Bar Code Deadline Looming for Retailers

Aug 12, 2002

The New York Times reports that many retailers in the United States and Canada have yet to focus on the 2005 deadline for the 12-digit bar code conversion to 13 digits. The technological challenge will require significant investments in time and capital and has the potential to disrupt entire supply chains. The difficulty is similar to the Y2K problem, which concerned the potential mayhem posed by two-digit representation of years in computer systems at the turn of the new millennium.

“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,” says Thomas Friedman, president of Retail Systems Research Services. Mr. Friedman estimates that the upgrade will cost at least two million dollars 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.

Ace Hardware, which sells some 65,000 coded products, overhauled its computer systems to accept at least 14-digit bar codes in 1999 with the help of Teaneck, N.J.-based Cognizant Technology Solutions. “It was such a struggle to get manufacturers to relabel things for North America,” says John Poss, merchandising coordinator for Ace, “and we wanted the same system in place globally, so we decided to make the change.” The consultant-assisted project took almost two years to plan and carry out. Though Mr. Poss would not disclose the cost of the project, he says the gains in efficiency and in suppliers’ good will had been “well worth the expense.”

Moderator Comment: Are the concerns about the change in the UPC code raised by the NY Times article overblown? Will retailers be ready by January 1, 2005? [George
Anderson – Moderator

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