Twenty-five years after the adoption of the Universal Product Code (U.P.C.), the role that bar-coded, scanable items play in our lives is taken largely for granted. Yet, the adoption of an industry standard for the symbol remains a watershed event that has changed the grocery manufacturing and retail industries.
The story of the U.P.C.'s development is one that offers lessons in today's business world. The economic benefits of the U.P.C. had to be large enough to drive investment and conservative enough to stand up to the inevitable skepticism that would be leveled from the beginning. The original Ad Hoc Committee's management of the business case for the U.P.C. is an instructive lesson for today's managers. The success of the U.P.C. effort reflects the keen insights of its founders to provide real solutions backed by conservative estimates of hard dollar savings.
Representatives of the Uniform Code Council approached Pricewaterhouse Coopers (PwC) to ask if the firm would develop a research paper on the first 25 years of the U.P.C. One of the paper's principal researchers, Charles Jones, was involved in validating the original business case for the U.P.C.
The research was based on a review of the original business case information and interviews with the principals involved in the 1971-1975 Ad Hoc Committee effort. Industry experts at PwC compared the 1973 economic forecast for the U.P.C. to the reality of its impact in 1999. Both planned and unforeseen economic benefits were evaluated and updated to reflect today's food and retailing industry. The dollar impact on the industry was then summarized for both manufacturers and retailers. Based on PwC's work with these industries and their trade associations, the affect of fully realizing the savings inherent in the information content of U.P.C. related transactions was forecast in dollar and percentage of revenue terms by type of savings opportunity.
Following are key findings to be reported in the PwC presentation.
Twenty-five years after its initial use, the actual impact of the U.P.C. on the nation's food industry is nearly 20 times greater than the original forecasts. Without the economic impact of the U.P.C., food prices to the consumer would have risen almost twice as fast over the last 25 years.
The conservative, hard dollar savings originally forecast by the Ad Hoc Committee have been exceeded by nearly 45 times. The value of the information content of the U.P.C. was more speculative, however, this forecast has been exceeded by nearly 20 times.
Looking to the future, identifiable savings opportunities that flow from the information content of the U.P.C. are larger than the savings achieved thus far. The question facing the grocery manufacturing and retail industries is if they will find an equivalent of the Ad Hoc Committee to lead them into the next millennium.
