Figure I.
Supermarket data collection (these online terminals are constantly transmitting data to an instore computer at the
same time as taking money)
Point-of-sale terminal systems
Retail businesses need fast, accurate information to
remain profitable. JackPoole describes how computerized
point-of-sale systems are helping retailers to maximize
their profitability in a very competitive field.
The retail trade is turning increasingly to computerized
systems to provide quickly and accurately the information
that it needs to remain profitable.
NCR have developed several ranges of computerized
point-of-sale equipment for different retail applications.
Various systems in use in the food and non-food retail
trades are discussed, including those o f the Army ~ Navy
group (UK), David ]ones (/4 ustralia), the Co-Op (UK) and
airport duty-free shops.
Optical character reading and laser-beam slot scanning
will be used to automate further the transaction procedure
at the point o f sale.
Since the introduction of self-service stores some 30 years
ago, the most important development in the retail trade has
been that of electronic sales registers and point-of-sale
terminals.
Retail businesses need fast, accurate trading information
to remain profitable. Economic forces affecting the retail
trade are high inflation, price legislation - with pressure
from both government and consumer bodies - very active
competition, rapidly rising costs and falling profits, and
difficulty in hiring and keeping staff. Because of this, the
trade is increasingly using sophisticated computer
equipment. However, the equipment is only as effective
as the use to which it is put by management.
Any business involving exchanging merchanise for
money needs information. This information is the only
means of measuring and controlling sales activity, and
must therefore be accurate and complete. The obvious
NCR Ltd., 206 Marylebone Road, London NW1 6LY, UK
vol 1 no 1 february 78
point for the collection of sales data is the point at which
goods are exchanged for money - the cash desk. The
accuracy and the extent of this information and how it
is gathered depends on the type of sales register.
Rapid expansion and new merchandizing trends have
created an acute need for more effective and immediate
management systems. Operating on slim profit margins
and with heavy overheads, today's retailer must obtain
maximum profit from every square metre of selling
space. Rising costs have meant the need for more
accurate methods of recording information at the point
of sale. To achieve this, retailers are installing
data-collection, communications and processing systems.
Information systems are continually introduced to meet
the demand for more sophisticated products and
application software.
FLEXIBILITY
Even the simplest electric sales register can give the
retailer vital information, handle transactions quickly
and maintain positive control through instant availability
of management information. Simple electronic sales
registers can provide up to 40 departmental totals, with
department and transaction keys clustered round a 10-key
numeric pad. Later models can be modified to customers'
specific requirements. Computerized point-of-sale (POS)
systems can be programmed to meet the particular needs
of a wide variety of businesses. Systems must be flexible
enough for them to meet the requirements of any outlet,
whether the business is a large multiple with hundreds of
shops, a supermarket, a department store or a small
specialist business with only three or four shops. The
same system can be used for companies marketing anything
25
from fashion, furnishings, electrical equipment and
similar, highly priced, more slowly turned-over goods,
to a hardware store stocking thousands of different lines
and having a more rapid turnover. Whatever the size of
the company, success or failure depends on being able
to monitor all information as accurately as possible. To
accomplish this, and maintain profits, individual shops and
headquarters management must have daily access to sales,
merchandise and accounting information for stock control,
general accounting, customer credit facilities etc. Every
step in the merchandizing cycle from the time an item is
purchased to the time it is sold to the customer must be
recorded and accounted for, giving a complete audit trail.
EXPANDING DATA COLLECTION
A properly conceived POS system can be added to as a
business grows.
There are three types of data collector. First, the
simple free-standing register, which collects data, holding
them within itself, but is fairly limited. Second, there
are free-standing electronic sales registers with core memory
storage, which provide printed reports, but which collect
data in such a form that they can be entered into a
communications network via magnetic tape or cassettes,
which can be either hand-carried or mailed, or the data on
them can be transmitted via PTT lines by polling. I n the
third category are instore processor/minicomputer-driven
online terminals and the emerging microcomputer-based
equipment.
In the second category are the NCR 250 sales registers
and 280 electronic sales terminals, hundreds of thousands
of which are in use worldwide. The 280 is particularly used
in non-food retailing. The 280 is an intelligent terminal,
and has a full stand-alone capability. All functions
necessary for the recording of sales data are available within
each terminal; data collection for feeding into a full
communications network is the only task for which the
280 depends on an external device. Used in a free-standing
mode, the 280 has three separate printers for the audit
roll, customer receipt and sales bill. It has full
alphanumeric printing facilities plus six symbols and 30
print columns. The printing speed is 75 line/min. A 280
,, .
k 7
Figure 2. NCR 7867 hand-heM OCR-A reader
26
terminal can be linked to a cassette recorder. All sales
data entered through the terminal's keyboard are captured
on a magnetic-tape cassette (ANSI 8000bit/in), which is
physically carried to the processor. Here the batch of
cassettes from each store is entered on a 7- or 9-channel
NRZ magnetic tape using the cassette station of a
processor/minicomputer such as the NCR 725. This tape
is then hand-carried to a central mainframe computer or
input over PTT lines. Tape marks on all cassettes prevent
them from being overwritten. For nonfoods, a cassette
takes approximately 3min to read, and for foods about
4.5 min. The standard cassette length is 282ft, and it will
hold up to about 125000character/track. It has been
found that, under normal conditions, one cassette per
