The idea of the barcode originated in the 1930s with a thesis paper written by Wallace Flint, a Harvard business student. He invented the "automated grocery system" using punch cards and flow racks, which automatically dispensed products. His master's thesis was a system in which a customer would choose punch hole cards where each card represented a product in the store. His idea did not catch on.
The modern day barcode dates back to 1949, and was developed by Norman Joseph Woodland, a graduate student and teacher at the Drexel Institute of Technology. Fellow student, Bernard Silver, informed Woodland about the university conducting research on an automated system to receive product info at the check out. The Morse code repeatedly came to Woodland's mind and he reasoned that if dots and dashes had been used to communicate information electronically, there must be a way to electronically communicate the information of a grocery product. He drew dots and dashes simulating Morse code, and he extended the lines downward. His drawings resulted in a concession of thin lines from dashes, and thicker lines from the dots.
Woodland and Silver quit school in 1948, and dedicated themselves to the research begun by Wallace. They proceeded to invent the first true barcode system based on two already invented technologies, that of David Morse (telegraphy) and Lee De Forest (movie soundtrack system). On October 20, 1949, Woodland and Silver filed a patent for a "Classifying Apparatus and Method". They finally had a breakthrough in which they were able to hook an oscilloscope to a sensitive RCA tube, and by moving the barcode side to side, images were created on the oscilloscope's dial. This discovery marked the first machine ever capable of reading printed material. Employed by IBM in 1952, Woodland asked IBM to purchase the patent as to get proper funding, but it refused, and the patent was instead purchased by RCA.
The railway system of the United States during the 1960s was complex. Freight cars were often exchanged between railroad companies and keeping track of the cars was almost impossible. David J. Collins, a MIT graduate, began to address the problem of freight cars while employed at the Sylvania Company. The ideal solution would involve having each freight car labeled with a code to identify it, which could also be read electronically. Collins proceeded to develop a modified version of the Woodland-Silver barcode, using different colours of phosphorescent ink that could be read by light, the source of which came from the recently invented laser beam technology. One of the most important features of the laser beam proved to be its error correction feature: able to swipe a code hundreds of times per second, and also read scratched or stained codes. Collins' system for freight trains was a success; he proceeded to ask the Sylvania Company for funding to research a similar system for grocery products. They refused, and Collins quit to begin his own business.
Collins had found a practical use for Woodland and Silver's idea. The patent for their idea was still owned by RCA and it began a research project in the early '70s aimed at the grocery industry. The engineers in this project needed a system capable of reading barcodes from various distances and at any angle. Also, they wanted a system capable of paying for its cost within two and a half years. The storeowners they approached were hesitant about the initial capital investment required to install the equipment. In hopes of presenting a more appealing system to potential buyers, RCA redesigned the straight-line system into a system of circles, named the "bulls-eye code." Hearing of RCA's research, IBM asked Woodland, who was still employed by them, to continue researching the straight-line design he had abandoned in 1950. By this time, Silver had passed away. IBM engineer, George J. Laurer, completed the final version. On April 3, 1973, the IBM straight-line design was chosen by the grocery store industry, and later named the Universal Product Code or UPC. As the UPC grew in popularity, it became obvious that it would be beneficial for all types of businesses. The peak of its success came in 1981, when the U.S. Army began using it to label their equipment. Today, Federal Express is the world's largest user of the barcode.
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