The following information will introduce bar code technology from the standpoint of a small manufacturer who must apply a Universal Product Code (U.P.C.) to individual consumer units in order to satisfy large merchandiser requirements. As you read, you will learn not only a process of implementing bar code, but more importantly, that bar code technology is accessible and economical for the small business.

A key component to any automatic data collection (ADC) system is the bar code label or tag that is applied to the units to be scanned. There are two levels of identification that can be used based on application and tracking requirements: primary and secondary. The U.P.C. number is an example of primary identification because it represents a product or item type, not a single physical entity. For example, each television set of the same model number would have an identical U.P.C. label. However for purposes of warranty registration and repair tracking, each unit would require another identification referred to as secondary identification.

Secondary numbers uniquely identify different physical units of an item. Examples of secondary identification include serial numbers, batch numbers, or lot numbers. These numbers are key to such applications as quality control, maintenance scheduling, and asset tracking. More about secondary identification later.

For a bar code system to function properly, every unit to be tracked must be labeled. In rare exceptions, an item is too small to be practically labeled. In this event, the item's storage location can be labeled, or a bar code "menu" card can be created and made available at scanning stations.

Of all the bar codes in use today, none is more familiar than the U.P.C. code that is printed on every grocery item. In 1972 the supermarket industry set out to adopt a symbology that would speed and simplify check-out. Industry associations that pioneered the use of bar code for consumer price look-up established the message structure for U.P.C. labels by creating a numbering system that would permit individual grocery producer identification and individual product identification within the message. A field of six digits was set on the left half of the bar code for producer identification; a field of five digits was set on the right half of the bar code for product identification.

The U.P.C. symbology is intended for use only in the structured environment of the retail industry. U.P.C. has now expanded to convenience stores and general merchandise retailing as well. The concept that all trading partners in a product's channel can use the same identification for the item is now widely accepted.

The Uniform Code Council (UCC) administers the assignment of all U.P.C. manufacturer identification numbers, thus preserving the uniqueness of each individual item. Furthermore, the U.P.C. number is totally compatible with the International Article Number, previously referred to as the European Article Number (EAN).

Must you always use a U.P.C. number for primary identification in a non-retail bar code system? The simple answer is "no." Internal identification numbers, such as catalog or part numbers, can be used when the product will only be scanned within the confines of one company. However, keep in mind that many existing parts or catalog numbers have special characters such as hyphens, asterisks, or spaces that were introduced at a time when manual recording methods were in place. These same special characters may cause problems for computer system processing of data.

Internal part numbers tend to grow in size to accommodate a special run of product, a marketing promotion, or a temporary modification in the manufacturing process. Extended numbers would be unwieldy to bar code. With an ADC system in place, essential product information can now be stored in a central database with the U.P.C. label acting as a key to this information.

Note: There is a distinction between the U.P.C. number and the U.P.C. symbology. A U.P.C. number is registered with the UCC. The U.P.C. symbology can be printed with virtually any bar code printing software. The term U.P.C. always refers to a valid U.P.C. number combination, not the symbology. Unless a manufacturer has registered with the Uniform Code Council (UCC), the U.P.C. symbology should not be used. Code 128 or Code 39 would be more appropriate for internal, primary identification. Both these symbologies have been used for many years and have proven to be reliable, easy to print and accurately scanned.

The steps for obtaining a U.P.C. number are straightforward. Notify the UCC, at the address listed below, that you wish to be assigned a manufacturer's ID number. There will be a cost of to the process of registration and manufacturer number assignment, but this is scaled to the size of the company.

The Uniform Code Council, Inc.
7887 Washington Village Drive, Suite 300
Dayton, OH 45459-8605
Phone: 937-435-3870
FAX: 937-435-7317
Web: www.uc-council.org

The UCC also offers many publications that are valuable when labeling with the U.P.C. These documents provide important guidelines on label sizing, placement, symbol color, and print quality. The number assigned by the UCC will always be the first six digits of a company's U.P.C. number. The remaining five digits, not counting the check digit, are assigned by the manufacturer. Several reasonable schemes can be used for assigning these numbers. Some examples follow:

• Assign numbers sequentially, linking the new U.P.C. number with existing part or catalog numbers.
• Imbed part or all of existing part numbers into the U.P.C. number while keeping the number's uniqueness.
• Develop a new numbering scheme where different product lines have blocks of numbers reserved for them. For example, all VCR models have a "3" as their first digit, all TVs have a "4," all stereos have a "5," etc.