terminal will usually hold a complete day's transactions.
The cassettes are then returned to the store for reuse.
OCR-A SCANNERS
The flexibility of terminals such as the 280 make it
possible to use OCR (optical character recognition)
scanners to feed sales information more accurately into
the system. The NCR OCR-A scanner is a hand-held
device that reads prices and other information printed
in an OCR font on merchandise tags (Figure 2). It is
pistol-shaped and weighs 6oz. OCR tags can be read by
people as well as machines. The scanner reads the
data, edits them, and transmits them to a retail terminal.
The scanner can be used with the NCR 280, 250, 2135
and 2151 equipment.
The scanning systems have been extensively tested by
retailers, and over 1 500 of these devices have
been installed worldwide. They have been adopted as
an industry standard by the USA non-food retailers'
official body the National Retail Merchants Association.
Research and development funds of millions of dollars
have been allocated to developing OCR technology.
The result of this will be a steady flow onto the market
of the peripheral hardware essential to the successful
implementation of OCR scanning in all retail environments.
Hand-held readers, document scanners, inexpensive printers
and computer-driven tag printers are available now.
An OCR font provides a set of characters that includes
an alphanumeric system as well as special symbols that
can be read by the human eye and electronic equipment.
The OCR-A font (the version adopted by the N RMA and
offered by NCR) and also the OCR-B font are widely
used; both can be scanned by hand-held readers. Pre-
printed tickets (Figure 3) or labels can be scanned forwards
or backwards. The maximum number of characters that
can be read is limited only by the terminal receiving the
interpreted binary coded message. Major retailers in the
USA, such as Sears Roebuck, J C Penney and Montgomery
Ward, are expanding their installations using OCR
technology. OCR may become the least expensive of
data-capturing technologies, since a relatively standard
ticket stock can be used. There are 10 printed
characters per inch, and the labels can be small, since the
characters can be read by people and computers.
Automatic reading is faster and easier than manual
data entry. In a typical manual transaction, the sales
assistant records several numbers, indicating the
department, stock number, colour or style, who the
assistant is, the price, and, in the case of a credit
transaction, the customer's account number. With
automatic reading, the information can be recorded by
computer communications
passing the scanner over the merchandise tag. This is more
accurate than the manual method. In even the best of
manual key-entry systems, numbers can be transposed or
the wrong number entered. With larger numbers, the
likelihood of error obviously increases. These errors can
be eliminated with the use of automatic readers.
Scanners can be an integral part of a total retail system
that tracks merchandise electronically through the entire
merchandizing cycle. OCR scanners include a small
electronics unit that is linked to the terminal. This unit
checks for invalid characters before transmitting the data
to the terminal. Each unit has a programmable read-only
memory chip that can incorporate each department's
individual format specifications. The formats can be
changed by plugging in a new chip. Using a tag printer
that is online, a retailer can issue OCR tags to correspond
with delivery of goods from the wholesaler from
information in a goods-inward file. These are then
despatched to the store with the goods. Figure 4. Polling via PO lines links the retail terminal
directly to a central processor
SECURITY security control, which is essential in a trade where it is
very easy for stock to 'go missing', especially when items
OCR scanners are comparatively new in the UK. By the
are out on trial or hire purchase.
end of 1977, three or four companies had adopted OCR
Details of all goods are entered into the mainframe
technology. One company, a Leeds-based TV and Hi-Fi
computer on delivery, and a tag is automatically printed
specialist, Vallances, are installing a sophisticated system
that is attached to each item before distribution to
in their chain of shops. They chose OCR-A scanners
each store. The OCR tags are then read by the store
because of the complexities of the pricing methods in their
scanners, which record the alpha description of the item,
retail trade. One of the principal advantages of OCR
the stock number, and the type of transaction, and store
is its flexibility in dealing with price changes (e.g.
the information, via the NCR 280, on cassette. This
markdowns etc.) at store level, and the backup it affords
cassette-captured data is processed and matched to the
from computer files should labels become damaged or
original information held on file in the computer.
detached from the merchandise.
In the electrical-equipment trade many different types
of transactions are used, such as discounts, markdowns,
RETAIL POLLING
special offers, record tokens, returns and exchanges, For larger chains of stores that have their own central
deposits, repairs, TV tube insurance, and HP and short- computer, accumulating all the cassette-captured data
term-credit schemes. Vallances are using OCR scanners for central processing can be a time-consuming
to read tags that they produce with an online tag printer, exercise. One electrical discount multiple has overcome
controlled by their computer at headquarters, to record this problem by using a polled system to centralize data
information on every stock item. The main function of from over 150 branches on a daily basis. Point-of-sale
this is to control stock, but the system also provides tight information is collected on cassette by a mixture of
NCR 250 and NCR 280 electronic data-capture terminals.
The NCR 250s, which are located in the warehouses,
are equipped with a polling kit. This kit can be
retrofitted to 250 models that have a data-capture
ability, providing retailers with a method of online data
transmission using existing equipment. The 280s are
M578q023 linked via a cassette recorder to a pollable cassette
>+1q,25 concentrator (NCR 751) (Figure 4). The 751 is located
at store level.
A minicomputer (in this case, an NCR 725) using
STORENAME
D6 6 7 0 U 3 7 35 [
h
MLR (multiline receiving) software dials up each 250
D507 LJq8
PI 6 q 5 > + 1 9 , q 5
J terminal via a modem, and each 751 concentrator in a
M2296501 D6 6 7 0 U 3 7 35 ] predetermined rotating sequence, using auto/dial
switched PO lines at night during off-peak periods. Up
>+35,00
m

