- Email: [email protected]
Point-of-sale terminal systems
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. Preprinted 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.
SECURITY OCR scanners are comparatively new in the UK. By the end of 1977, three or four companies had adopted OCR technology. One company, a Leeds-based TV and Hi-Fi specialist, Vallances, are installing a sophisticated system in their chain of shops. They chose OCR-A scanners because of the complexities of the pricing methods in their retail trade. One of the principal advantages of OCR is its flexibility in dealing with price changes (e.g. markdowns etc.) at store level, and the backup it affords from computer files should labels become damaged or detached from the merchandise. In the electrical-equipment trade many different types of transactions are used, such as discounts, markdowns, special offers, record tokens, returns and exchanges, deposits, repairs, TV tube insurance, and HP and shortterm-credit schemes. Vallances are using OCR scanners to read tags that they produce with an online tag printer, controlled by their computer at headquarters, to record information on every stock item. The main function of this is to control stock, but the system also provides tight
M578q023 >+1q,25
STORENAME
D6 6 7 0 U 3 7
35
PI 6 q 5 > + 1 9 , q 5 D507
LJq8
M2296501 >+35,00 m
D6 6 7 0 U 3 7
35
PI 6q5 > + $ q , q 5
[
h
J ]
J
STORENAME
D507
tJq8
M22q6~502 >+35.00
Figure 3. Sample OCR-A tickets (D-department number, M-merchandise number, P-miscellaneous data, U-class, +-price)
vol 1 no 1 february 78
Figure 4. Polling via PO lines links the retail terminal directly to a central processor security control, which is essential in a trade where it is very easy for stock to 'go missing', especially when items are out on trial or hire purchase. Details of all goods are entered into the mainframe computer on delivery, and a tag is automatically printed that is attached to each item before distribution to each store. The OCR tags are then read by the store scanners, which record the alpha description of the item, the stock number, and the type of transaction, and store the information, via the NCR 280, on cassette. This cassette-captured data is processed and matched to the original information held on file in the computer.
RETAIL POLLING For larger chains of stores that have their own central computer, accumulating all the cassette-captured data for central processing can be a time-consuming exercise. One electrical discount multiple has overcome this problem by using a polled system to centralize data from over 150 branches on a daily basis. Point-of-sale 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 linked via a cassette recorder to a pollable cassette concentrator (NCR 751) (Figure 4). The 751 is located at store level. A minicomputer (in this case, an NCR 725) using MLR (multiline receiving) software dials up each 250 terminal via a modem, and each 751 concentrator in a predetermined rotating sequence, using auto/dial switched PO lines at night during off-peak periods. Up to eight telephone lines can be used simultaneously, operating at 600 or 1 200 bit/s. The information received is recorded on 7- or 9-channel N RZ tape. As each store ends transmission, the MLR software automatically 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 business transacted during the day. The accumulated data is subsequently processed and analysed by a mainframe computer.
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 any sales counter in any store. Shoppers are able to purchase or change goods from any department at any terminal in the store, promoting a smoother crossflow of store traffic and eliminating the frustrations associated with departmental buying. Customers are also able to make payments to their credit account through any terminal, automatically updating the central computer master file. Each 280 retail terminal processes customer transactions at the point of sale. With a creditauthorization-enquiry software module, the terminal transmits a credit or cheque authorization message to the 725. The 725 either authorizes the request or transmits it for referral to the central computer. The computer checks the credit rating, and sends the response back through the 725 to the POS terminal (Figure 5). In that way, the 725 becomes not only an authorizer, but also a message router for the credit-authorization-function system operation. A sales assistant records a transaction on the terminal, transmitting the account number, type of sale and 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.
Figure 6. NCR 2151 retail terminals recently installed in the Army & Navy's store in Victoria Street, London A response code is sent to the terminal, instructing the sales assistant to go ahead with the transaction (if the customer is credit-worthy) or not. In most cases, the 725 authorizes credit when feasible and responds so rapidly that the customer is unaware that his or her credit rating is being checked. A feature of the system is the capacity to set up a file never to refuse credit to preferred customers. The system reduces personnel costs (less supervisors are necessary), personal intervention being needed only in certain instances. It improves customer service - the authorization of a personal account is a byproduct of recording the transaction, and the customer does not have to wait to have his creditability verified. The system can also be tailored to a store's own credit system. A total computer system reduces fraud, whether by employees or customers, reduces bad debts, and the expenses incurred by the retrieving of these, and monitors customers' credit limits.
COMPUTERS A N D THE PUBLIC
7867 OCRA reader
t e r m i n a l ~
Retailstore Distr bution J ~J 725 network centre ~ controller Consolidofed / ~ L 9 channelNRZ / I~1 I ~ - ~ - ~ ] T ~ _ - - ---) 644 OCRA tapeb a c k u p / J ~,~ ~ ticketprinter
...................................................~
....
