This article is based on an article originally published in CurrencyThe money used in a particular country at a particular time, like dollar, yen, euro, etc., consisting of banknotes and coins, that does not require endorsement as a medium of exchange. More News in September 2017 and is reproduced with permission of the editor.
US cashMoney in physical form such as banknotes and coins. More handling logisticsThe term originates from military language and refers to the movement and provisioning of troops at war. In today’s business vocabulary, it refers to the management in particular, the transportation, storage and distribution of finished goods. More are about to get a lot more seamless, following an announcement that the 12 Federal Reserve Banks have signalled their commitment to adopt global standards for supply chain logistics and package tracking through FedCash® Services, their service to help ensure that depository institutions have sufficient supplies of currency and coinA coin is a small, flat, round piece of metal alloy (or combination of metals) used primarily as legal tender. Issued by government, they are standardised in weight and composition and are produced at ‘mints’. More to meet public demand.
The chosen standard is from GS1System encompassing global standards for identification of products, associations, services and localisations and for the exchange of data. It is widely used in supply chains across industries and activities around the world. More US, part of the global organisation that develops and maintains standards for supply chains across multiple sectors. Its adoption will form the basis for a multi-year effort that will involve not only internal changes, but also the way the Fed interacts with the armoured carriers and customers.
This announcement comes two years after the launch of the GS1 US Cash Visibility Discussion Group to create a standardised framework for identifying, tracking and electronically exchanging information about cash as it moves through the supply chain. This group is composed of GS1 US, the Fed, financial institutions, armoured carriers, retailers and solution providers.
Under the current arrangements for the deposit and withdrawal of cash from commercial cash centres, it can take up to six hours to transfer cash packages from an armoured vehicleA vehicle armoured with iron or steel plates that protect the people and objects inside. More to a receiving vaultSafe; strong room. A place reinforced with special security measures where high-value objects and documents are safeguarded. In central banks, banknotes and other objects are safeguarded in vaults. More, since the hundreds of packages on the truck must be manually recorded and individually reconciled against a paperSee Banknote paper. More manifest as they changeThis is the action by which certain banknotes and/or coins are exchanged for the same amount in banknotes/coins of a different face value, or unit value. See Exchange. More hands.
Lacking advance knowledge of what is in a shipment or a specific package, inventory planning and workforce management can also be a challenge. And when problems arise, researching paper records to resolve the problem can take days.
Industry participants say these practices are inefficient, time-consuming, error-prone and, above all, unnecessary.
The retail, apparel and food service industries realised decades ago that they could reduce costs and errors by adopting standardised package identifiers like Universal Product Codes (UPCs) and electronic message formats to drive major efficiencies in their supply chains.
More recently, a number of central banks in Europe have used the same standards for their cash supply chains and have realised benefits in terms of improved transparency, accountability and efficiency. Examples include the CashEDI system deployed by the Bundesbank and a number of others within the Eurozone.
So the Fed is now taking a leaf out of their book. Recognising that the benefits of standards are not realised without broad adoption, it is working with financial institutions, armoured carriers, merchants and solution providers to collectively adopt the same open messaging and identifier standards these other industries have developed with the support of GS1. This work is taking place under the banner of Cash Visibility.
In a nutshell, the Cash Visibility vision is a cash supply chain without paper manifests or deposit tickets. Instead, all cash packages will have a globally unique barcodeMethod for encoding information, which can be read by machines. Barcodes store information using a combination of printed parallel lines (bars) and in the spaces that are left between them. Reading stored data is performed using optical readers. More (radio-frequency identification, or RFID, tag) called an SSCC (Serial Shipping Container Code) that can be scanned and automatically reconciled against an electronic shipping manifest (eManifest).
Using the eManifest and these identifiers means that the transfer process for cash should drop from an average of six to around one or two hours, resulting in dramatic efficiency improvements in terms of vault and delivery personnel, and equipment,
The eManifest will include a globally unique identifier (Global Location Number or GLN) for the shipper of each and every package, so deposit tickets will be unnecessary, and accounting records will be more accurate. And if packages do go missing, searching electronic records will be more efficient and accurate, enabling faster resolution of anomalies.
In addition, knowing where deposits are, when to expect them (and when credits are passed for them) and details about each deposit/shipment will aid tremendously in managing workflows and cash positions.
The Federal Reserve Banks have acquired a license for a GS1 US-issued GS1 Company Prefix, which is the root identifier that will be used to create GLNs to identify all of its vaults. It is also the root identifier that will be used by the bag manufacturers to generate and print unique SSCCs on all of the Fed’s shipping packages. In addition, the Fed is beginning a multi-year effort to update its internal systems. Once completed, it will be able to scan packages and quickly account for every item coming into or going out of its operations.
As the Federal Reserve Banks get ready to implement the new systems, they will work with industry partners that adopt these standards as well. Eventually, they expect to be exchanging eManifests with all the armoured carriers that deliver or pick up cash packages at their docks.
The Federal Reserve Banks will also be working with their customers to help them start using SSCCs to identify the packages that are sent between the two parties. Like the Fed, this will entail acquiring a license for a GS1-issued GS1 company prefix to create GLNs, using SSCCs on cash packages and updating internal systems to reap the benefits of Cash Visibility.
Commenting on the initiative, Barbara Bennett, Vice President and Chief Strategist of the Federal Reserve’s Cash Product Office, said: ‘by signalling our plans to implement Cash Visibility as quickly as possible, we hope to encourage others to do likewise, so that the entire cash handling industry in the US can begin to realise the many benefits of a more streamlined, automated and technologically advanced supply chain’.