STORENAME
PI 6q5 > + $ q , q 5
J to eight telephone lines can be used simultaneously,
operating at 600 or 1 200 bit/s. The information received
D507 tJq8 is recorded on 7- or 9-channel N RZ tape. As each store
M22q6~502 ends transmission, the MLR software automatically
>+35.00
dials up the next store for transmission. This sequence
continues until all the stores/terminals have transmitted.
This takes up to 7h, depending on the amount of
Figure 3. Sample OCR-A tickets (D-department number, business transacted during the day. The accumulated data
M-merchandise number, P-miscellaneous data, U-class, is subsequently processed and analysed by a mainframe
+-price) computer.

vol 1 no 1 february 78 27
CREDIT CONTROL
With a very large department-store network, a high
proportion of customers will have personal accounts.
In fact, with the increasing use of cheques and credit
cards such as Barclaycard, American Express, Access,
Diners' Club etc., less and less business is transacted
on a straightforward cash basis. This creates more
problems for large retailers. David Jones, one of
Australia's largest department-store groups, has installed
a computerized system that deals with all aspects of their
business. The system is based on an NCR Criterion 8550
computer which has a 256k memory and 500Mbytes of
disc storage, and 375 NCR 280s equipped with OCR
scanners. The NCR 280s are linked to NCR 725 instore
controller processors, which are linked via communication
lines to the Criterion. This enables store staff to
communicate instantly with the central computer from Figure 6. NCR 2151 retail terminals recently installed in
any sales counter in any store. Shoppers are able to the Army & Navy's store in Victoria Street, London
purchase or change goods from any department at any
terminal in the store, promoting a smoother crossflow A response code is sent to the terminal, instructing the
of store traffic and eliminating the frustrations associated sales assistant to go ahead with the transaction (if the
with departmental buying. Customers are also able to customer is credit-worthy) or not. In most cases, the
make payments to their credit account through any 725 authorizes credit when feasible and responds so
terminal, automatically updating the central computer rapidly that the customer is unaware that his or her
master file. credit rating is being checked. A feature of the system
Each 280 retail terminal processes customer is the capacity to set up a file never to refuse credit to
transactions at the point of sale. With a credit- preferred customers.
authorization-enquiry software module, the terminal The system reduces personnel costs (less supervisors
transmits a credit or cheque authorization message to are necessary), personal intervention being needed only
the 725. The 725 either authorizes the request or in certain instances. It improves customer service - the
transmits it for referral to the central computer. The authorization of a personal account is a byproduct of
computer checks the credit rating, and sends the recording the transaction, and the customer does not have
response back through the 725 to the POS terminal to wait to have his creditability verified. The system can
(Figure 5). In that way, the 725 becomes not only also be tailored to a store's own credit system. A total
an authorizer, but also a message router for the
computer system reduces fraud, whether by employees
credit-authorization-function system operation. A sales
or customers, reduces bad debts, and the expenses incurred
assistant records a transaction on the terminal,
by the retrieving of these, and monitors customers' credit
transmitting the account number, type of sale and
limits.
amount to the 725. The response is determined via the
lookup file and update. If it is a referral, the credit
record is automatically displayed in the credit office. COMPUTERS A N D THE PUBLIC

