The history of barcodes: A lesson in digitalistion

Posted on 6 Feb 2019 by The Manufacturer

What do chewing gum, lasers, and lines in the sand have in common? They are all a part of the story of the barcode, the 44-year-old technology that changed the modern economy.

Robert Glass examines the many parallels between how the barcode changed the world and how digitalisation is doing the same today – using the digital revolution to open up new opportunities and improving productivity.

In the United States, at 8:01, on 26 June 1974, in a grocery store in Troy, Ohio, something happened that changed the world economy forever.

That morning, a 10-pack of Wrigley’s Juicy Fruit gum became the first item with a barcode to be scanned for a commercial sale.

That action was the culmination of years of development and diplomacy between retailers and manufacturers to agree on the industry standard for the Universal Product Code (UPC).

What had started out as graduate student Norman Joseph Woodland idly drawing lines in the sand while pondering the question of how to automate retail transactions, ultimately combined with improvements in laser technology to produce a barcode scanner.

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Retail revolution

Using barcodes, checkout times became faster, improving customer experience and the efficiency of the store. Moving the price from each item to the shelf enabled retailers to respond and offer sales prices much easier, without the timely re-pricing of each individual product.

Barcodes reduced inventory times and retailers were able to more frequently track the quantity of items ordered and sold, and those still on the shelf by using a centralised computer.

The ability to connect a customer’s purchases with a specific customer and track this information led to the development of loyalty cards and other schemes, and delivered a trove of valuable marketing information.

The time and efficiency savings barcodes unlocked for retailers enabled them to begin to expand and diversify their offering into clothing, garden products and even electronics.

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There is no doubt barcodes enabled growth and improved productivity. Yet the adoption of the barcode, from invention to its complete integration, was a slow process.

Retailers didn’t want to install barcode readers until manufacturers had put barcodes on products, and manufacturers didn’t want to put barcodes on products until retailers had installed scanners.

It took decisiveness among manufacturers to embrace the technology and usher in the benefits that flowed from it for everyone.

The new barcode

Today, we’re going through a similar revolution with digitalisation. There are many parallels we can draw between what barcodes did in the 1970s and what digitalisation technologies are doing for modern food manufacturing businesses.

Technology has advanced to the point where incorporating connectivity-enabled devices into the process lines, the machines in those lines, and even the products inside the machines is becoming standard.

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This connectivity is the gateway to the Industrial Internet of Things (IIoT), or Industry 4.0, or just digitalisation. In addition, sensor technology has grown together with connectivity, opening up sources of new process and machine data that can help manufacturers improve their productivity in ways that were not economically possible before.

Despite these advances, many manufacturers are still reluctant to lead the way in technological adoption. Much like the chicken and egg-like dichotomy that hindered barcodes in the late 1970s, it is important that manufacturers avoid a potential stalemate and take the all-important first steps.

Embrace change

In a survey of ABB customers, we found that 90% of manufacturers expect digitalisation to increase their competitiveness and 60% believe that digital technologies are going to be the source of bottom-line impact on their business.

Yet, 70% also believe their company is not yet well prepared and 80% said that various factors, including not having the right talent, not having the right IT infrastructure and not having established performance management were all responsible for their lack of readiness.

These beliefs do not necessarily mean that manufacturers cannot make the most of existing technology to realise the benefits offered by digitalisation now.

In the same way that it took years of diplomacy between producers and retailers to agree on the number of digits to use in the UPC, manufacturers are looking at what is possible now, and what would be possible with targeted investments in the future.

Starting a digital journey

Just as the success of the barcode relied on incremental improvements, manufacturers today don’t need to overhaul their systems to gain the benefits of digitalisation. Small additions can make all the difference.

A smart sensor on a motor or a pump can be used to create digital twins, PLC modules can add 5G wireless connectivity, and internet-connected robots can be remotely controlled and virtually commissioned.

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A quick plant assessment is a great way to start building a roadmap of these kinds of iterative upgrades, helping plant managers to plan out their digital journey for the next few years.

The barcode has proven to be a transformational piece of modern productivity that is used commonly around the world. People now expect to see barcodes on products, and the way we work in retail revolves around that code being in place.

There is a lot that the history of barcodes can teach the food and beverage industry. By learning from these lessons, we can build a more successful future for digitalisation.

Robert Glass Global Food & Beverage Communications Manager ABB