Setting the Standards: Is Patience a Virtue?

Oct 14, 2004

By Bill Bittner

For years, the members of the retail supply chain have worked on technical standards ranging from Bar Codes (a huge success), to EDI, CPFR and now, ebXML and RFID. The effort has been conducted under committees formed by various standards organizations, such as the Uniform Code Council, EAN International, Global Commerce Initiative, Voluntary InterIndustry Commerce Standards, and EPCGlobal.

Under all these efforts, the role of the standards organization has been to act as a facilitator, helping the technical and business users define their requirements and creating the documentation that describes the standard. Once it is established, they work to communicate the standard throughout the business community and if registration (e.g. UPC Manufacturer ID) is required they provide the administration needed to support the standard.

While participating in the standards initiatives, major players like Wal-Mart and Dell have found it necessary to establish their own approaches in order to support their business models. They have not abandoned the general standards, but both companies were unwilling to wait for the “consensus process” to reach a conclusion. With such a significant business presence, each was able to dictate how their suppliers should support them and gain even further advantage over their competition.

By their very nature, standards by consensus take time to develop and cannot satisfy everyone. As we move further into process oriented standards such as Collaborative Planning, Forecasting, and Replenishment, it becomes even more challenging to reach a consensus because different organizations will have different internal approaches and capabilities. The longer it takes the general community to reach a consensus, the longer major players can dictate their own proprietary solutions.

Moderator’s Comments: Are smaller organizations hurt by the current standards model? Is there another model that could speed up the standards process?
Should standards organizations be allowed to take a more pro-active role? What changes could lessen the advantage of major players?

When I think of the effort to establish standards, I am reminded of a definition of politics I once read: “Politics is the art of reaching a consensus where
no unanimity exists.” While unanimity is not necessary for many political decisions, technical standards often require it.

The enormity of this task can be seen in establishing standards for the EPC (the current RFID effort). The original goal was to establish standards that
provided item level tagging to facilitate “hands off” POS checkout. This required tag standards, ONS Standards, and an “EPC Information Service” to be in place. Wal-Mart recognized
the enormity of the task and emphasized the initial need to identify pallets and cases. This greatly reduced the scope of the problem and moved things forward.

Perhaps a way to reduce the time needed to establish standards is to reduce their scope. By recognizing an evolutionary approach to new standards, experience
can be gained by taking the “little steps” while also reaping some of the benefits. If all the participants understand that they are only deciding on the “first step,” there is
more chance for unanimity and an ability to move forward.

Bill Bittner – Moderator

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