Bar Codes: Y2K Redux?

By Kevin Fogarty  |  Posted 2004-08-02

Bar Codes: Y2K Redux?

Best Buy will have spent 25,000 hours of staff and consultant time by October just so its systems can read one more digit in each bar code on the packages of electronics products that its cashiers run through their checkout aisles.

That extra digit-part of an international tug-of-war over bar-code standards-was mandated last month after the European 13-digit format was selected as the global standard by Europeans and the Uniform Code Council (UCC) in the U.S. Retailers in this country were accustomed to using a 12-digit format.

Now the UCC, which hands out and oversees bar-code identifiers in the U.S., is expanding the length of the bar codes themselves. Deadline: January 2005.

This is forcing companies to do Year 2000-like remediation on their existing systems. The Y2K issue was also a "field length" problem. In that case, many fields had to be updated from two digits ("04") to four ("2004"). Replacing a 12-digit bar code with a 13-digit code is the same issue.

"Its a pretty intense task," says Rejesh Kannan, a project manager at Best Buy, adding that the electronics retailer had to inventory and fix its applications. "Homegrown applications are very tough to do. Off-the-shelf software is easier to replace."

The changeover wasnt a surprise. The UCC has been promoting the merger between its 12-digit Universal Product Code (UPC) and the 13-digit European Article Number (EAN) for the last seven years. As a result, in January all U.S. retailers must be able to read the longer codes, which Europe adopted in 1977. The extra digit helps identify the country of origin for a product.

Retail and grocery trade groups say theyve prepared for the change. UCC spokespeople say a survey it conducted last year shows there will be "no significant non-compliance in any retail sector" by January. The UCC has not released specific numbers, however, and declines to say how many respondents were compliant before the survey and how many are still getting ready.

But there is little talk of an apocalypse. Most scanners and point-of-sale devices can already handle 13-digit codes; the bulk of the change will come from updates to the back-end applications and databases that process product data.

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Next Page: A few stragglers, like Best Buy.

Bar Codes: Y2K Redux? - Page 2

There will be a few stragglers. For instance, Best Buy didnt start its changeover until late last year. The electronics retailer is targeting October as the deadline for its project, according to Kannan.

Best Buy hired Indias Tata Consulting to scan its code for keywords like "UPC" to identify fields that should be expanded. It used programmers in both the U.S. and India to expand those fields to 14 digits so it could be ready for future bar-code expansions. But the company did not touch internal applications that could handle 13 digits or were relatively unaffected by product codes.

The vast majority of that time was spent scanning all of the companys business applications, though most problems showed up in software using electronic data interchange or other protocols that exchange data with suppliers. Commercial software was easier to handle because the company could install new versions rather than fix the actual code, as it had to do with homegrown applications, Kannan says.

When Kannans team found a commercial or homegrown application that could handle 13 digits, they left it alone, even if that meant coming back another time to expand to 14 digits. The project mandate was limited, and the company plans to retire many applications to limit the expense of the makeover, he adds.

Other companies are either finished with their bar-code remediation or close to finished, according to Dave Hogan, chief information officer of the National Retail Federation.

"The NRF has a CIO council of 40 to 45 of the best and brightest companies in I.T- Saks, Sears, Radio Shack," Hogan says. "Within that group, its a non-issue. So we think that if it is an issue, its only for a relative subset. It may have been an issue, but its not one now."

The biggest reason retailers may be ahead of the game is that they already sell European products with the extended bar codes, says Mark Rausch, manager of store systems for Wegmans Food Markets, a 66-store grocery chain based in Rochester, N.Y.

Next Page: Warming up to the 14-digit bar code that may help unify the global supply chain.

Bar Codes: Y2K Redux? - Page 3

If anything, this drill is a warm-up for a move to a 14-digit bar code pushed by the UCC. These codes, called Global Trade Item Numbers (GTINs), are designed to help unify a global supply chain, according to Pam Stegeman, vice president of supply chain technology at the Grocery Manufacturers of America.

GTINs contain enough information to identify products and manufacturers for 100 times as many products as the 12-digit UPC, making a unified global tagging system much more practical.

A 14th digit also means many companies can use the same codes for dealing with outsiders that they now use internally. Many companies already have more detailed codes in their own databases, and must map the shorter codes to them. They may use extra digits to express such factors as size of shipment-whether its a pallet, case or box, for instance.

Best Buy is holding off for now on using the global item numbers. But it is expanding its fields to 14 digits, for when such numbers are widely used.

But some companies dont see the need for 14-digit bar codes yet. The UCC is already pushing a different mini-code in a format called Reduced Space Symbology (RSS) that also uses 14 digits. RSS tags, which are about a quarter the size of an average bar code, are designed for items as small as a ring or a single cherry, but many retailers are resisting the expense involved in an upgrade.

These companies are instead waiting for those codes to be merged into the specifications for radio frequency identification (RFID) tags. RFID is maturing rapidly, but many companies do not consider it reliable enough for adoption. The technology is considered the next big thing in product tagging, however, and is being promoted by several major businesses, including the worlds largest retailer, Wal-Mart Stores.

How You Can

Figure out if your scanners and point-of-sale systems can handle 13 digits; most can.

Look for keywords in code like "UPC"; calculate how many fields cant handle 13 digits.

Put in 14 digits for the same price as 13, so you wont have to fix things again later.

Dont lose track of inventory, cash or sales once you go live.

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