Bar code expansion poses threat to retailers’ IT systems

No one is billing it as Y2K II, but upcoming changes to the universal product code should not be taken lightly, retail experts warn.

The 12-digit bar code used to identify products is getting a facelift of sorts. On Jan. 1, 2005 the universal product code (UPC) will go to 13 digits. While

there is some concern the point-of-sale (POS) scanners and software won’t be able to handle the extra digit (or the bars and spaces), this should be the least of a retailer’s or distributor’s worries.

“”Their back-end systems are going to have to change as well,”” says J.C. Williams Group analyst Rena Granofsky, based in Toronto.

Grant Schwartz, vice-president of information technology for Mississauga, Ont.-based Katz Pharmacy Services Inc., agrees. He says his company has had the issue on the radar for about six months and has already begun preparations.

“”We have modified our master files, so at least we’ve got those changes in place where we’ve got room for the actual data,”” says Schwartz, adding it is actually preparing the system to accept 14-digit codes. “”There’s a bunch of internal systems that use UPC. That’s going to take a lot more time and effort. We’re just in the process of identifying those now, with plans to sometime over the course of the next 12 months make all those changes.””

Despite the number of touch points and time needed to complete the project, Schwartz says it’s nothing like the period leading up to Y2K, where fears mounted that IT equipment would not be able to process “”00″” when date and time systems changed over from 1999 to 2000. The primary difference, he says, is that the problem areas are easily identified and tested. Not that the job won’t present challenges.

“”We run a couple different databases. DB2 itself wasn’t all that difficult in just changing the field definition. It’s files that are part of a third-party application that we don’t have the source code for, so you’ve got to go back and talk to the individual suppliers of that software,”” he says.

“”Then we have some PC-based systems that aren’t as easily changed. So in those cases you can’t just expand the database. You’ve got to redefine (it).””

Some companies, however, say they won’t have any trouble at all. Best Buy Canada Ltd., for example, is already compliant, according to spokeswoman Lori Decou. She says the company, which also owns Future Shop, sources so many products from around the world it has been compliant with the European Article Numbers (EAN), which is already 13 numbers, for some time.

Granofsky says Best Buy is probably in the minority. While larger companies are aware the change is coming, she says mid- and small-size retailers have paid no attention to the issue yet.

Al Garton, the director of general merchandise at the Universal Code Council, the group responsible for the change, warns that just because a company handles goods from outside North America, that does not automatically mean it is 13-digit compliant.

But as the deadline approaches, scanner vendors aren’t expecting an avalanche of clients looking to upgrade.

“”I think there’s going to be a big need to upgrade the software underneath it,”” says Ian Bowden, president Edmonton-based Aurora Bar Code Technologies Ltd. “”As a general rule of thumb, if a bar code reader will read UPC, it will read EAN.””

But exactly how old is too old remains a question. NCR Canada Ltd. president Brian Sullivan says the best way to find out is to ask the manufacturer. He says NCR has made 13-digit compliant scanners since 1998 and clients won’t rush to upgrade.

“”There will always be work-arounds. Whether it be keying in a price or reading a portion of the label or coming up with a software resolution to it,”” Sullivan says.

Garton says retailers’ IT infrastructure won’t collapse come Jan. 1 2005 if they are not ready, but their business might. He says the danger is the havoc caused by lost digits and unpredictable events in the supply chain.

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