7867 OCRA The most recent department-store retail terminal to be

reader developed by NCR, the NCR 2151 (Figure 6), brings
the computer to the public, as it is itself a
t e r m i n a l ~ minicomputer. The utilization of microprocessor
technology within the 2151 expands the programming
capabilities of POS terminals. It makes it economically
feasible to provide more memory capacity within a
Retailstore small physical area. The terminal incorporates a 48k
random-access memory, and can act as a relatively
powerful processor. Additional memory makes it
Distr bution J ~J 725 network possible to process many more types of transactions
centre ~ controller
and applications than previous generations of terminals
Consolidofed / ~ L could. The software architecture includes the
9 channelNRZ / I~1 I ~ - ~ - ~ ] T ~ _ - - ---) 644 OCRA
tapeb a c k u p / J ~,~ ~ ticketprinter application virtual machine (AVM) and a software virtual
machine (SVM). The AVM consists of application-
...................................................~ .... orientated software modules written in a high-level
field-manipulation language. The SVM consists of
the software modules that are written in the assembly
Central language of the microprocessor. As well as a micro-
processor
processor, it has a memory and a communications
Figure 5. Electronic sales terminal system with interface. Unlike previous terminals, the 2151 uses
concentrated data capture, automatic reading of OCR-A read/write memory rather than read-only memory (RAM),
tags and automatic consolidation of date at the distribution which means that a retailer can make programming
centre changes via the keyboard, eliminating the need for

28 computer communications
hardware retrofits. The terminal allows freedom in the
transaction sequence, as the user is no longer limited
to a preset list of available steps in transaction entry.
Entry processing print controls and the output are also
adaptable to individual requirements.
Matrix printing allows any character set to be used;
print data can be generated from the terminal or from the
store processor. The matrix printer has three separate
print stations: one for the customer receipt, one for
the sales slip and one for the transaction journal. The
2151 has been designed to supersede the 280. Because
it has evolved from the same system concepts, retailers
can add 2151s to their existing 280 system networks.
This compatibility enables users to evolve new systems
without making their existing configurations obsolete.
The terminal is designed for use with a processor using
MOS memory called the 6080. The computer system
can be configured with a broad range of capabilities and
a variety of peripherals. It can be used as a line
concentrator, terminal controller or a remote store
processor, as well as a full store processing system. The
6080, by incorporating an internal architecture that is
similar to the 725 store processor, allows a department
store to run interactive transaction processing
programs alongside its existing system.
The 6080 can be expanded and modified to meet
a store's changing needs. The basic configuration has
up to 128kbyte of memory. This creates a flexible and
adaptable system. Incremental memory growth up to
512kbyte and multiprogramming options will be avail-
able. Peripherals include disc systems (from 200Mbyte
3330 compatible units down to floppy discs), multiple
printer options, cassette units, I/0 writers, magnetic-
tape storage and VDUs. The 2151 can be used with an
OCR reader, and can also be fitted with a cassette data-
capture unit. It can communicate directly with an instore
controller/processor, or remotely via an integrated modem.
The Army & Navy UK store group is the first in
Europe to use this system (Figure 7). 60 NCR 2151s
have been installed in their newest store in Victoria Street,
London, and nine other stores in London and the South of
England. All these will be linked to the central processor.
As with the David J ones store, the system concentrates
heavily on credit control.

