Contributed by Anku Sharma
June, 1974 Marsh’s supermarket in Troy, Ohio made a history in retail. It scanned the barcode for the first time on a Wrigley’s gum. Since then barcodes, the tiny little strip of black and white bars has revolutionized the supply chain of many businesses. The codes identify a product and help in distinguishing between one kg of Dawat basmati rice from a 35 gram Cadbury chocolate. When a bar code is scanned, the information in the store's database lets the retailer assign a price and track sales and inventory. It integrates all stakeholders of the supply chain- the manufacturer, distributor, transporters and the customers. It ushered a new era of increased productivity for the retailers. In India, it was 10 years ago that the IT task force made the barcode compulsory advocating adherence to international conventions.
Barcodes was a revolutionary tool for Indian retail. In the initial years the tussle was between the retailers and the vendors as to who would take the onus of bar-coding the products. The reason was that the FMCG players for decades have been used to supplying to kirana stores, who still don’t find the need to use a barcode. But with the rise of organized retail the balance of power has shifted to the organized players. In 2004 the then major retailers Food world Supermarkets, Grant wholesale club, Nilgiris and Trinethra Super Retail jointly announced to standardize FMCG products in India by making it mandatory for all suppliers to use universal EAN barcode guidelines. Food world made an estimated 40 Lac saving from this initiative. Still the many vendors don’t follow the EAN guidelines.
Standardization of barcodes is another challenge in the Indian Retail Industry. Standardization means using 890 (representing India) in first 3 digits of the barcode. FMCG sector has taken a lead in this process but other segments still are lagging behind. This tussle of standardization and who takes the onus the vendors or the retailers is not peculiar to India alone. In 2005, retailers in the United States and Canada faced an uphill task while shifting from the 12-digit bar code to 13 digit bar code. The additional number was enough to make checkout scanners freeze, crash the computers and thus bring to halt the entire supply chain. But the supply chain stakeholders joined hands to keep the business running. An interesting case is that of Ace Hardware, which has 5,100 stores selling 65,000 coded products. Ace. The company has retail outlets in 70 countries and has a network of more than hundred foreign suppliers. It took them a hired consultant, Cognizant Technology Solutions, which is based in Teaneck, N.J., and is a division of Dun & Bradstreet and good two years to complete the transition. Ace's in-house team worked on the project during the day while a Cognizant office in India took over at night. Imagine the power small little black strips have!!