Central
processor
Figure 5. Electronic sales terminal system with concentrated data capture, automatic reading of OCR-A tags and automatic consolidation of date at the distribution centre
28
The most recent department-store retail terminal to be developed by NCR, the NCR 2151 (Figure 6), brings the computer to the public, as it is itself a 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 small physical area. The terminal incorporates a 48k random-access memory, and can act as a relatively powerful processor. Additional memory makes it possible to process many more types of transactions and applications than previous generations of terminals could. The software architecture includes the application virtual machine (AVM) and a software virtual machine (SVM). The AVM consists of applicationorientated software modules written in a high-level field-manipulation language. The SVM consists of the software modules that are written in the assembly language of the microprocessor. As well as a microprocessor, it has a memory and a communications interface. Unlike previous terminals, the 2151 uses read/write memory rather than read-only memory (RAM), which means that a retailer can make programming changes via the keyboard, eliminating the need for
computer communications
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 available. Peripherals include disc systems (from 200Mbyte 3330 compatible units down to floppy discs), multiple printer options, cassette units, I/0 writers, magnetictape storage and VDUs. The 2151 can be used with an OCR reader, and can also be fitted with a cassette datacapture 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.
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
Bromle¥
9-track NRZ800 tape unit L. I unit I
I
I /
605 processor 64K memory•
6440 matri printerx •
Dual unit I 260 I/O - writer thermal printers,
synchronous ~ concentrator J
cassette
modem
I
Chichester
[, -ID ,dem I~
~
K
e
n
s
i
n
p
FAId_~__ersh.__oot_ Camberiey
g
II
t
o
ff
n
,51-600 concentrator synchronous I
~
Maidstone
,5,-6oo I synchronous I
concentrator ~
Westmi nster I I
' ScTyo5~lrOhl°aL crtr~ Seo60
] ~to r~
I
I
|junct,on| pox I ln:t,onl
I
'-:'-] I ;'1~'
po
I
Eastbourne
modem ~
II ;1161I E
I
Fq
I
I 11750 1 ti°nll t°1
synchronous concentrator
I
L
Figure 7. Hardware configuration for the Army & Navy group
vol I no I february 78
29
ONLINE SUPERMARKET
SYSTEM
Adapters
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 Receipts[ ~
;::3]
~Office ~
~
Reports . ~ [ ~
Reports
Controe lr
Figure 8. Typical 255 report utilization
30
Interrupt
Foreground initiate (FGINIT)
ser~ce routine ([SR)
System -interchangeable executive (six)
Backgrc,Jnd initiate -- (BGINIT) Interval
Input data controller
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 slotscanning 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 hourby-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 errorcorrect key or the clear bar. The central processor can be programmed to make the terminal print a slip as a hardcopy 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 dutyfree centre at Amsterdam's Schiphol Airport
vol I no I february 78
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
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 would carry an identification code. Each food retailer, wholesaler and manufacturer in the food-distribution industry would have his own unique code. The benefits of such a system would be far-reaching. The US food industry has agreed on a uniform code (the UPC). Almost all packaged and tinned goods in the USA already carry this code. With the UPC system, the first group of numbers represents the manufacturer, and the last group the product and size. The European food industry has now agreed on a universal code for Europe. This was evolved from the UPC, with the addition of a code denoting the country of origin, and is known as EAN (European Article Numbering). The product code is a numbering system that assigns a unique number to every product currently in distribution. The growth capacity provides for codes having up to 30 characters. Vertical bars and spaces make up the UPC or EAN scannable symbol, and the corresponding humanreadable characters are OCR-B optical-font characters (Figure 12). The symbol can be read by electronic scanning devices. The code only identifies the manufacturer and product; it does not contain the price either in code or human-readable characters (the prices are displayed on the shelves). The slot scanner, a laser-beam device incorporated into the checkout belt, 'reads' the product code. Slot scanning takes the place of ringing up food items in the manual method. As the checker moves each symbolmarked item across the scanning slot, the NCR 782 scanner emits light that reflects off the UPC symbol. This reflected light is read optically and transmitted as an electrical impulse to an instore NCR 726 minicomputer/processor. The processor looks up the price from a peripheral disc memory unit, updates the control totals and transmits information to the checker's 255 terminal. Irrespective of the alignment of the symbol as the checker moves it across the viewing slot, the NCR 782 reads the printed code. As the scanner reads the symbol, the price is flashed on a digital display panel. In addition to printing the price and product description on the customer's receipt, the 255 departmentalizes the item, selects the correct taxable total (where necessary) and computes any change in the price (for a split package, for example). It is not expected that laser-beam slot scanners will be in common use in the very near future, as, to make their use economically viable, supermarket executives consider that at least 75% of a supermarket's goods must be coded. The first stores to use scanning extensively are likely to be multiples carrying their own branded goods. The first European scanning system was installed at the beginning of 1977 by Irma, a Danish supermarket chain with 180 outlets. 95% of the 7000 items stocked carry their own
32
5 Figure 12. EAN bar code (the symbol can be read by a light pen or other electronic scanning devices) trademark. 40% of the items are manufactured or packed by Irma. The Irma scanning installation demonstrates that scanning need not depend on a universal product code. Albert Heijn, in Holland, introduced slot scanning in May 1977, on an experimental basis.
