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

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Bruce Copeland
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1 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 Meeting Piura, Peru September 2016

2 APEC Global Data Standards (GDS) for improvement of APEC supply chains Patrik Jonasson October 2016 APEC Global Data Standards Background GS1 [Country]

Background The Global Data Standards (GDS) initiative has been driven by ABAC since 2012 Proposing that

control and supply chains for improved transparency and better risk management Result could be better

Global Data Standards received endorsement in the Leaders Declaration and in the Ministers Statement in

3 Background The Global Data Standards (GDS) initiative has been driven by ABAC since 2012 Proposing that Governments leverage business data and systems such as barcoding and data sharing platforms in cross border control and supply chains for improved transparency and better risk management Result could be better product visibility and improved efficiencies, faster clearance, less spoilage etc. Global Data Standards received endorsement in the Leaders Declaration and in the Ministers Statement in Beijing in 2014 with official support for pilot projects and again in the Ministers Statements 2015 & 2016 GS1 [Country] GS1 [Country]

4 APEC GDS Pilots Why? 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. Visibility 2. Efficiency 3. Innovation 4. Integrity 5 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. To the Australian meat exporters, savings could be around USD 15M in the Australia US meat supply chain per annum 6 3

APEC Global Data Standards Pilot Projects GS1 [Country] 2015 7 APEC GDS Pilots Project 2016 Expected Results Track progress and cost benefit analysis through pilot projects on application of GDS at

5 APEC Global Data Standards Pilot Projects GS1 [Country] APEC GDS Pilots Project 2016 Expected Results Track progress and cost benefit analysis through pilot projects on application of GDS at product level with the aim to: enhance supply chain visibility as related to traceability and expedited product admission while coping with existing customs clearance 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 chains 4. Depending on the results, encourage wider adoption of interoperable GDS to facilitate trade and to assist economies to implement their commitments under WTO TFA GS1 [Country]

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

application of GDS which could include policy recommendations GS1 [Country] 2015 9 APEC GDS Pilot Overview Primarily

Lead Economy Product Trade Routes Transportation 2015 1 Hong Kong Wine Australia to HK By Sea 2 Australia Boxed Beef

6 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 GS1 [Country] APEC GDS Pilot Overview Primarily focusing on food supply chains No. Lead Economy Product Trade Routes Transportation Hong Kong Wine Australia to HK By Sea 2 Australia Boxed Beef Australia to US By Sea 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 ABAC/LSIF Pharma TBC TBC 10 5

7 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 Beef pilots executed in 2015 Overview 6

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

Portal) 13 AU/US Beef Export Pilot Supply Chain 3PL Cold Storage Longbeach 3PL Cold Storage Teys US Customer Philadelphia Shipping Line GS1 US US Customs US DoAg Shipping Line Picking & Staging

8 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 AU/US Beef Export Pilot Supply Chain 3PL Cold Storage Longbeach 3PL Cold Storage Teys US Customer Philadelphia Shipping Line GS1 US US Customs US DoAg Shipping Line Picking & Staging Loading Container Teys Australia (Meat Producer) Transport to wharf (Chalmers Transport) Brisbane Port of Brisbane Shipping Line (Hamburg Sud) GS1 Australia AU Customs AU DoAg New Zealand Courtesy of Google Maps 14 7

Ship Sails (Auckland) SUDU1189217 SUDU1103574 SUDU1173036 15 Beef Pilot: 5 supply chain events captured (USA leg) Beef to USA cont d 11. Ship Arrives USA 12.

9 Beef Pilot: 10 supply chain events captured (AU leg & voyage) Beef to USA 1. Pick Cartons (Beenleigh) 2. Load Cartons into Container 3. Pick up Container 4. Container Arrives (Brisbane Terminal) 5. Load Container to Ship 6. Ship Sails 7. Observe Ship 8. Unload container from Ship (Auckland) 9. Load Container onto Ship 10. Ship Sails (Auckland) SUDU SUDU SUDU Beef Pilot: 5 supply chain events captured (USA leg) Beef to USA cont d 11. Ship Arrives USA 12. Unload Container 13. Container leaves 14. Container arrives at Warehouse 15. Unload Packs from Container SUDU SUDU SUDU Philadelphia Philadelphia Longbeach 16 8

Use of Supply Chain Visibility Platform EZTRACK was critical to success of both pilots used by

17 Visibility Platform Search Options Trading partners and authorised 3 rd parties and Government

Search for a specific pack number - urn:epc:id:sgtin:9332218.902017.

