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Many of the technologies in use at supermarkets today owe their existence to an event that took place just over 30 years ago in Troy, Ohio. That was when Sharon Buchanan, a cashier at Marsh Supermarkets, slid a UPC-labeled 10-pack of Wrigley's Chewing Gum across an NCR scanner -- completing the first bar code scan in retail history.
The Uniform Code Council (UCC), the not-for-profit business standards organization, and Marsh Supermarkets celebrated the 30th anniversary of the UPC bar code June 25 at the same Marsh location where the first live scan was made. On hand were Marsh, UCC, and Wm. Wrigley Jr. Co. representatives, as well as Buchanan. "The point of us going back there was to thank the people -- the actual staff -- who were on the front lines of this whole movement 30 years ago," says UCC spokesman Jeff Oddo. "Many of these staff members are still with the store."
The Universal Product Code (UPC) was the outgrowth of meetings that took place in the late 1960s among leaders of the U.S. grocery industry who were searching for ways to reduce food costs and congestion at the checkout line. In 1974, after five years of development, the UPC debuted. Don Marsh, chairman and c.e.o. of Indianapolis-based Marsh, agreed to make the chain's Troy, Ohio store the site of the first UPC system.
"Marsh is a regional supermarket, and the size was conducive to run such an undertaking and an aggressive test for NCR with the UPC bar code scan," says Marsh v.p. of community relations and event management Jodi Marsh. "NCR is based in the Ohio area, and our first store in which we implemented it was in Troy, Ohio."
This was no easy task, according to UCC's Oddo. "It wasn't just that you scan a pack of Wrigley gum and high-five one another," he says. "There was a lot of work involved because none of the products were source-marked. It required the hand-application of UPC stickers every day and every night."
While this leap forward was expected to deliver great results, it also required a change in the way the grocery business was run, both on the customer side and within the Marsh organization. Naturally there was some resistance to change. "We knew that there was something good going on," says Buchanan, who left Marsh approximately 20 years ago to devote time to her children. "A lot of our customers had shopped with us for years, and they weren't too happy about not having price stickers on the products anymore. So our stock clerks put the price stickers on each item, in addition to the UPC labels."
As innovative as the technology was, no one imagined how big an impact the bar code and scanning would have. In 1974 the grocery industry estimated it would save $150 million with an automated system that employed the UPC. The actual benefits far exceeded this number. Indeed, a 1999 PriceWaterhouseCoopers study estimated that the bar code saves more than $17 billion annually in the domestic retail industry alone.
The UPC's benefits extended far beyond the checkout lane, however. It eliminated the need for manual pricing, resulting in lower-priced products. Checkouts became faster and more accurate, saving consumers time and money. The UPC also allowed retailers and manufacturers to manage and replenish inventory more efficiently, as well as automate many processes and operations, like special promotions, coupons, and product returns.
A big deal
Buchanan only now grasps the importance of it all. "At the time, we didn't realize we were the first in the world to do it," she says. "We figured we would be the first in the chain, since the scanner was created in Dayton and we are nearby. It wasn't until 30 years later that we realized what a big deal it was. I go into stores now and everyone is using them."
It's estimated that the UPC has saved shoppers, retailers, and manufacturers over a trillion dollars since its implementation, and it has become an essential part of everyday commerce and consumer life.
The expansion of the UPC has allowed the UCC to develop an entire family of bar codes to uniquely identify not only products, but also cartons, cases, pallets, assets, and even coupons. The organization estimates that these bar codes are scanned over 10 billion times a day worldwide.
Today the UPC is used in 23 major industries, including grocery, retail, health care, government, foodservice, industrial/commercial, transportation, and high technology. In 1977 EAN International, the UCC's global partner, began commercializing a 13-digit companion bar code to the UPC called EAN-13. The worldwide success of both symbologies became the foundation for the EAN.UCC System of bar code and electronic commerce standards, which is now used by more than 1 million companies to facilitate efficient commerce in 141 nations. EAN International and the UCC have announced plans to adopt the umbrella name of GS1 for their organizations, with a planned rollout in 2005.
The UPC's success has allowed the UCC to introduce new standards initiatives to benefit consumers and industry. Reduced Space Symbology (RSS), a smaller bar code "cousin" to the UPC, is now being used to mark small health care items such as vials, blister packs, and syringes. Earlier this year the U.S. Food and Drug Administration mandated that pharmaceutical companies bar-code their medicines down to the unit of dose so that they can be scanned in hospitals, and endorsed RSS as a means to reduce medication errors.
The UCC is also in the process of working with industry to standardize and commercialize its newest innovation, known as the Electronic Product Code (EPC). This "wireless" bar code will use low-power radio frequency tags and readers to automatically capture information like bar coding, but with even greater benefits to consumers, according to UCC c.o.o. Michael Di Yeso. "We strongly believe that once manufacturers, distributors, and retailers begin to adopt and use this technology in their businesses, its impact will eclipse the benefits achieved by the UPC bar code," he says.
As retailers head toward RFID at the item level, what lesson can they take away from observing the past 30 years of bar code history? "I think one of the most important things this has taught us is the importance of building a strong infrastructure," says Tom Brady, UCC's v.p. of automatic ID data capture, who was with NCR during the bar code launch and was the architect of the Marsh system design.
"We learned this the hard way on the first day, when -- believe it or not -- the whole system went out because we didn't have a universal backup. That was a small, relatively simple system we had in place. Today grocers have huge systems in place, using thousands of applications. These all need to be capable of handling the massive amounts of data RFID will generate, and they must be up and available all the time."
In addition, Brady stresses the importance of vendor involvement, especially as systems become much more complex. His aim -- as well as that of the UCC -- is "helping to keep the industry moving forward in a consistent direction, with continuous improvements along the way."
While former Marsh cashier Buchanan isn't familiar with RFID, after seeing a presentation on how far the industry has come technology-wise, she has a positive outlook on the future of retail technology. "It has to keep going further," she says. "New equipment, new technology -- you have to stay innovative to survive."