Bromle¥
9-track
NRZ800 Dual
tape
unit L. I unit I
I
I
/ I
cassette
unit
260 p
synchronous ~
concentrator J

6440 605
processor I/O FAId_~__ersh.__oot_
matri
printerx • 64K memory• - writer
thermal
printers, Camberiey

modem I Chichester
-ID
[,
,dem I~ II
~ K e n s i n g t o n
ff Maidstone
,51-600 ~ ,5,-6oo I
synchronous I synchronous I
concentrator concentrator ~
Westmi
I I
nster

' ScTyo5~lrOhl°aL
crtr~
Seo60
I
] ~to r~
I
I
pox I ln:t,onl
|junct,on| po Eastbourne

I I modem ~ I
synchronous
concentrator

'-:'-] I ;'1~' II ;1161I Fq I

11750 1
ti°nll t°1
E
I
L
Figure 7. Hardware configuration for the Army & Navy group

vol I no I february 78 29
ONLINE SUPERMARKET SYSTEM
The very rapid turnover of thousands of lines in the
average supermarket requires a different type of
management system. The food retail trade needs more
frequent and detailed supervision; shelves have to be
constantly restocked, lines must be immediately reordered
before they run out, and fresh foods must be sold to
eliminate profit loss through wastage. The whole industry
operates on very narrow profit margins, and cannot
afford losses. Petty pilfering is very common.
In recent years, the trend has been for grocers' shops
to grow into supermarkets, which, in turn, have evolved
into superstores, and today's giant hypermarkets. For
stores of this size, even the more powerful freestanding
electronic sales registers are not adequate to give
management immediate access to the up-to-the-minute
information required. The NCR255/726 system has been
specially developed for this market. Since one was first
installed as a pilot scheme in 1973 by Marsh Supermarkets,
a 64-supermarket chain headquartered in Indiana, USA,
30 000 255/726 systems have been installed. NCR 255
checkout terminals are being installed, at the end of 1977,
at the rate of I 000 a month.
The 255/726 is an instore interactive online computer
system. It comprises a number of 255 checkout terminals
operating online under the control of a 726 instore
processor/minicomputer. Sales, merchandise, and
accounting information is recorded by the 255s and
transmitted to the 726, where the data is processed,
updated and stored for instant access when needed for
management information (Figure 8). The minicomputer
provides central intelligence and control for the functions
of each terminal, and provides nonvolatile core memory
for the storage of all system totals and program instructions.
A high-speed instore communications system connects the
726 to each terminal. This front-ended system is controlled
by an application software package specially written for the
retail trade. The software required to drive the 255/726
system can be divided into two parts : the operating-system
software, which is the same for all 255/726 installations,
and the software generated to satisfy the requirements of a
Headquarters
osits Reports . ~ [ ~
;::3]
Receipts[ ~ ~Office
~ Reports
~ Controe
lr
Figure 8. Typical 255 report utilization
30
Adapters
Foreground Interrupt
initiate ser~ce
(FGINIT) routine
([SR)
System -- Backgrc,Jnd
interchangeable initiate
executive -- (BGINIT)
(six)
Input data
controller
Interval
timer
(IDC)
J Applicationprogram ....1
Figure 9. Interaction between 255/726 software
particular installation, i.e. the retailer's application
program.
The operating-system software is called the System
Interchangeable Executive, and is in a module that controls
the sequence in which I/O routines and application
programs are executed. It continually monitors the
overall status of the system, and provides a standard
method of communication between modules (Figure 9).
I/O control routines within the executive link the
terminals and other peripheral devices with the application
program, and transmit it to the appropriate terminal or
peripheral device.
An input data controller (IDC) decodes input data into
the format to be used by the application software. It
separates the source and function from each data word
coming in through the adapter, and builds a subbuffer for
each terminal's input. As soon as it detects a complete
message, the message is sent to the application software by
means of an interrupt routine, which interrupts the
executive every 10ms, and reschedules the I DC every 20ms.
It recognizes several characters, including print demands,
clear key pressed etc. Tables in the 726 contain the
parameters, totals and optional information, such as the
number of lookup entries (prices etc.) required to make the
system function.
The 255/726 system is expandable. It is possible to add
modules and peripherals, including UPC and EAN slot-
scanning capabilities. I n operation, the system automates
tax calculation (in countries where it is required by the
government), pricing, price and quantity extensions,
trading-stamp computations, change and customer credit,
and categorization of types of goods sold. The system also
provides extensive information and control capabilities,
including automatic price lookup, automatic credit-refusal
authorization and net department sales analysis. The 255
terminal has the ability to verify data as they are recorded.
The automatic calculating functions increase checker
efficiency.
Should communications between the terminals and the
minicomputer be disrupted, the 255s will continue to
operate in a standalone mode. An offline total of sales is
maintained, and, when communications are restored, the
system automatically distributes this total to the various
departments on a pro rata basis - calculated according to
the percentage contribution of each department to total
sales.
computer communications
 The 255 can be linked to automatic coin dispensers, a
remote display unit, tag readers and slot scanners. The
terminal also prints out management reports on a daily
basis, or, on request, at any time of the day, giving an hour-
by-hour analysis of store activity in terms of the number of
customers, net sales volume, number and type of items
sold, average amount spent by each customer, and the
average number of items bought.
The minimum-size 255•726 system contains 32 kbyte of
memory for program storage and totals accumulation. This
memory can be incremented in 16k stages to a maximum of
64kwords. Each word in the memory comprises 16bits of
data and one parity bit. The 16bits can be used to store a
16-bit binary value, two 8-bit alphanumeric characters or
four binary-coded decimal digits.
In a multiple-store system, data is collected at each store
during the day and transmitted after working hours to a
central processor. The 726 is placed in an unattended
transmission mode, and is polled by a multiline receiver or
a mainframe computer.

