In 1948,
Bernard Silver, a graduate student at
Drexel Institute of Technology in Philadelphia, Pennsylvania, US overheard the president of the local food chain,
Food Fair, asking one of the deans to research a system to automatically read product information during checkout. Silver told his friend
Norman Joseph Woodland about the request, and they started working on a variety of systems. Their first working system used
ultraviolet ink, but the ink faded too easily and was expensive. Convinced that the system was workable with further development, Woodland left Drexel, moved into his father's apartment in Florida, and continued working on the system. His next inspiration came from Morse code, and he formed his first barcode from sand on the beach. "I just extended the dots and dashes downwards and made narrow lines and wide lines out of them." The
Boston and Maine Railroad tested the KarTrak system on their gravel cars in 1961. The tests continued until 1967, when the
Association of American Railroads (AAR) selected it as a standard, automatic car identification, across the entire North American fleet. The installations began on 10 October 1967. However, the
economic downturn and rash of bankruptcies in the industry in the early 1970s greatly slowed the rollout, and it was not until 1974 that 95% of the fleet was labeled. To add to its woes, the system was found to be easily fooled by dirt in certain applications, which greatly affected accuracy. The AAR abandoned the system in the late 1970s, and it was not until the mid-1980s that they introduced a similar system, this time based on radio tags. The railway project had failed, but a toll bridge in New Jersey requested a similar system so that it could quickly scan for cars that had purchased a monthly pass. Then the US Post Office requested a system to track trucks entering and leaving their facilities. These applications required special
retroreflector labels. Finally,
Kal Kan asked the Sylvania team for a simpler (and cheaper) version which they could put on cases of pet food for inventory control.
Computer Identics Corporation In 1967, with the railway system maturing, Collins went to management looking for funding for a project to develop a black-and-white version of the code for other industries. They declined, saying that the railway project was large enough, and they saw no need to branch out so quickly. Collins then quit Sylvania and formed the
Computer Identics Corporation. A wide variety of barcode approaches was studied, including linear codes, RCA's bullseye concentric circle code,
starburst patterns and others. In the spring of 1971 RCA demonstrated their bullseye code at another industry meeting. IBM executives at the meeting noticed the crowds at the RCA booth and immediately developed their own system. IBM marketing specialist Alec Jablonover remembered that the company still employed Woodland, and he established a new facility in
Research Triangle Park to lead development. In July 1972 RCA began an 18-month test in a Kroger store in Cincinnati. Barcodes were printed on small pieces of adhesive paper, and attached by hand by store employees when they were adding price tags. The code proved to have a serious problem; the printers would sometimes smear ink, rendering the code unreadable in most orientations. However, a linear code, like the one being developed by Woodland at IBM, was printed in the direction of the stripes, so extra ink would simply make the code "taller" while remaining readable. So on 3 April 1973 the IBM UPC was selected as the NAFC standard. IBM had designed five versions of UPC symbology for future industry requirements: UPC A, B, C, D, and E. NCR installed a testbed system at
Marsh's Supermarket in
Troy, Ohio, near the factory that was producing the equipment. On 26 June 1974, a 10-pack of Wrigley's
Juicy Fruit gum was scanned, registering the first commercial use of the UPC. In 1971 an IBM team was assembled for an intensive planning session, threshing out, 12 to 18 hours a day, how the technology would be deployed and operate cohesively across the system, and scheduling a roll-out plan. By 1973, the team were meeting with grocery manufacturers to introduce the symbol that would need to be printed on the packaging or labels of all of their products. There were no cost savings for a grocery to use it, unless at least 70% of the grocery's products had the barcode printed on the product by the manufacturer. IBM projected that 75% would be needed in 1975. Economic studies conducted for the grocery industry committee projected over $40 million in savings to the industry from scanning by the mid-1970s. Those numbers were not achieved in that time-frame and some predicted the demise of barcode scanning. The usefulness of the barcode required the adoption of expensive scanners by a critical mass of retailers while manufacturers simultaneously adopted barcode labels. Neither wanted to move first and results were not promising for the first couple of years, with
Business Week proclaiming "The Supermarket Scanner That Failed" in a 1976 article.
Sims Supermarkets were the first location in Australia to use barcodes, starting in 1979. ==Industrial adoption==