A group of academics and business executives is planning to introduce next month a next-generation bar code system, which could someday replace with a microchip the series of black vertical lines found on most merchandise.
The so-called EPC Network, which has been under development at the Massachusetts Institute of Technology for nearly five years, will make its debut in Chicago on Sept. 15, at the EPC Symposium. At that event, MIT researchers, executives from some of the largest global companies, and U.S. government officials intend to discuss their plans for the EPC Network and invite others to join the conversation.
The attendee list for the conference reads like a who’s who of the Fortune 500: Colgate-Palmolive, General Mills, GlaxoSmithKline, Heinz, J.C. Penney, Kraft Foods, Nestle, PepsiCo and Sara Lee, among others. An official from the Pentagon is scheduled to speak, along with executives from Gillette, Johnson & Johnson, Procter & Gamble and United Parcel Service.
“I see this (event) as a formal marker that is pretty key,” to the development of these next-generation systems, said Pete Abell, analyst at the ePC Group, a research firm tracking the technology.
EPC stands for electronic product code, which is the new product numbering scheme that’s at the heart of the system.
There are several key differences between an EPC and a bar code. First, the EPC is designed to provide a unique serial number for every item in the system. By contrast, bar codes only identify groups of products. So, all cans of Diet Coke have the same bar code more or less. Under EPC, every can of Coke would have a one-of-a-kind identifier. Retailers and consumer-goods companies think a one-of-a-kind product code could help them to reduce theft and counterfeit goods and to juggle inventory more effectively.
The way it’s been designed, an EPC can be linked to databases that can store much more information about a particular product than is possible with the bar code. In addition to price and manufacturer, the EPC could link to information about location of an item based on a complex system of readers and microchips, or “tags,” that communicate via radio frequency, a concept known as radio frequency identification (RFID).
“Put tags on every can of Coke and every car axle, and suddenly the world changes,” boasts the Web site of the Auto-ID Center, the research group at MIT leading the charge on the project. “No more inventory counts. No more lost or misdirected shipments. No more guessing how much material is in the supply chain–or how much product is on the store shelves.”
Another feature of the EPC is its 96-bit format, which some say is large enough to generate a unique code for every grain of rice on the planet. “Every molecule on Earth is what the MIT boys said,” Abell said.
The 12-digit bar code that’s used across the United States was introduced in the 1970s, and the retail industry is close to running out of new combinations. The industry is in the process of moving to a 14-digit code in the next year or so, but Abell said that’s just a stop-gap measure. “We ran out of room” with the bar code, he said. “The EPC solves all of that; there is plenty of space in there.”
Yet, the EPC Network–the EPC specifications and technology related to them–is still very much in the laboratory stage and probably won’t begin to replace bar codes for at least a decade, said Abell.
That’s because the price of the EPC tags needs to fall from nickels and dimes today to fractions of a penny. Protection of consumer privacy is also a concern. Wal-Mart Stores and Britain’s largest retailer, Tesco, both ended the first in-store trials of the technology after privacy advocates spoke out against them. In addition, standards are still being developed to ensure that tags, readers and related computer programs from different technology suppliers all work together.
Working on the standards problem is AutoID, a new arm of the Uniform Code Council, the nonprofit that administers the bar code, or Universal Product Code. AutoID, announced in May, plans to pick up where MIT’s Auto-ID Center leaves off, assigning codes, ironing out technical standards, managing intellectual property rights, publishing specifications, and providing user support and training. Heading the group is Dicki Lulay, a former executive at Nabisco Foods and McCormick & Company.
“The Auto-ID Center has done a great job, but you need a global standards body,” Abell said. “Everything from Auto-ID Center is proposed; it’s a draft. You can’t say, ‘Oh I can build my systems around that.'”
Representatives from AutoID and MIT were not immediately available to comment.
AutoID will likely release the first set of EPC specifications either at the EPC Symposium or within the next couple of months, Abell said. Wal-Mart is expecting them by November. Sometime that month, the retailer is scheduled to hold a meeting with representatives from its top 100 or so merchandise suppliers at its Bentonville, Ark., headquarters, Abell said.
At that meeting, Wal-Mart intends to present its detailed plan for setting up an EPC system for tracking shipments to its distribution centers, he said. The company has asked the suppliers to begin attaching RFID tags to the large containers and cases they ship to Wal-Mart by 2005.