NCR 255 ERROR C O R R E C T I O N

The 255 checkout terminal has facilities for error
correction via three keys, namely 'void', 'error correct' and
'clear bar'.

Void
The void key is used to 'backout' an item that has been
entered in error at any time before finalizing the
transaction. The checkout operator presses the void key
and then enters details of the item to be deleted. The void
key would be used, for example, if, at the end of a
complete transaction, the customer has an unwanted item
or has insufficient money to meet the entire bill.
Error correct
The error-correct key is used when an operator has wrongly
entered the last item through the numeric pad, and has 'put
away' the information, through a department key, to the
central processor.
Figure 1 I. Tin of fruit carrying a bar code being passed over
a laser-beam slot scanner at the Irma supermarket in
Copenhagen (part of NCR 255/726 modular checkout
system)
Clear b a r
The dear-bar key is used to correct an error immediately.
If the operator realizes her mistake before the information
has been transferred via the department key to the
processor, she can correct the error with the clear bar
before the processor has acted upon the received data.
An optional error tone sounds if there is an incorrect
entry sequence or if more than one key is pressed at the
same time. The operator will then correct via the error-
correct key or the clear bar. The central processor can be
programmed to make the terminal print a slip as a hard-
copy record. The slips are kept by the operator. At any
time during the day, it is possible for management to access
details of these totals from the 255 printout, which is then
checked against the slips to give an accurate record of the
number and type of error made at each checkout.

F I RST 255•726 SYSTEM

Figure I0. NCR 255 checkout terminals in KLM's duty-
free centre at Amsterdam's Schiphol Airport
The first 255/726 system in the UK was installed in 1975
by the Co-Op in a custom-built superstore near Manchester.
Since then, the Co-Op have installed similar checkout
systems in several other superstores. Other large national
chains have installed similar systems in the UK, including
Woolco, the International Stores and SavaCentre, the
BHS-Sainsbury joint venture.
Comparatively small supermarkets with only ten or so
checkout lanes are now installing systems.
255/726 systems are also being used in airport duty-free
shops. Systems are already in use at Schiphol,
(Amsterdam), Zurich and Geneva airports, amongst others
(Figure 10). Duty-free shops must keep very accurate and

vol I no I february 78 31
up-to-date stock records for the Customs & Excise
departments. The system also provides instant currency
conversion.

