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Reply-To: khare@alumni.caltech.edu
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Subject: NYTimes.com Article: Bigger Bar Code Inches Up on Retailers
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Date: Mon, 12 Aug 2002 23:09:04 -0400 (EDT)

This article from NYTimes.com 
has been sent to you by khare@alumni.caltech.edu.


Let's see... a decimal digit is about 3.33 bits, so this is all about moving from a 36-bit to a 46-bit addressing system. Kind of makes the debate about IPv6 spaces quite real, as well as the Auto-ID center at MIT's proposal for a physical markup language. 

Actual barcode size may yet decline to the point that 2-D codes may yet make it an individual-item level of addressing.

Seeing software systems this fantastically brittle after fifty years is not, unfortunately, surprising. Are we sure we really know better yet? Are angle brackets really the key to immortality? :->

Interesting reinforcement of the Voyager piece I archived earlier today... 

RK

khare@alumni.caltech.edu


Bigger Bar Code Inches Up on Retailers

August 12, 2002
By KATE MURPHY 




 

In a little more than two years, retailers in the United
States and Canada will face a deadline that promises
technological challenges akin to the Year 2000 computer
problem. 

Starting Jan. 1, 2005, the 12-digit bar codes retailers use
to identify everything from cars to candy bars will go to
13 digits. The additional number (and associated bars and
spaces) is enough to make checkout scanners seize up and
make computers crash, perhaps disrupting entire supply
chains. 

But many retailers have yet to focus on a problem that will
require significant investments in time and capital. 

"Most retailers are public companies that tend to live
quarterly and not look ahead, which means they are going to
be hit over the head with this and have to scramble at the
last minute to avert disaster," said Thomas Friedman,
president of Retail Systems Research Services, a company in
Newton, Mass., that publishes a retail information
technology newsletter. 

Leading retailers say they have begun to address the issue.
A spokesman for Wal-Mart Stores, the world's largest
retailer, said the company had "embraced the concept" of an
expanded bar code, but he did not respond to questions
about actual measures taken to prepare computer databases
and logistical systems. Similarly, a spokesman for the
Target Corporation said his company was "intellectually
ready" for the change but refused to comment on whether any
of its stores or warehouses were technologically ready. 

But Richard A. Galanti, the chief financial officer of
Costco Wholesale, admitted, "The truth is, given the
timeline, everybody's still in the assessment phase, trying
to figure out what to do." 

The difficulty is similar to the one posed by the Year 2000
computer problem, when computer software had to be switched
from two-digit entries identifying years to four-digit
entries. Before Jan. 1, 2000, millions of lines of code had
to be rewritten to avoid widespread computer failures. 

Bar codes have been used in packaging since 1974, when the
first item, a pack of chewing gum, was scanned at a
supermarket in Ohio. The codes identify a product,
distinguishing between an eight-ounce can of Del Monte
creamed corn and a medium-size pair of Hanes boxer shorts.
When a bar code is scanned, the information in the store's
database lets the retailer assign a price and track sales
and inventory. 

"The bar code is the linchpin upon which everything in
retail depends," Mr. Friedman said. 

The reason for expanding the 12-digit bar code, known as
the Universal Product Code, is twofold. First, there is a
shortage of U.P.C. numbers. "There's only a certain amount
of 12-digit numbers, and we're going to run out," said John
Terwilliger, vice president of global markets at the
Universal Code Council, a nonprofit organization based in
Lawrenceville, N.J., that assigns codes in the United
States and Canada. Second, 13-digit bar codes are used
almost everywhere else in the world. The council's European
counterpart, EAN International, based in Brussels, assigns
these numbers, called European Article Numbers, to
companies in 99 nations. "Right now," Mr. Terwilliger said,
"foreign importers have to get a 12-digit U.P.C. to do
business over here, which they haven't been too happy
about." 

Foreign manufacturers currently pass on to consumers the
cost of getting an additional bar code and creating special
labels for products sold in the United States and Canada.
"It's an added expense for them, and they have to recoup it
somewhere," said Debra Shimkus, marketing manager at the
Chicago Importing Company, a specialty food importer whose
overseas suppliers are often incredulous when they are told
they have to get new bar codes for their products before
they can be sold in American groceries. 

Many foreign manufacturers decide that it is not worth the
trouble. "A lot of companies have been unwilling to accept
the additional burden," Mr. Terwilliger said, "and have
stayed out of the market entirely." 

