Bar Code Labor Productivity

The Unexpected Impact of the First Bar Code

by Elaine Schwartz    •    Apr 3, 2014    •    398 Views

A 10-pack of Wrigley’s Juicy Fruit gum was the first item ever to have a barcode checkout. The year was 1974 and the place, a Marsh Supermarket in Troy, Ohio.

While for decades, people had been trying to figure out a product identification system, the real story appears to have begun on a Miami, Florida beach. Legend (and a NY Times obituary) say that in 1948, Joseph Woodland, a scientist who had worked on the Manhattan Project, was looking at the sand, pondering the problem. After drawing several concentric circles, he decided a bullseye might provide the solution.

Fast forward to 1973 and George Laurer at IBM. Convinced that the checkout process could be faster, a group of supermarket executives asked 14 firms to come up with way to convert a symbol to a number that would enable a computer to identify a product. An IBM scientist, George Laurer wound up figuring out the Universal Product Code system (UPC).

Think of what he had to combine. He had to formulate a barcode that took up a tiny amount of package space and could be scanned from any direction. Functioning as far as a foot or more away from the product, the scanner then had to communicate its identity to a computer that would do the rest.

The potential was mind boggling. Not only could the system speed up the checkout lines but also it generated an ongoing record of sales. That meant they could control inventory more efficiently, monitor promotions, and even time how fast an employee moved the checkout line. In addition, because every item no longer needed a sticker, prices could easily change and individual customers with “loyalty cards” could even be tracked.

It took several years for the technology to spread. Manufacturers labeled their packaging. Improved scanners became better at transmitting a smeared code. They figured out how to include produce and meat and cheese.

Although by 1980 more than 90% of all grocery products had a barcode, productivity increases were small at first. The technology was expensive and the training diverted managers from other things they had to do. However, once it all started to gel, the impact was big. One researcher estimated that for every barcoded product, the store saved $28 a year.

George Laurer said he never imagined that his Universal Product Code would lead to cell phone scanners and automated Post Office mail sorters. We should add that the UPC created a substantial increase in labor productivity.

Sources and Resources: Always great listening during my walks, the 99 Percent Invisible podcast on barcodes said it all. Then though, I did go to the academic research, watched George Lauer (do see the above youtube for a firsthand description) and went to the idhistory site for more details.








« »