In the field of digital procurement, data connectivity and sharing serve as the foundation for supply chain collaboration, and product coding constitutes the underlying data of goods, forming the basis for the digital transformation of procurement. However, in the realm of digital procurement, the lack of uniformity in product coding across various stages results in chaotic and disorganized data structures and formats, making it difficult to swiftly and accurately collect and aggregate basic data such as raw materials and industrial products. This situation adversely affects supply chain collaboration.

The China Goods Coding Center, as a specialized organization responsible for the unified organization, coordination, and management of product barcodes, and automatic identification technology in China, promotes product barcodes as the "identity card" for goods circulation and the "passport" for international trade, possessing inherent advantages in standardizing product coding.

According to research by the YiBang Think Tank, in the MRO (Maintenance, Repair, and Operations) industrial sector, which is an important branch of digital procurement, the coverage rate of product barcodes is still less than 30%. What are the difficulties in applying product barcodes in the MRO industrial sector? What measures should be taken to enhance the application of product barcodes in the MRO industrial sector? In response to these questions, the YiBang Think Tank conducted research with suppliers such as XiYu and ZhenKunXing, as well as JD Industrial, and jointly organized a seminar with the China Goods Coding Center on "How to Standardize Product Coding in the Procurement Supply Chain Field," delving deeper into these issues.

01Product Barcode Coverage Rate in the MRO Industrial Sector

Less Than 30%

MRO, short for Maintenance, Repair & Operations, typically refers to materials and services used for maintenance, repair, and operation of equipment in actual production processes that do not directly constitute products. In other words, MRO industrial products are non-production raw materials. A typical characteristic of the MRO industrial sector is its long industrial chain, with highly dispersed upstream entities involving dozens of industries and millions of manufacturing enterprises of varying scales. Downstream, it covers diversified enterprise users across various industries, with a long distribution chain and extremely complex supply chain management. In such an industry involving multiple industry participants and offline channels in the distribution system, the difficulty of standardizing product coding has become a common challenge. In the field of digital procurement, product barcodes serve as an important lever for standardizing product coding. According to research by the YiBang Think Tank, in the office supplies industry, the coverage rate of product barcodes has exceeded 95%, while in the MRO industrial sector, the coverage rate of product barcodes is still less than 30%. The main reasons are as follows:

1. Weak Foundation for Applying Product Barcodes in the MRO Industrial Sector

In recent years, with the rapid development of e-commerce, online transaction volumes have increased year by year, and the variety of traded goods has gradually expanded. Looking at the popular categories on mainstream e-commerce platforms, they are still mainly dominated by general categories such as clothing, digital products, and home appliances, continuously expanding into vertical category sub-segments. Moreover, large enterprises such as central SOEs have established their own e-commerce platforms, which have become mainstream, with platform transaction categories primarily consisting of general commodities such as office supplies, gradually expanding to include MRO industrial products and bulk commodities. According to the "2023 Digital Procurement Development Report," over 80% of central SOEs conducted online procurement of office supplies in 2022, while only over 40% of central SOEs procured MRO industrial products through digital means. It can be seen that compared to other general commodity categories, e-commerce platforms pay less attention to MRO industrial products, leading to an incomplete management system for related products in this field, resulting in a weak foundation for the application of product barcodes and a lower level of application of product barcodes.

2. MRO Industrial Products Have Millions of Product SKUs, Posing Challenges for Coding Identification

Currently, mainstream MRO industrial platform product SKUs are all in the millions, with some platform product SKUs exceeding tens of millions. Taking JD Industrial as an example, the platform has achieved digital product SKUs exceeding 30 million. Due to the large number of product SKUs in the MRO industrial sector, there are many types of packaging, such as different textures, designs, and labeling information on the packaging. These differences pose difficulties and challenges for coding identification work. Specifically, due to the diverse types of packaging materials for MRO industrial products, multiple printing technologies may be required to print product barcodes. It is necessary to determine and select whether "one-dimensional barcodes" or "two-dimensional barcodes" are appropriate, as well as to determine which granularity of printing is more suitable, posing significant challenges to coding identification for MRO industrial products.

3. Upgrading and replacing industrial products is relatively frequent, making the coding system relatively complex.

A typical characteristic of the MRO industrial product sector is the frequent upgrading and replacement of products. For example, there are continuous upgrades in terms of performance, materials, and technology. When these changes occur, corresponding product barcodes also need to be adjusted accordingly. For most small and medium-sized MRO industrial product manufacturers or brand owners, they need to continuously allocate new product barcodes for updated products and manage product coding. This poses a significant challenge for the investment and management of product barcodes because MRO industrial product manufacturers have a large number of different products. Applying product barcodes requires a significant investment in code segments, and later maintenance and management also require a significant investment of manpower and resources, increasing costs accordingly.

4. MRO industrial products have a wide range of applications, but the scope of application of product barcodes is still limited.

The MRO industrial product industry chain is long, and the usage scenarios are also quite extensive. However, currently, only some suppliers, central SOE e-commerce platforms, and service providers in the industry chain apply product barcodes for MRO industrial product management, resulting in a relatively limited scope of application of product barcodes. In channel management, due to the fact that some distributors still use their own labeling more often, supply chain management information cannot be shared. In inventory management scenarios, most warehouses also use their own coding methods, and their item coding is not connected with other scenarios, resulting in the platform being unable to effectively schedule inventory items and allocate the best inventory management and distribution routes.

