IBM to Help Retailers Meet Jan. 1, 2005 Deadline for Adopting New Global Bar Code Standard

Race to Update Decades-Old Software Applications to Comply as Deadline Nears

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ARMONK, NY - 16 Jul 2004: IBM Global Services is introducing new offerings designed to help retailers meet the fast-approaching deadline of Jan. 1, 2005 -- when new bar code standards take affect that are expected to save retailers and packaged goods makers billions of dollars in supply chain costs. The changes for North American retailers and worldwide consumer goods makers could make the term "UPC Code" as outdated as leisure suits, platform shoes and other icons from the 1970s, when the UPC code was introduced as a quick way to scan grocery items.

UPC codes debuted on June 26, 1974 when a pack of Wrigley's chewing gum was first scanned at a grocery story in Troy, Ohio. Since then, UPC codes have become ubiquitous on everything from consumer goods to health forms. IBM played a key role at the dawn of the UPC era, and now has business consultants teamed with software engineers to help North American retailers make the transition to the new global bar code format.

Two IBM employees played key roles in the development of the UPC code. In 1952, Joe Woodland was awarded a patent as co-inventor of the early concept. In 1971, George J. Laurer headed up IBM's development of the concept for the 12-digit Universal Product Code, or "UPC code" -- the 12-digit bar code that identifies and tracks products at the point of sale, primarily in retail stores, that was adopted in the U.S. and Canada.

However, retailers and packaged goods makers outside of North America adopted bar codes of different sizes. As a result, European products sold in the U.S. and Canada have routinely been re-labelled with 12-digit UPC codes for sale in North America. Eight years ago, the Uniform Code Council, the not-for-profit organization that manages bar code standards worldwide, signaled that industry would move to uniform bar codes. Called the 2005 Sunrise initiative, the Uniform Code Council will issue an umbrella of bar codes under the name Global Trade Item Number, or GTIN, after Jan. 1, 2005.

"Changes in the checkout registers, including IBM's point of sale systems, have been introduced over the past eight years," said Ray Tromba, director of retail application management systems for IBM Global Services. "But time is running out, and most companies have been slow to change their core business applications. As the January 1 deadline approaches, IBM is imploring retailers to identify and modify their software applications that process bar codes in order to accommodate the new global standard so they avoid disruptions in inventory, pricing and checkout systems."

Because numbers in the 12-digit bar code conveyed information about product maker and the individual items, retailers built their core business systems -- including prices and inventory -- based upon the familiar UPC code over the past three decades.

IBM's Legacy Transformation Services for Retailers are a broad suite of services that use consulting methods and specialized IBM software tools to help retailers update and modernize aging computer software programs, including reworking them for Web-based use. Converting old systems from UPC to the new GTIN is one way IBM Global Services works with retailers. At the same time, IBM's consultants can work with clients to identify their business goals and develop additional ways to transform their businesses.

An average of five billion bar codes -- found on things ranging from consumer goods to health forms -- are scanned every day around the world, according to the Uniform Code Council. Many of them are scanned on IBM point of sale systems, which are used by 30 percent of retailers in North America and 20 percent of retailers in other parts of the world.

Editor's note: Historic photos of IBM's early bar code scanning systems, dating back 30 years, are available at:

About IBM Global Services

IBM Global Services is the world's largest information technology services and consulting provider, generating record revenue and signings in 2003 of $42.6 billion and $55.5 billion, respectively. Some 180,000 professionals in more than 160 countries help clients integrate information technology with business value -- from the business transformation and industry expertise of IBM Business Consulting Services to hosting, infrastructure, technology design and training services. Leveraging IBM's unequalled scope and scale, IBM Global Services delivers integrated, flexible and resilient processes -- across companies and through business partners -- that enable clients to benefit from the on demand business model by saving money and transforming their businesses to be more competitive. For more information, visit


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