There are two methods for producing a U.P.C. symbol on a package, off-site or in-house. Off-site printing techniques including flexography (using a bar code film master), silk-screening, and lithography. On-site bar code printing choices include laser, direct thermal, thermal transfer, dot matrix, or ink jet techniques. The choice between on- and off-site printing will depend on several factors:

• The package design - size, colors, graphics, and printing technique.
• The volume of labels needed.
• The degree of flexibility needed.
• The associated costs.
• The required level of corporate intervention, including lead-times, maintenance, stocking of consumables, etc.

Scanning the U.P.C. symbol on every product is beneficial in many ways for large retail chains and small, independent stores alike. The most obvious benefit is in the speed of checkout as delays at the register are eliminated. A second benefit is more accurate pricing. A lot of publicity has been given to "inaccurate scans" at the grocery store. The real problem does not lie with the scanner, rather with the price look up (PLU) database kept in the store's computer. Careful attention must be paid to updating the database whenever a price change occurs so that pricing on the item and at the register agree. Consumer confidence is quickly shaken if a discrepancy occurs, even when the error is in their favor.

PLU scanning is even more useful in stores selling a high volume of small items, or for items too small to be labeled individually and re-labeled for price changes. In hardware stores and hobby shops, for example, units shipped without individual U.P.C. numbers can be marked with small labels when received. Hardware stores contain many items which are kept in bins which are labeled with the item description and price. The item, which is scanned at the POS, contains a U.P.C. number, usually reduced by 20%, but within the UCC guidelines. If the item is too small to be labeled at all, a "menu book" is kept at the POS with a description or photograph of each of the small items and the U.P.C. bar code placed beside it. The clerk then scans the appropriate bar code.

A third important benefit is inventory control. Each time an item is scanned, the on-hand inventory count is automatically decremented. At the end of each business day, a report is generated listing all items which have fallen below the re-order level. At that time, an order can be placed manually, or automatically, via a FAX or Electronic Data Interchange (EDI). Performing a physical inventory on the thousands of SKUs, at a hardware store for example, can take hundreds of man-hours. It would be unrealistic to count every screw, washers, and widget. On the other hand, ordering when a bin is empty is unworkable in the competitive retail environment.

For several years, large retail chains have been promoting the value of timeliness through initiatives such as Just-in-Time (JIT) or Quick Response (QR). Empty shelves and inventory stacked in a distribution center mean lost revenue. Replenishment cycle time reduction is now considered a major competitive advantage for stores of all sizes. The key to JIT and QR is 100% accurate inventory counts. Bar code scanning is the most cost-effective method of reaching the goals of JIT and QR.

A scanning system as described above need not be complicated or expensive. A generic database running on a Macintosh or other personal computer can be set up to perform the price look-up and to decrement the inventory. Light pens, CCD scanners, even laser scanners can be attached to any computer with a simple cable hook-up. Scanners can now be purchased with integrated "wedge" devices which allow scanned input to emulate keyboard input, eliminating the need for changes to existing application software packages. In most applications, a light pen or wand, which is handled like a pencil, is all that is required.

The benefits of applying and scanning U.P.C. labels are well documented. Bar code is definitely not just for the "big guys." For a very economical investment, small businesses can assemble all the pieces in just a couple of weeks. The initial investment is quickly recouped. In part two of this article, Bar Code Applications for Small Business, we will explore other bar code uses as well as the speed, ease, and economy with which bar code systems can be implemented, even by non-technical business managers.



Copyright © 1994 Data Capture Institute Inc.

Proceed to Part 2 of Why Bar Code?