Probably one of the most asked questions we continue to receive is "What is the cost of implementing the GTIN into my company?" Not only is this an excellent question but one which, unfortunately due to the complexity fo the implementation process for the GS1 standard, is one where the answer is different for every company.
The costs associated with the implementation of the GS1 standards is a well kept secret. Not necessarily intentional however. There are 4 elements that need to be addressed and all of them have a cost associated with them.
1. Cost of the numbers themselves: This is dependent upon internal factors for each company, dollar volume and the amount of numbers needed primarily. One company told me they paid $18,000 for 18 numbers. I've heard ranges from $800 to $30,000+. The annual renewal fee, we've been told, is anywhere from $500 to several thousand dollars. Also, companies in our industry just do not keep the same products. Enhancements, changes, recipes, packs can all require changing or adding numbers which is not free.
2. Software modification: This gets little attention but can be extremely costly for some and minimal for others. The GTIN is 14 digits and companies that don't have the capacity for that number of digits can have considerable expense to accomodate that. One chain store of over 200 stores told us that that cost for software adaptation to be able to properly use the GTIN in their system was a 6 digit number for them, and the first number was not a 1! Most companies can adapt easier perhaps but there is software programming and modification costs that will occur.
3. Hardware: At least for the grower/shipper community, this is generally a new expense and others that may require it if they are not currently using the right scanners for companies that need to scan. You have to be able to scan the GTIN to get it into your system typically. What does a scanner cost? My guess is $500 to $1500. How many does a company need? That varies of course but if a company is using them in a warehouse full of product and forklifts, it could be quite a few and some will most likely be damaged each year so it is a continuing cost to some extent.
4. Personnel: You can't add all this without having that area managed and in MANY cases that will be an additional employee. This has been confirmed to us by more than one company is their estimation.
The PMA (Produce Marketing Association) stated in their submission to the FDA last year that the implementation of the GTIN would cost the industry "hundreds of millions" of dollars and take years to implement.
Finally, a comment. The FDA hired the IFT (Institute of Food Technologists) last September to do a study on traceability in the industry currently, what is available and how effective current practices are (thats's a summary, not a verbatim). They are required to submit a report to the FDA this September with their analysis of traceability AND their recommendations. We look forward to that report and subsequently getting some direction and understanding from the FDA as to what they are going to require. The amount of legislation on food safety, traceability, epidemiology and other areas is at a record level with at least 10 pieces of legislation written or being written. Whatever the final direction is going to be has not been determined yet. We shall see.