5. There are many participants, but awareness of applying product barcodes is insufficient.

The MRO industrial product industry chain is relatively long, with many participants. Upstream, there are manufacturers/brand owners, with roles such as general agents, provincial agents, municipal agents, distributors, and wholesalers in the middle. Downstream, there are end factories, large enterprise users, retailers, etc. These participants have their own product coding systems, and awareness of applying product barcodes is insufficient. They only understand that product barcodes can be used in supermarket retail scenarios, and they are not familiar with the widespread application of product barcodes in areas such as medical care, e-commerce, logistics supply chains, food safety traceability, and public procurement. At the same time, MRO industrial product suppliers or platforms have never consulted the China Goods Coding Center when coding, and they are not aware of using product barcodes organized, coordinated, and managed by the China Goods Coding Center, resulting in a low usage rate of product barcodes in the MRO industrial product field.

02 Exploring Barcode Application in the MRO Industrial Sector

To address the low popularity of barcode application in the MRO industrial sector, we propose the following strategies and suggestions:

1. Actively establish a standardized barcode system for MRO industrial products based on data standards, identification standards, and application standards.

Currently, the lack of a comprehensive product coding standard system in the MRO industrial sector has become a common challenge in the industry. The China Goods Coding Center has established group standards related to barcode applications in public procurement. In the future, efforts should be made to expand the scope of standard application and actively explore the establishment of corresponding barcode application standards in the MRO industrial sector.

Establishing barcode application standards for MRO industrial products should be based on the underlying data of MRO industrial products, standardizing their data formats and structures, and constructing data exchange mechanisms to achieve data standardization and sharing. Based on data standards, create barcode identification standards, such as identifying product locations, packaging, global trade information, etc. At the top level, establish application standards to establish relevant specifications for applications such as product management and inventory management.

2. Start by applying barcodes to traditional categories of MRO industrial products.

The MRO industrial product sector involves a wide range of industries, with upstream including dozens of industries and millions of manufacturing companies of various sizes, such as components, office supplies, hardware tools, etc. Therefore, for scattered MRO industrial products, starting with traditional industrial product categories such as hand tools, police components, pipes, and valves, which have relatively standardized specifications, is easier to use barcodes. For example, low-voltage electrical products, the specifications and parameters of low-voltage electrical products are relatively stable and have not changed significantly for a long time, which can be used as the starting point to promote the application of barcodes for MRO industrial products. With the accumulation of experience and the improvement of standards, the scope of barcode application can be gradually expanded and the barcode coverage rate of the industry can be improved, ultimately establishing a comprehensive barcode application standard system for MRO industrial products.

3. Promote "source coding" for MRO industrial products.

The phenomenon of "one product with multiple codes" caused by non-manufacturers or brand owners coding has always been a problem that needs to be improved and solved urgently in the procurement field. Therefore, we must adhere to the principle of "one product, one code, source coding" to ensure that MRO industrial products are coded when they leave the factory and are used throughout the procurement supply chain.

In this way, the occurrence of "one product with multiple codes" can be avoided, and precise identification of MRO industrial products can be achieved. This not only ensures the transparency and accuracy of product information but also helps purchasing parties objectively compare products, improve purchasing transparency, and effectively avoid malicious coding, malicious competition, and other adverse phenomena in the procurement process.

4. Promote barcode penetration throughout the procurement, channel, inventory, and other full-chain scenarios of MRO industrial products.

To establish a complete barcode application standard system for MRO industrial products, we must not only implement "source coding" but also promote barcode penetration throughout the supply chain in procurement, channels, inventory, and other scenarios, implementing "one code to the end," and promoting collaboration in various links of the supply chain to enable sharing of supply chain data and information, improving supply chain operational efficiency.

By connecting MRO industrial product supply chain nodes with barcodes, scanning and identifying barcode information at various stages of the supply chain can automatically collect, track, and analyze information from all parties involved in the supply chain, including production information, product information, sales information, and logistics information, thereby realizing real-time tracking of production progress, product sales, and logistics operations, and achieving integration of industry chain information resources and supply chain collaboration.

5. Include more MRO industrial product barcode information in the China Goods Information Service Platform to achieve external integration and sharing.

Creating a shared product database to achieve accurate and transparent data and interconnection is also one of the key factors driving the industry's development. The China Goods Coding Center has built a commodity information service platform based on barcode keywords, establishing the world's largest commodity information database, which is suitable for all global commercial transactions, covering basic metadata related to trading participants, commodities themselves, marketing promotions, and logistics transportation. It is a powerful foundation for unified, accurate, and timely sharing of commodity information by enterprises throughout the supply chain globally.

For the MRO industrial product industry, promoting the application of barcodes and accelerating the inclusion of MRO industrial product barcodes and related product information into the China Goods Information Service Platform will standardize MRO industrial product information. Through the product database, product brand, specifications, parameters, and other information can be obtained to achieve the connection and sharing of MRO industrial product information, facilitating better connection and integration of industry-related information.

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Cross-border e-commerce logistics Bai xiaosheng