American and Canadian exporters have not had the same
obstacle because foreign retailers can easily incorporate a
12-digit number into their 13-digit databases by making the
first digit zero. That is why American and Canadian
manufacturers of products that now have 12-digit codes will
not be affected by the code expansion. A two-liter bottle
of Coca-Cola, for example, will keep the same U.P.C., but a
zero will be added to the beginning of its bar-code number
in retailers' product databases. 

"The effect of the change in the U.P.C. code falls squarely
on retailers," said Mr. Friedman. He estimates that the
upgrade will cost at least $2 million for a chain of 100
stores with 10 checkout lanes a store. 

The expense will vary depending on the age of a retailer's
databases, software and hardware and whether it has to hire
outside consultants to make the change. Scanners and other
hardware bought more than three years ago will not read
longer codes and will have to be replaced. Software more
than five years old will also have to be scrapped. 

"Thank God we'd already planned to buy new equipment for a
lot of stores this year," said Richard S. Gilbert, director
of store systems at Duane Reade, a chain of 200 drugstores
in New York City. The stores have a total of 3,500 scanning
devices, each costing $1,000 to $2,500. As for the
cumbersome database modifications that need to be made, Mr.
Gilbert said: "Our consultants say they are working on it,
but they haven't gotten back to me with a plan. I still
don't know how big a deal it's all going to be." 

He might want to ask John Poss. Mr. Poss is the
merchandising coordinator for Ace Hardware, which has 5,100
stores and sells some 65,000 coded products. Ace overhauled
its computer systems to accept longer bar codes in 1999.
The company, based in Oak Brook, Ill., has retail outlets
in 70 countries and more than a hundred foreign suppliers. 

"It was such a struggle to get manufacturers to relabel
things for North America," Mr. Poss said, "and we wanted
the same system in place globally, so we decided to make
the change." 

The company hired a consultant, Cognizant Technology
Solutions, which is based in Teaneck, N.J., and is a
division of Dun & Bradstreet. Ace's in-house team worked on
the project during the day while a Cognizant office in
India took over at night. 

Even so, the project took almost two years to plan and
carry out. In addition to equipment upgrades, modifications
had to be made in more than 500 software programs in
various company divisions (50 in distribution alone). The
most tedious and time-consuming part of the conversion, Mr.
Poss said, was making adjustments to databases. "Every
database in every division touches bar code information,
and they all needed to be reworked," he said. "It's like
Y2K, where you had to go in and expand fields and find
every reference to the date." 

Though Mr. Poss would not disclose the cost of the project,
he said the gains in efficiency and in suppliers' good will
had been "well worth the expense." His advice to other
retailers is to "get busy because you're facing an extreme
challenge." 

But moving to 13 digits may not be enough. The Universal
Code Council and EAN International, which formed an
alliance in 1996, strongly advise manufacturers and
retailers to go a step further and prepare their systems to
accommodate a 14-digit code. That is the length of a newly
patented bar code that takes up less space. Its reduced
size means that it can be affixed to small items like loose
produce, and the extra digits let a retailer keep track of
additional data like batch and lot numbers. 

That additional information would make product recalls
easier. "Today," Mr. Terwilliger said, "once a product is
taken out of the shipping container in the warehouse, you
really can't track it anymore." 

Shipping container bar codes are already 14 digits. The
different bar-code standards mean that retailers need
different computer systems for shipping and receiving,
inventory and sales. By adopting a 14-digit standard,
retailers should be able to put all the information into a
single database. 

Mr. Poss said Ace had added the capacity to scan and store
14 digits when it made its conversion three years ago. "Now
we can scan anything," he said, "whether it's in the
warehouse or at the register, and it immediately goes in to
a centralized system. No more sending data between
divisions." 

The cost and work of making the transition to 14 digits, he
said, was the same as it would have been for a change to 13
digits. 

Representatives from the standards groups said adopting a
14-digit structure - a step for which no date has been set
- could help streamline the sharing of data among all parts
of a retail operation. It would also make it possible, they
said, to identify products anywhere in the world at any
time during the trade process. 

"And to think it all started with pack of gum," Mr. Poss
said. 

http://www.nytimes.com/2002/08/12/technology/12CODE.html?ex=1030208144&ei=1&en=1b5705e7bd2048e6



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