.
On the practical side, problems include significant costs for a business seeking a GUID for a product they produce. Currently a UPC code for a product can cost as much as $50,000, leaving many small and midsize businesses feeling that the ROI doesn’t justify their participation. Applications for UPCs and other GUIDs also entail a considerable exchange of paperwork because GUID-issuing bodies such as GS1 must invest a significant amount of time and effort to make sure that the application refers uniquely and unambiguously to the product. A number of applicants have already submitted information intended to game the system and confuse their product with other products—a ploy that defeats the very purpose of the system.
For these reasons, many observers and participants in the discussions are becoming skeptical that implementing a GUID standard will be solved with this approach, despite the obvious advantages in doing so.
What then?
Will we ever be able to reap the efficiencies a universal digital GUID standard would bring or will the flywheel of commerce continue to wobble from the instabilities of uncertainty, fraud, and waste? What level of confidence can we afford that what we think we’re buying is what we’re getting? Are we condemned to a certain degree of risk and uncertainty in international (and online) commerce that will continue to hinder a fuller flowering of trade and participation?
Currently losses due to just the counterfeit problem alone can cost large companies, millions every year to protect their brands. Global counterfeiters are expected to rake in more than $1.7 trillion (!) in 2015 and see their piece of the pie increase by 22 percent. Long associated in the public mind with luxury goods and digital entertainment industries, counterfeiters have long since managed to embed themselves and sow doubt in all sectors of the economy from food and pharmaceuticals to commodities, energy, and the building trades.
My guess though is that in an economic system such as ours where problems represent opportunities, possible solutions may already be in the works. When the combined synergies of entrepreneurs seeking to make a real difference in the world intersect with an opportunity that can be calculated as a percentage of the trillions of dollars that would be saved by the use of GUIDs as a world-spanning standard—can an innovative solution be far off?
Consider some of the approaches already in use or being discussed. One method currently uses invisible but indelible DNA markers that can’t be replicated by counterfeiters. These are already being used to verify the authenticity and quality of fabrics and metals. Some folks have suggested that at its current pace of development, photo-recognition software might one day present itself as the solution. Others speculate that technology developed by the space program such as that used by the Mars Rovers to examine the compositional fingerprints of terrain it travels over, might be adaptable on closer look. It wouldn’t be the first time that technology developed for space exploration has come home to earth to the benefit of mankind.
Indeed, an effective joint public-private effort might take the form of a private company adapting technology developed by government funded research too costly or too speculative for private companies to undertake initially. Initial basic research seeded by government-enabled industry to spin off advanced ideas that resulted in many of the amazing advances in technology we take for granted today. Far-sighted entrepreneurs pragmatically keep abreast of fundamental research looking for results that may be ready for application to outstanding problems. Some NGOs have argued against a proprietary solution, but the right remedy from the private sector would render those arguments moot. The importance and size of the problem indicate that such an innovation could realize returns of staggering value.
Finally, I opened this series with a quote from Walt Whitman that I thought nicely reflected the challenge of universal GUID standards and adoption.
I thought it might be appropriate then to close out with a few further quotes to challenge and inspire our readers to seek solutions to these issues.
“The art of art, the glory of expression and the sunshine of the light of letters, is simplicity.”
―Walt Whitman
“You will hardly know who I am or what I mean,
But I shall be good health to you nevertheless,
And filter and fibre your blood.
Failing to fetch me at first keep encouraged,
Missing me one place search another,
I stop somewhere waiting for you.”
―Walt Whitman, Song of Myself
“Passage to you, your shores, ye aged, fierce enigmas!
Passage to you, to mastership of you, ye strangling problems!”
—Walt Whitman, Passage to India
“Now, Voyager, sail thou forth, to seek and find.”
―Walt Whitman
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