The ‘This Week in Business History’ Series on Supply Chain Now shares some of the most relevant business and global supply chain events from years past. It will shine a light on some of the most significant leaders, companies, innovations, and even lessons learned from our collective business history.

 

In this episode of ‘This Week in Business History,’ Supply Chain Now Host Scott Luton relates true stories marking notable anniversary dates this week, including:

  • June 26, 1974: At the Marsh supermarket in Troy, OH, the Universal Product Code (or UPC) barcode system was first used to a 10 pack of Wrigley’s Juicyfruit gum.
  • June 28, 1902: The First Spooner Act was passed by the U.S. Congress (also known as the Panama Canal Act), providing the authorization required to build the Panama Canal to connect the Atlantic and Pacific oceans.
  • Notable business history birthdays: Konrad Zuse and Alan Turing

Intro – Amanda Luton (00:07):

It’s time for supply chain. Now broadcasting live from the supply chain capital of the country. Atlanta, Georgia heard around the world supply chain. Now spotlights the best in all things, supply chain, the people, the technologies, the best practices and the critical issues of the day. And now here are your hosts.

Scott Luton (00:33):

Hey, good morning, Scott Luton here with you on supply chain. Now, welcome to today’s show on today’s show. We’re continuing a new series this week in business history. So, you know, on this program, we’re going to be taking a look back at the upcoming week and then sharing some of the most relevant events from years past, of course, mostly business focused with a dab of global supply chain. And occasionally we might just throw in a good story outside of our primary realm. So invite you to join me on this. Look back in history to identify some of the most significant leaders, companies innovations, and perhaps lessons learned in our collective business journey. So now this week in business history for the week of June 22nd, let’s start with our featured story on June 26, 1974, and item with a UPC barcode was scanned at a retail location for the very first time growing up in high school, I worked at the local Winn-Dixie grocery store in my hometown.

Scott Luton (01:39):

My grandfather had worked there. My father had worked there and you could call it a bit of a tradition, bagging groceries, stocking shelves. That was the order of the day. And I got to confess, I had very little awareness and appreciation of one of the key technologies that enabled us to make it through those long days on Sunday, especially just after church, when the buggies were overflowing with hundreds of items to be scanned and bagged. So what does UPC stand for? You ask the universal product code. You can find it on just about every item in your house, certainly every item in your average supermarket these days, except some produce perhaps, but even the cantaloupes and the avocados and the Vidalia onions are found with ups UPC on them these days. But before we discuss the universal product code, let’s go a little further back and understand one of its attempted predecessors.

Scott Luton (02:42):

In 1952, a patent was issued to Joe Woodland and Bernard silver for a bulls eye shaped barcode. Both were students at the Drexel Institute of technology, which is now Drexel university in Philadelphia. And a local grocery manager had approached a Dean at the school at the time and, and begged for help and making store operations much more efficient and streamlined, especially speeding up the checkout process. I can certainly empathize with that grocery manager. You might can to think back the supermarkets years ago, before we even basic technology, paper, price tags, when every item which slowed down your stocking and had to be manually adjusted for any sale. And on Sunday afternoons, when the buggy was 652 items came to the checkout lane, each paper price tag had to be read and typed into the cash register. No errors, please. We’re going to check the tape, but back to Woodland and silver.

Scott Luton (03:49):

So they had developed a bull’s eye barcode and got it to be successfully read by a 500 watt bulb and then a CILA scope. However, for practical, widespread adoption, the inventors were really missing the technology to process the data. They had no micro computer system at the time. Of course, the 500 watt bulb was also deemed to be not quite bright enough for reliable field usage in the next couple of decades that would, of course, would be addressed the laser, which is actually an acronym that stands for light amplification by stimulated emission of radiation. Well, that would be invented by Theodore Maiman a research scientist at Hughes aircraft company. Of course a computer revolution was already in progress. A retail applications were right around the corner. So now let’s fast forward to 1966 radio corporation of America, better known as RCA responded to a Kroger ad or the large grocer was looking for ways to optimize operations.

Scott Luton (05:02):

And of course, speed up the checkout process. RCA did its homework came across Woodland and Silver’s patent and engaged with the two inventors and a few of the companies, of course, all to figure out an integrated solution to offer Kroger. The collaboration was successful to some extent, at least. And in 1967 at a Kroger store in Cincinnati, the system was installed and it passed with flying colors. But one big chore still remained with the local stores employees. They had to fix the bullseye barcode on every item, very time consuming Manji. And if it wrinkled, it might not scan as this innovative experiment was taking place. Other change in the retail and grocery industry was happening in 1966, the national association of food chains. Again, looking for solutions to speed up the checkout line in 1969, the group began to call for change and they were looking for a universal system, not varying practices and systems on a per store or per chain basis.

