Participants of the business breakfast “Shoe Labeling in Russia” are about preparing for the introduction of mandatory shoe marking in the country.

During the event, participants in a business breakfast, managers and owners of shoe companies; the managers and logisticians responsible for the procurement and delivery of goods, IT directors and managers had the opportunity to ask all the questions they were interested in to the project manager of the Light Industry Center of the Center for Social Development and Trade Vera Volkova.

The past business breakfast, one of a number of explanatory events on the organization of the shoe labeling process, which took place this year with the participation of representatives of the MDCT.

Shoe marking may become mandatory in Russia as early as July 1, 2019 of the year. At present, the first stage of the labeling experiment is underway, to which Russian companies, shoe manufacturers and importers, the most important participants in the process, are invited to participate. At this stage, many points remain unfinished. Such meetings between business representatives and developers not only help to understand the proposed technology, but also help to identify gaps, bottlenecks, and a process that should be fully debugged over the next eight months.

At the meeting, Shoes Report tried to find out how the shoe industry companies are preparing for mandatory labeling, what issues they care about in the first place. Comments on the topic provided Zinaida Zheleznyak, General Director of Benita, the company-official distributor in Russia of shoes by Spanish manufacturers Piesanto, Spiffy, Luiza Belly, Juan Maestre, Commercial Director of the Russian representative office of Salamander LLC Salamander in Russia Valery Sidorenkov и CEO of DK Fashion Group Sergey Zelenetskiy.

Zinaida Zheleznyak - CEO of Benita

“The upcoming shoe labeling brings a certain concern to the life of every shoe maker, whether it is a retailer or a wholesale supplier of goods - this affects literally everyone. Yes, of course, we are preparing for labeling, we are compiling a list of tasks for our company, trying to understand what difficulties may arise from the point of view of IT, we are closely following the news on this topic. ”

Valery Sidorenkov - Commercial Director, Salamander in Russia

How is Salamander preparing to introduce mandatory labeling in Russia?

Valery Sidorenkov: We participate in all preparatory events where issues regarding upcoming labeling are discussed. We try to ask as many questions as possible, aimed at clarifying the technical aspects of the implementation of the system and information exchange with partners. We also actively engage in dialogue with the developer of our accounting system; it is important for us that they also have an understanding of all the requirements and necessary improvements. Inside the company, we are formulating the schedule of upcoming innovations and an algorithm for switching to a new model of cooperation. They began to negotiate with their suppliers on the upcoming changes.

What, in your opinion, will present the greatest difficulty in organizing the labeling process for your company?

Valery Sidorenkov: There are several points. Firstly, to implement the project, it is necessary to integrate a large number of foreign partners into it, until now many of them do not imagine not only the technical side of the project itself, but most importantly - its goals and objectives. At the same time, the low degree of its elaboration on the part of the initiators only intensifies this misunderstanding. Secondly, the introduction of such labeling will require a restructuring of the manufacturing processes of suppliers / manufacturers. To do this, a Russian company needs to be a truly significant client for a foreign supplier. For us, the greatest difficulty is our supplier base - among them there are both real manufacturing factories and suppliers of goods “from stock”. For each of these categories, the labeling model has its own characteristics, and they need to be worked out each separately. Another difficulty is the work with inventory balances, which will have to be done by July 1, 2019. This is perhaps the most painful question, since there are unclear points regarding the implementation of this process.

From an IT perspective, what difficulties will arise? Is your company’s IT staff qualified to carry out the labeling process?

Valery Sidorenkov: Now it is difficult to give a definite answer. If at such meetings the intermediate results of the companies participating in testing were more widely presented, then it would be somewhat easier for everyone to make forecasts and plans in connection with the integration of the information system.

How will you train staff to generate codes? Will you print labels yourself or through intermediaries? How do you see this process?

Valery Sidorenkov: We have a well-established model of training sales staff in stores, as well as office employees involved in the supply chain. I think this is not the most time-consuming and complicated procedure.

In your opinion, what are the flaws in the organization of the marking system?

Valery Sidorenkov: The technology for exchanging generated codes with suppliers is poorly developed - the proposed model for sending codes in the form of pdf files does not look up-to-date. The rejection of the use of cloud exchange is the creation of unnecessary difficulties that could be dispensed with by spending less resources. Well, the lack of synchronization and the differences in the labeling system between the EAC countries are absolutely ridiculous, which creates the risk that goods imported through the EAC countries will have to be marked several times, taking into account the labeling standards of different countries, including those , through the border of which the goods will pass.

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Sergey Zelenetskiy - CEO of DK Fashion Group

How is your company preparing to introduce mandatory labeling?

What a small business will have to face is the transfer of the entire document flow into an electronic document flow system. With all clients, especially with small regional LLCs and individual entrepreneurs, it is necessary to conclude an agreement on interaction in the electronic document management system, and to ensure that they fulfill their contractual obligations. First of all (before the introduction of marking), we are preparing to introduce an electronic document management system into our accounting program. We are finalizing the software, developing control algorithms.

What do you think is the most difficult in the marking system? What will be the most difficult to implement in your company? What tasks will have to be solved?

The most difficult thing in the labeling system, in my opinion, is the information overload of the process, accounting for individual brands will require new equipment, other accounting methods, and attracting more human resources to ensure the process. A huge problem is the physical plywood of all the remnants of the warehouses, on the one hand, the personnel for the plywood must be qualified enough to correctly paste over the shoes, on the other hand, cheap and in large quantities, since there are a lot of unsold leftovers, especially in retail. The development of new standards for loading and unloading operations and their implementation will also require close attention. 

From an IT point of view, what difficulties will arise? Is your company's IT staff qualified enough to carry out the labeling process?

It will require an increase in the computing power of database servers, the introduction of new equipment for reading 2D codes in warehouses and retail. About the completion of the software once again you can not talk. I can’t imagine how small organizations will survive, often operating on outdated programs and equipment. 

How will you train staff to generate codes? Will you print labels yourself or through intermediaries? How do you see this process?

In my opinion, for wholesale and retail companies, the formation of codes is a one-time operation, primarily associated with obtaining codes for balances. In the future, this work will fall on the shoulders of importers and manufacturers, we do not expect great difficulties. We will receive the labels ourselves, since the process as a whole is understandable and, if it does not complicate, we are fully capable of implementing it on our own.   

In your opinion, what are the flaws in the organization of the marking system?

Deficiencies relate to returns from retail customers, especially within two weeks, as additional issue of individual brands is required, although it is more logical to leave a brand that is already on the box. The process of releasing returned merchandise will be delayed.

What questions did the organizers have after the event?

An individual brand for a product has a GTIN and a crypto-tail, the crypto-tail is not stored either in the counterparty databases or in any open sources, how will the legality of using the full individual brand be controlled if we can only reflect GTIN in the cash register and cashier's checks, not yet clear.