Support a Sustainable Circular Economy with 2D Barcodes
Imagine a world where there is no waste. No landfill. No dumping of surplus production or export of rejected or used material, out of sight and mind. Embodied energy, carbon and other components are measured and managed through global supply chains and accounted for in accordance with industry standards and fundamental laws of physics. Matter and energy are neither created or destroyed, just transferred in form and place through responsible production and consumption systems. This is the circular economy.
In 2021, federal government product stewardship executives in Canberra made a point to remove the word waste from the environmental (then DAWE) policy lexicon. The simple and sound argument is that markets exist for all things used or new. Treasure and trash metaphors resonate, and one only needs to observe public interest in street-side garbage collection to realise demand and interest in reuse and recycling.
But what about the real waste? What about the packaging, the contaminated or spoil? You only need to order flat pack furniture to realise there is a problem with our current supply chains. Once your new table and chairs are assembled, the next challenge becomes what to do with the mountain of cardboard, polystyrene and plastic that council collections can often reject.
And food packaging waste. As I drag my family's yellow recycling and general waste bins up a flight of stairs, I am reminded and frequently amazed that the weight of what is leaving our household is not that much less than what we carried in, using our convenient and reusable plastic shopping bags. That’s saying something for a household with three very hungry growing teenagers.
So, what to do about it? I like to think the world has changed since my undergraduate economics training on ‘externalities’ and ‘environmental sinks’. As our world population heads towards 10 billion people and planetary constraints are becoming more apparent and hopefully better understood, it has never been more important to define practical sustainability measures – not just statements of principal.
There is a pressing need for practical measures to help industry navigate emerging regulation and transition to a more circular economy. People are looking for meaningful ways to make a difference.
A way forward
One of the most fundamentally important transformations required to navigate our way towards a more circular economy is already in motion. It began about half a century ago actually – about the same time as humanity first placed a footprint on the moon. I am referring to global standards for the identification of things – GS1 barcodes that appear on everyday products we make, buy, sell, use and dispose of via our ‘waste management’ systems.
The remarkable opportunity that GS1 barcodes provide is that they identify packaging material – it could be argued that they do a better job of identifying containers and packaging than what’s inside! What an amazing problem to have as we tackle issues like container deposit and re-use, recycling and right to repair movements.
Identifying things is important. In the words of a famous Austrian-American management consultant, Peter Drucker, if we can’t measure it then we can’t manage it. You don’t need to be an accountant or operations manager to realise the importance of this simple statement – especially in the context of products moving through global supply chains. However, what if you can’t identity the things you want to measure? What if there is no easy way of knowing where those things are? Who is responsible for them? What has happened to them over time?
Some of these questions are so fundamental they seem almost ludicrous to mention. Surely the world has this nailed down! Unfortunately, this is not the case. For 2-3 billion estimated products (think SKUs) in the world, only a fraction (somewhere between 300-500 million) can be uniquely and unambiguously identified using GS1-issued barcodes.
Barcodes and standards like GS1 have evolved over the past 50 years to address the issue of identification. More specifically, identification to capture and share (think measure and manage) information about products that move through our global supply chains – from ingredients to manufactured goods, retail and logistical units and more.
Yet today, we cannot easily distinguish one product from another of the same type. Fifty years on and a store/retailer cannot easily identify if an individual product/stock item being presented by a customer as a return, has actually been sold. If it was, then perhaps it was another store. We rely on receipts to mitigate stock fraud risk. Once the product has gone ‘ping’ at the cash register, most would argue the work of the infamous barcode is done.
Things are about to change
I could easily write pages on how 2D barcodes like QR codes are and will change society and the way economies work. Who would have ever thought a few years ago we would all be scanning QR codes to enter our local coffee shops or supermarket? That we would be navigating our way through hospitals or no longer using restaurant menus, now replaced by QR codes and mostly thanks to the Covid pandemic. This is global phenomenon – aided by technology and the incredible computing power we carry in our pockets and wrists (for those smart-watchers).
2D barcodes are not just about retailing. Sure, serialisation of items will almost eliminate losses thought untraceable returns, however there is much more upside. Products are now data carriers. They are and will have their own story to tell. They are becoming more functional and useful as the physical goods and related services are combined. Slightly abstract - we could think of them as having personality. Interact with me two days before my best-before date and I may tell you something useful. Consume me in the morning with eggs or perhaps, if it’s the evening (wherever you are or whatever language you speak), then enjoy me with a glass of South Australian Shiraz or a peppery Kombucha.
This is not all about the future. It is happening right now.
Woolworths currently scans over five million 2D barcodes per week across more than 1,000 Australian stores. The supermarket giant claims to reduce food waste by up to 40% and improve productivity by up to 21% for articles that have fully transitioned to 2D barcodes. Store operators generate over one million quick-sale labels per week, marking down items for rapid clearance or withdrawal based on product best-before information that is carried with the product.