Scott Luton (06:13):

Now they were looking for something bigger in 1973, the predecessor to the uniform product code council was formed and an ad hoc council from the group would put together an RFP, a request for proposal to get companies, to submit proposals on a, to be designed universal product code. Part of the nonnegotiables. The barcode had to be readable from any direction. It must be able to be read quickly, Hey, you know, those checkout lines can’t be slow. That’s what we’re after. Right? And it had to be accurate specifically less than one in 20,000 undetected errors. This council would ultimately choose a UPC barcode proposal from IBM. That’s right, big blue over competitor, such as RCA and national cash register.

Scott Luton (07:09):

The IBM team behind the winning proposal was led by George, Laura, but in an interesting twist. And there’s always interesting twists. It also included significant contributions from one Norman Joseph Woodland. That’s right. Joe Woodland from Drexel who had received a patent back in 1952 was now at IBM and in the right place at the right time to help IBM transform not only its business, but the retail industry. In fact, IBM leadership really seemed to push George Lauer to use Woodlands initial bullseye approach. You know, the one that RCA initially bought into Laura would go on to say that IBM quote wanted me to write something up that said the RCA proposal was the greatest thing since sex, but my Nadir, but my nature and my training would not allow me to support something I didn’t believe in. I simply went against my manager’s instruction and set out to design a better system in quote words to live by.

Scott Luton (08:20):

And that’s just what Laura and his team did, including Joe Woodland. Now there’s a ton of math, certainly above my pay grade that went into the successful design of IBM’s UPC code. There are a variety of UPC formats, but most commonly used format is UPC UPCA is basically a bunch of bars and spaces that encode a 12 digit number. Okay. So now that we had our barcode system selected, what do we do next? Well, they put that new technology to work directly on June 26, 1974 at a Marsh supermarket in Troy Ohio. The first product with IBM’s barcode system was scanned note NCR, which was based in Dayton, Ohio at the time would design and provide the checkout counter, which piece P S C inc, which is now part of Datalogic would provide the scanner itself. The whole system ran about $10,000 in 1974 rest assured they’re a lot less expensive these days, that first product that would go down in history to be scanned with the new UPC barcode that would transform industry.

Scott Luton (09:40):

What would, what was the item you asked that would be a 10 pack of Wrigley’s juicy fruit gum, even though the first test was successful, the newly minted universal product code commonly referred to these days as a barcode wasn’t widely embraced until bigger retailers adopted the technology. Kmart was an early adopter for one and helped proliferate the UPC barcode out through industry. In fact, it’s spread across grocery in all through retail in the 1980s, by 1984, over four, over 30% of all grocery stores in the U S were equipped with barcode scanners. And of course they’re ubiquitous. These days are found in every store, but it’s important to note a couple of things. UPC, barcode numbers are not simply a random string of numbers chosen by the manufacturer or producer of the goods, but rather it’s a very specific string of numbers that follow a global standard regulated by third parties.

Scott Luton (10:46):

Remember the uniform product code council that was critical to the proposal, the selection, and then the adoption process. Well, that is now G S one us, which is the third party standardization organization for barcode usage in the United States. One other item that is so beneficial to help barcode work nowadays, the supplier of the goods take care of a fixing the barcode. It’s usually part of the packaging. The stores don’t have to worry about applying price, tags, or barcodes to products. Now, of course it didn’t happen overnight. It never does. And you still have some exceptions as always. We’ve probably all been in convenient stores, for example, that may not use barcode readers, different strokes for different folks. I like to say, regardless from a system standpoint, that UPC barcodes impact is far greater than what was initially thought to be. Remember they were after simply speeding up the checkout.

Scott Luton (11:54):

I like how Gavin Whiteman puts it in his 2015 book, your Rica, how invention happens. He says quote though, the inspiration for the barcode was the plea by supermarkets for technology that would speed up the checkout. It’s greatest value to business and industry is that it has provided hard statistical evidence for what sells and what does not. It has transformed market research, providing a rich picture of people’s tastes and it has made production lines more efficient. The once dreaded death rate laser beam now comes in handy gun size scanners that instantly read and log anything from hospital drugs to newborn babies in quote we’ll put mr. Whiteman.