SLOT SCANNING

255/726 systems can be fitted with laser-beam slot scanners

(Figure 11). Slot scanning is the result of the development
of the Universal Product Code (UPC), a standardized
system for identifying and marking retail products that has
made it possible to automate store checkout operations.
For several decades, food-industry leaders have investigated
the possibility of developing and adopting a standard
numbering system, which would mean that each item 5
would carry an identification code. Each food retailer,
wholesaler and manufacturer in the food-distribution Figure 12. EAN bar code (the symbol can be read by a light
industry would have his own unique code. The benefits of pen or other electronic scanning devices)
such a system would be far-reaching.
The US food industry has agreed on a uniform code (the trademark. 40% of the items are manufactured or packed
UPC). Almost all packaged and tinned goods in the USA by Irma.
already carry this code. With the UPC system, the first The Irma scanning installation demonstrates that scan-
group of numbers represents the manufacturer, and the last ning need not depend on a universal product code. Albert
group the product and size. Heijn, in Holland, introduced slot scanning in May 1977, on
The European food industry has now agreed on a an experimental basis.
universal code for Europe. This was evolved from the UPC,
with the addition of a code denoting the country of origin, F I N A N C I A L A D V A N T A G E S OF SLOT
and is known as EAN (European Article Numbering). SCANNING
The product code is a numbering system that assigns a The estimated financial benefits of converting to slot
unique number to every product currently in distribution. scanning are, according to McKinsey & Co. Inc., as follows:
The growth capacity provides for codes having up to 30
characters. Vertical bars and spaces make up the UPC or 'Hard' savings
EAN scannable symbol, and the corresponding human-
readable characters are OCR-B optical-font characters Front-end labour 0.27% of sales
(Figure 12). The symbol can be read by electronic scanning Price marking 0.37% of sales
devices. The code only identifies the manufacturer and Misringing 0.10% of sales
product; it does not contain the price either in code or Front-end administration 0.08% of sales
human-readable characters (the prices are displayed on the
shelves). The slot scanner, a laser-beam device incorporated 0.82% of sales
into the checkout belt, 'reads' the product code.
Slot scanning takes the place of ringing up food items in 'Soft' savings
the manual method. As the checker moves each symbol-
marked item across the scanning slot, the NCR 782 scanner Sales increase, merchandizing 0.58% of sales
emits light that reflects off the UPC symbol. This reflected Shrinkage reduction 0.27% of sales
light is read optically and transmitted as an electrical Labour scheduling 0.23% of sales
impulse to an instore NCR 726 minicomputer/processor. Ordering, checking, warehouse
The processor looks up the price from a peripheral disc administration 0.29% of sales
memory unit, updates the control totals and transmits
information to the checker's 255 terminal. Irrespective of 1.37% of sales
the alignment of the symbol as the checker moves it across
the viewing slot, the NCR 782 reads the printed code. As Although these figures are theoretical, they have not yet
the scanner reads the symbol, the price is flashed on a been refuted.
digital display panel. In addition to printing the price and
product description on the customer's receipt, the 255
CONCLUSIONS
departmentalizes the item, selects the correct taxable total
(where necessary) and computes any change in the price With marketing methods becoming more sophisticated, and
(for a split package, for example). competition more intense, stores and supermarkets will
It is not expected that laser-beam slot scanners will increasingly turn to computerized POS systems to provide
be in common use in the very near future, as, to make their them with the accurate and up-to-date information
use economically viable, supermarket executives consider necessary for them to maintain their profits and stay in
that at least 75% of a supermarket's goods must be coded. business.
The first stores to use scanning extensively are likely to
be multiples carrying their own branded goods. The first BIBLIOGRAPHY
European scanning system was installed at the beginning of
1977 by Irma, a Danish supermarket chain with 180 Evaluating the feasibility of SPNS (Standard Applied
outlets. 95% of the 7000 items stocked carry their own Numbering System) in the UK McKinsey & Co. Inc. (1974)

32 computer communications