What does this all mean for circularity and sustainability? How are 2D barcodes and advanced GS1 identification standards shaping up to support the world of more responsible production and consumption systems?
Reduce waste and spoilage
Modern supply chains are efficient and highly optimised, however wastage and spoilage remain colossal in some segments. The financial and economic cost of fresh produce spoilage is not just measured in terms of retail returns. Inability to trace product through supply chains has resulted in entire industries being shut down (think strawberries, rockmelon and chickens) with many family businesses going to the wall. Biosecurity threats (think Covid-19 tracing lessons learned) are much harder to navigate without the ability to rapidly identify, capture and share information about products, where they are and from where they came. The costs to taxpayers and citizens are also high with foodborne illness impacting national productivity, public health and safety.
Container deposit and returns
Ability to identify individual items moving through supply chains potentially changes container deposit business models. Barcodes on containers make product type identification possible. Serialised identifiers make it possible to track individual items – ensuring that one or more container return events are traceable. While serialisation may not be feasible or desirable for all product types, the combined benefit of enhanced in-store and stock control combined with post consumption container or package utilisation is compelling. 2D barcodes and related data carriers including RFID on products like tyres is making this future possible. In some cases, its being mandated by industry.
Materials identification, salvage and recovery
We often think of barcodes and identifiers through the lens of a consumer or retailer. Those familiar zebra stripes or square matrix structures on product packaging. GS1 and related standards go much further than we might think. The tracking of ingredients used in manufacture; the tracing of bulk commodity shipments, whether by pallet, container or consignment; the identification of agricultural chemicals applied to a parcel of land to grow grain or as pasture for livestock to graze. GS1 identifiers are pervasive and provide a mechanism for linking data through entire supply chains or rather, networks of connected supply chains.
As we are learning, this network extends well beyond the point of consumption. Like my kids who were brought up watching Bob the Builder and his three R’s ‘reduce, reuse and recycle’, society is increasingly focused on the consequence of their purchase and consumption decisions. Global business executives are increasingly conscious of social licence to operate risk and the consequence of giving circularity lip service. Mass media and public sentiment has devastated international brands and corporations found to be ‘greenwashing’ unfounded environmental, social and governance (ESG) claims. Global movements to regulate through digital product passports in the EU and other mechanisms are a sign of things to come.
Combatting illicit dumping
Goods that are difficult or impossible to identify become untraceable. Supply chain vulnerability is exploited by industries and countries that choose to transfer the challenge and cost of waste disposal and re-use to other parties. Fortunately, we do not have to rely on barcodes alone to unravel this mess with advanced and increasingly low-cost forensic science at our disposal to identify the origin, processes and parties involved in illicit dumping and trade.
Giving customers a choice
Lastly, the real and perhaps most important power that 2D barcodes provides is customer choice. As consumption decisions are increasingly supported by rich and real time data, consumers are being empowered to vote with their wallets – sending strong signals to manufacturers and producers about values and principles regarding resource use impacts, ethical sourcing, and a range of economic, social and governance factors.
As the world approaches the 2030 United Nations Sustainable Development Goals, global businesses will likely confront more challenging market requirements - driven in part by consumer sentiment and concern about their livelihoods, community and the world they live in and will pass on to their children – irrespective of their beliefs or understanding of global warming effects or other systemic changes.
If there is one area to keep an eye on in the near term it is digital product passports and new market access conditions as countries and governments focus on product conformity and compliance information – aligned with global sustainability and related ESG goals.
GS1 standards that support product authentication systems are based on a collective approach, involving all participants in the supply chain and setting together the rules to identify, capture and share data.
Global standards are industry driven. This is crucial to achieving real circular economy changes. With the empowerment of the economic players who generate, use and exchange product data. Consumers will gain access to trusted product information based on more transparency and structured exchanges among all partners along the chain.
For more information about GS1 standards and how they are being used by industry and government to address circularity and sustainability challenges please refer to the sustainability page.
If you would like to be directly involved in the global shift from 1D to 2D barcodes, you are welcome to join the Australian 2D in Retail Advisory Group. For more information on how to join please reach out to GS1 Australia.
About GS1 Australia
GS1 Australia is the Australian arm of the neutral, not-for-profit organisation that develops and maintains the most widely used global standards for efficient business communication. We are best known for the barcode, named by the BBC as one of ‘the 50 things that made the world economy’. GS1 standards and services improve the efficiency, safety and visibility of supply chains across physical and digital channels in 25 sectors. With local Member Organisations in 116 countries, 2 million user companies (over 22,000 in Australia) and 6 billion transactions every day, GS1 standards create a common language that supports systems and processes across the globe. For more information visit the GS1 Australia website.