10 Use of Supply Chain Visibility Platform EZTRACK was critical to success of both pilots used by participants to load and query critical SC event data and supported by GS1 HKC. 17 Visibility Platform Search Options Trading partners and authorised 3 rd parties and Government can search the visibility platform for information to assist decision making. Search for a specific pack number - urn:epc:id:sgtin: Search for all packs by GTIN - urn:epc:id:sgtin: * Search for all packs by Order # Search for Packs by Shipping Mark - TBN/33790A 18 9

prepared for CTI Reporting on Global Data Standards pilot projects Focus on beef exports from

11 What Supply Chain benefits have been demonstrated. > Visibility > Efficiency > Innovation > Integrity APEC PSU Report on Global Data Standards prepared for CTI Reporting on Global Data Standards pilot projects Focus on beef exports from Australia to US; wine exports from Australia to Hong Kong Benefits were measured on efficiency; integrity; visibility and innovation 20 10

12 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 Report Findings: Product Integrity Benefits of using GDS APEC Economies surveyed for the research indicated: Sensitive products such as pharmaceuticals and food products traded cross-border were identified as a priority for traceability and supply chain visibility APEC member economies could envisage global data standards being intrinsic to assurance and compliance verification by trade agencies such as Customs and food safety/biosecurity inspection Concerns regarding product inputs, the conditions of production, compliance with product assurance and quality systems, tampering and biosecurity risks can translate into applications using the GDS to enable monitoring across borders, transport modes and supply chain events

Supply Chain Visibility benefits Beef: Supply Chain visibility increased traceability from 43% to 93% Visibility can be further improved using container tracking technology.

13 Supply Chain Visibility benefits 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. 23 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.. Automated messaging used by only 14% of participants in pilot 24 12

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

to meet AU DoAg Alternate protocol for managing missing ship marks for USA and USDA-FSIS Notice 41-15.

5m in lost meat exports in 2013 owing to missing ship marks 25 Integrity Defined as protection of product authenticity,

14 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 Cost: $5,000 ave lost product + $10,000 time & fees in mitigation per failure $14.5m in lost meat exports in 2013 owing to missing ship marks 25 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

Opportunities 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

15 Opportunities 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) 27 Challenges 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

16 Report findings: How to progress with GDS 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. 29 Ongoing pilots focusing on food products Asparagus Durian 30 15

17 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 Peruvian Asparagus to US 32 16

Peruvian Asparagus to US Products: - Emerald Valley & MUCHIK fresh asparagus Current Status: - Finalizing business steps and completing technical development.

18 Peruvian Asparagus to US Products: - Emerald Valley & MUCHIK fresh asparagus Current Status: - Finalizing business steps and completing technical development. 1 st shipment to be started by end Sep Interviewed Peruvian & US border agencies on risk management study. 33 Supply Chain Standards used GS1 standards GTIN Used on the product including Emerald Valley Fresh Asparagus(i.e ) Muchik Fresh Asparagus (i.e ) 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 EPCIS 1.1 Peru Asparagus Processing House Peru Asparagus Loading Bay Peru Airport Terminal GS1 Hong Kong eztrack 34 17

Supply Chain Visibility Platform 35 KPI Increase supply chain visibility from 80% to 100% Reduce 10% cost in information searching time & cost Avoid 10% loss by

19 Supply Chain Visibility Platform 35 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 18

Malaysian Durian to HKC & China 37 Malaysian Durian to

fruit to HKC - Frozen durian to China Current Status:

1st shipment to China started by end Sep 2016.

20 Malaysian Durian to HKC & China 37 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 Arranging interview with China Government agencies in risk management study

21 Supply Chain Standards used GS1 standards SGTIN unique serial number SSCC unique serial number 18 numeric GIAI for truck id GIAI for the flight number GSIN unique number 17 numeric GLN unique umber 13 numeric EPCIS 1.1 Used on the product including MUSANG KING/ D197 DURIAN (i.e ) XO / D24 DURIAN (i.e ) RED PRAWN / D175 DURIAN (i.e ) LABU / D163 DURIAN (i.e ) GOLDEN PAU / D13 DURIAN (i.e ) MILKY PAU / D28 DURIAN (i.e ) RED MEAT / D101 DURIAN (i.e ) Used on the case level for the above product Used for the identify the truck include truck license plate number Used for the identify the truck include flight number (i.e. MH6114 Malaysia Airline flight 6114) Unique Consignment Reference No. (i.e ) Malaysia Durian Processing House (i.e ) Malaysia Durian Loading Bay (i.e ) Malaysia Airport Terminal (i.e ) GS1 Hong Kong eztrack GS1 China EPCIS network MIMOS EPCIS network 39 Interoperability Event data upload to MIMOS Event data upload to eztrack 40 20

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.

22 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 APEC Cross-border risk management research 42 21

23 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 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 The physical inspection trade-off Agency costs Up Same Clearance speeds / business Down Up costs Detection rates Up Up Potential of Global Data Standards 44 22

24 Where border agencies want to focus inspection efforts Agency effort Decide not to comply Trade volumes Don t want to comply: effort & cost Try to comply but don t always manage Consistently do the right thing Regulatory Compliance Pyramid 45 Where border agencies can end up focusing inspection efforts due to: Insufficient data e.g. HS code for products to broad for accurate identification Decide not to comply Data entry errors e.g. wrong port origin listed Data not timely e.g. out of sync with shipment Don t want to comply: effort & cost Try to comply but don t always manage Non-unique data Multi addresses, spelling errors Consistently do the right thing GDS can help overcome these data problems and facilitate trade 46 23

25 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 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 24

26 Next steps in APEC Final report due to be ready for APEC SOM 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

FINAL REPORT Electronic system

FINAL REPORT Electronic system for Alternate protocol for managing illegible or missing shipping marks for the USA Project code: 2016.1047 Prepared by: Des Bowler Date Submitted: August 2016 Date Published: