Bar code technology here to stay
UPCs, RFIDs unable to surpass product
Virtually every consumer product in the market has a bar code on it. The bar code is scanned at the check-out register and the store's computer system deducts one from the inventory record.
Ideally, that information feeds an inventory control system that not only keeps track of how many of the item are still on-hand, but might also re-order more when the remaining supply is just enough to last until the re-supply can be delivered from the distributor or manufacturer. In the best case, that individual sale information is also passed on to the factory so that they can plan production and distribution to keep the pipeline full for all the retail outlets.
Information sharing and coordinated planning are at the core of consumer product supply chain efficiency today. Bar code scanning technology has been around for decades and has not changed significantly in many years — ironically, it is this stability that made the UPC (universal product code) bar code so widely used and successful.
Most technologies have a relatively short life cycle, as they are replaced by newer and better techniques and tools. Bar codes have evolved somewhat. You may have noticed the square QR (quick response) codes that are showing up in print ads and to some extent on store shelves that will direct a smartphone app to the product's Web site. But even these new "two dimensional" bar codes are no threat to the ubiquitous UPC code.
Another technology that some thought might be the next big thing is the RFID (radio-frequency identification) tag. RFID tags improve on bar codes because they can passively identify themselves to fixed sensors (readers). The E-ZPass transponder is an example of RFID. If each product had an RFID tag attached, a consumer could simply wheel the shopping cart through the register aisle and all of the products would announce themselves to the cash register — instant check-out.
There are two reasons why this technology has not replaced the UPC bar code. The tags and the reader equipment are more expensive than printed bar codes.
Although the costs have been dropping as more uses are found for RFID, bar code will always be cheaper and more convenient, albeit more limited in what it can do. In addition, there has been some consumer resistance due to privacy concerns.
RFID is becoming more widely used in industrial settings — to label cases of products in the warehouse, for example, or attached to an automotive chassis as it moves down the production line.
There are some notable examples of RFID having a dramatic effect in the fashion industry (mostly in Europe, so far) where it is critical to have the latest hot product on the shelf and to have replenishments immediately available when items are sold. RFID tags enable tighter inventory control and precise tracking of where every skirt or top is at any moment in time.
Meanwhile, UPC bar codes are here to stay, even as RFID and other evolving technologies play a role in specialized areas of the supply chain.
Dave Turbide, CFPIM, CIRM, CSCP, CMfgE is president of the Granite State chapter of APICS, the leading professional association for supply chain and operations management. He is a Seacoast New Hampshire-based independent consultant, educator and freelance writer. Email him at email@example.com.