Scott Luton (12:49):

Okay. So let’s now take a look in a bit more succinct way on some of the other notable historical items on this week in business history on June 28th, 1902, the first Spooner act was passed by us Congress also known as the Panama canal act. It authorized president Theodore Roosevelt and the United States to purchase land in Panama for the express purpose of constructing a canal to connect the Atlantic and Pacific oceans, Nicaragua was also considered, but the biggest advantage to selecting Panama was the ability of the project to use and take advantage of the previous French canal efforts in the country. But the construction of the canal was still incredibly dangerous. Over 5,600 workers lost their lives to due to disease and accidents. 51 miles long. The Panama canal was opened in 1914, transforming global transportation. And it certainly continues to serve as a critical component in global trade.

Scott Luton (13:57):

Today in 1999, the canals ownership was turned back over to Panama on June 22nd, 1910, Conrad Zeus was born Conrad Zeus, a German civil engineer, computer scientist, and businessman Zeus was most known for inventing the first working programmable fully automatic digital computer known as the Z three, which was completed in 1941. Not quite as robust as our modern devices. It’s average calculation speed for the addition function was 0.8 seconds for multiplication. It was three seconds it’s program code was stored on punched film. It weighed more than a ton, but nevertheless, it moved the industry forward on June 23rd, 1912, Alan Turing was born an English mathematician, computer scientist, Crip analyst, and much more touring was instrumental in allied war efforts in world war II, where it’s code breaking feats were legendary and highly impactful. In fact, some experts have claimed that Turing’s work shorten the war in Europe. By more than two years, he had many significant contributions to the computing world after the war, including developing the automatic computing engine and developing what is still referred to today as the touring test a standard for measuring machine intelligence, sadly, Alan Turing was also badly mistreated and castigated for his homosexuality.

Scott Luton (15:42):

He took his own life at age 41 in 2009, 55 years after Turing’s death, the British government via prime minister, Gordon Brown officially apologized for his mistreatment

Scott Luton (15:57):

On June 28, 1969. The Stonewall riots took place at the Stonewall Inn located in the Greenwich village neighborhood of Manhattan. New York. The riots were in response to an early morning police raid at the Stonewall Inn, largely frustrated by the constant police Harris Smith and social discrimination, patrons and area residents fought back riding for the next five days important to the gay rights movement and really the business world in general. It was a galvanizing moment and led to the formation of numerous gay rights organizations. And a year later in the same area, the first gay pride parade took place in 1970. The Stonewall riots legacy also includes June being recognized as LGBT pride month, each year here in the U S and around the world. We celebrate those pioneers and trailblazers that have helped business leaders truly offer opportunity for all and discrimination towards none, but we still have a ton of work to do. It’s certainly a journey with no fee with no finish line.

Scott Luton (17:06):

Okay.

Scott Luton (17:07):

That wraps up our look at the week ahead from a business history standpoint, those are some of the stories that stood out to us, but what do you think? What stands out to you? Tell us, you can shoot us a note to Amanda at supply chain. Now radio.com or join our supply chain. Now insider’s group on LinkedIn and share your feedback and perspective. We’re here to listen. Hope you’ve enjoyed the second edition of this week in business history. On that note, be sure to check out a wide variety of industry thought leadership at supply chain. Now radio.com find us and subscribe wherever you get your podcasts from on behalf of entire team here at supply

Scott Luton (17:50):

Chain. Now this is Scott Luton wishing all of our listeners, nothing but the best do good give forward and be the change that’s needed on that note. We’ll see you next time on supply chain now. Thanks your buddy.

Would you rather watch the show in action?  Watch as Scott  through our YouTube channel.

Scott W. Luton is the founder & CEO of Supply Chain Now. He has worked extensively in the end-to-end Supply Chain industry for more than 15 years, appearing in publications such as The Wall Street Journal, Dice and Quality Progress Magazine. Scott was named a 2019 Pro to Know in Supply Chain by Supply & Demand Executive and a 2019 “Top 15 Supply Chain & Logistics Experts to Follow” by RateLinx. He founded the 2019 Atlanta Supply Chain Awards and also served on the 2018 Georgia Logistics Summit Executive Committee. He is a certified Lean Six Sigma Green Belt and holds the APICS Certified Supply Chain Professional (CSCP) credential. A Veteran of the United States Air Force, Scott volunteers on the Business Pillar for VETLANTA and has served on the boards for APICS Atlanta and the Georgia Manufacturing Alliance. Follow Scott Luton on Twitter at @ScottWLuton and learn more about Supply Chain Now here: https://supplychainnow.com/

 

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