July 8, 1999
Web posted at: 3:47 p.m. EDT (1947 GMT)

by Leslie Goff

(IDG) -- In a Kroger's supermarket just outside Cincinnati in early 1970, where the parking lot was full of gas guzzlers and consumer favorites like Apollo Space Treats and Gleem toothpaste lined the shelves, a conveyor belt in the checkout lane moved the American public into a new era. It was there, in Kenwood, Ohio, that a pivotal test of supermarket scanning took place.

Two years earlier, Cincinnati-based The Kroger Co. and RCA Corp. had started jointly developing a coding system to identify products in a store by category and price. The product codes were represented symbolically by a bull's-eye, which could be read electronically by a prototype scanner. In the 1970 test, Kroger's employees put bull's-eye codes on every product. When customers checked out, they heard the scanner's beep instead of the usual "cha-ching" of the cash register. The test would precipitate the launch of an industry effort to develop a Universal Product Code.

"We did it to prove it could be done," says Robert Aders, who in 1970 became CEO of Kroger. "We were looking at how banks were beginning to scan transactions, and the idea had evolved to do this in supermarkets."

But just because Kroger's proved it could be done didn't make it a sure thing.

There were simply too many stores, products and food companies to permit the random development of symbols and scanners for each supermarket chain. The key trade associations -- the Supermarket Institute, the National Association of Food Chains and the Grocery Manufacturers of America (GMA) -- had already been pushing for the development of a universal technology. Now they began pushing in earnest. The survival of the modern supermarket depended on it.

"By the late '60s, you had to start finding ways to save money... because of competition," Aders says. "CEOs were starting to look at productivity measurements very closely."

The manufacturers had an incentive, too, notes Stephen Brown, general counsel for the Uniform Code Council in Lawrenceville, N.J., and author of a book on the development of the bar code, Revolution at the Check-out Counter (1997, Harvard University Press).

If each supermarket chain devised its own coding scheme, food manufacturers would be forced to choose between two equally disagreeable options: Develop special packaging, with store-specific labels, for each of their products or crowd each product package with numerous codes and symbols for all customers, says Brown, who was a GMA lawyer in 1970.

So in August 1970, several months after the Kroger's test, a legendary meeting took place. The presidents of the three grocer's associations summoned 10 CEOs -- five representing supermarket chains and five from food companies -- and issued an edict: "Either find a common code and a symbolic representation of it, or tell us you can't do it and we'll stop wasting our time on it," Brown recalls.

"That was very innovative," Aders says of the meeting. Historically, the grocery manufacturers and the supermarket chains were frequently at odds, he says.

But the approach worked. Within two weeks, the group -- which was dubbed the Ad Hoc Committee on a Uniform Grocery Product Code -- chose the management consulting firm McKinsey & Co. to lead the project. Committees were formed to come up with the coding system and symbol and to encourage high-tech firms to develop the scanners.

The bar code was chosen as the symbol. It was submitted by IBM and developed by George Laurer, whose work was an outgrowth of an idea patented by another IBM employee, Joe Woodland, in the 1940s.

When the Ad Hoc Committee released its specifications, NCR Corp. was the first to rise to the challenge and develop a product. On June 26, 1974, Marsh Supermarkets Inc. used an NCR scanner to "ring up" a 10-pack of Wrigley's Juicy Fruit gum in a store in Troy, Ohio -- marking the first in-store use of a bar-code scanning system.

Even then, Brown says, the future that the bar code would ultimately enable -- such as just-in-time inventory management and the ability to target customers by their brand preferences -- was still unclear. Few people envisioned its application outside of the grocery industry, he says.

"I don't think we knew fully what we had in our hands," Aders agrees.

Goff is a frequent contributor to Computerworld. Contact her at lgoff@ix.netcom.com.