F I N A N C I A L A D V A N T A G E S OF SLOT SCANNING The estimated financial benefits of converting to slot scanning are, according to McKinsey & Co. Inc., as follows:
'Hard' savings Front-end labour Price marking Misringing Front-end administration
0.27% 0.37% 0.10% 0.08%
of of of of
sales sales sales sales
0.82% of sales
'Soft' savings Sales increase, merchandizing Shrinkage reduction Labour scheduling Ordering, checking, warehouse administration
0.58% of sales 0.27% of sales 0.23% of sales 0.29% of sales 1.37% of sales
Although these figures are theoretical, they have not yet been refuted.
CONCLUSIONS With marketing methods becoming more sophisticated, and competition more intense, stores and supermarkets will increasingly turn to computerized POS systems to provide them with the accurate and up-to-date information necessary for them to maintain their profits and stay in business.
BIBLIOGRAPHY Evaluating the feasibility of SPNS (Standard Applied Numbering System) in the UK McKinsey & Co. Inc. (1974)
computer communications
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. Preprinted 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.
SECURITY OCR scanners are comparatively new in the UK. By the end of 1977, three or four companies had adopted OCR technology. One company, a Leeds-based TV and Hi-Fi specialist, Vallances, are installing a sophisticated system in their chain of shops. They chose OCR-A scanners because of the complexities of the pricing methods in their retail trade. One of the principal advantages of OCR is its flexibility in dealing with price changes (e.g. markdowns etc.) at store level, and the backup it affords from computer files should labels become damaged or detached from the merchandise. In the electrical-equipment trade many different types of transactions are used, such as discounts, markdowns, special offers, record tokens, returns and exchanges, deposits, repairs, TV tube insurance, and HP and shortterm-credit schemes. Vallances are using OCR scanners to read tags that they produce with an online tag printer, controlled by their computer at headquarters, to record information on every stock item. The main function of this is to control stock, but the system also provides tight
M578q023 >+1q,25
STORENAME
D6 6 7 0 U 3 7
35
PI 6 q 5 > + 1 9 , q 5 D507
LJq8
M2296501 >+35,00 m
D6 6 7 0 U 3 7
35
PI 6q5 > + $ q , q 5
[
h
J ]
J
STORENAME
D507
tJq8
M22q6~502 >+35.00
Figure 3. Sample OCR-A tickets (D-department number, M-merchandise number, P-miscellaneous data, U-class, +-price)
vol 1 no 1 february 78
Figure 4. Polling via PO lines links the retail terminal directly to a central processor security control, which is essential in a trade where it is very easy for stock to 'go missing', especially when items are out on trial or hire purchase. Details of all goods are entered into the mainframe computer on delivery, and a tag is automatically printed that is attached to each item before distribution to each store. The OCR tags are then read by the store scanners, which record the alpha description of the item, the stock number, and the type of transaction, and store the information, via the NCR 280, on cassette. This cassette-captured data is processed and matched to the original information held on file in the computer.
RETAIL POLLING For larger chains of stores that have their own central computer, accumulating all the cassette-captured data for central processing can be a time-consuming exercise. One electrical discount multiple has overcome this problem by using a polled system to centralize data from over 150 branches on a daily basis. Point-of-sale 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 linked via a cassette recorder to a pollable cassette concentrator (NCR 751) (Figure 4). The 751 is located at store level. A minicomputer (in this case, an NCR 725) using MLR (multiline receiving) software dials up each 250 terminal via a modem, and each 751 concentrator in a predetermined rotating sequence, using auto/dial switched PO lines at night during off-peak periods. Up to eight telephone lines can be used simultaneously, operating at 600 or 1 200 bit/s. The information received is recorded on 7- or 9-channel N RZ tape. As each store ends transmission, the MLR software automatically 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 business transacted during the day. The accumulated data is subsequently processed and analysed by a mainframe computer.
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 any sales counter in any store. Shoppers are able to purchase or change goods from any department at any terminal in the store, promoting a smoother crossflow of store traffic and eliminating the frustrations associated with departmental buying. Customers are also able to make payments to their credit account through any terminal, automatically updating the central computer master file. Each 280 retail terminal processes customer transactions at the point of sale. With a creditauthorization-enquiry software module, the terminal transmits a credit or cheque authorization message to the 725. The 725 either authorizes the request or transmits it for referral to the central computer. The computer checks the credit rating, and sends the response back through the 725 to the POS terminal (Figure 5). In that way, the 725 becomes not only an authorizer, but also a message router for the credit-authorization-function system operation. A sales assistant records a transaction on the terminal, transmitting the account number, type of sale and 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.
Figure 6. NCR 2151 retail terminals recently installed in the Army & Navy's store in Victoria Street, London A response code is sent to the terminal, instructing the sales assistant to go ahead with the transaction (if the customer is credit-worthy) or not. In most cases, the 725 authorizes credit when feasible and responds so rapidly that the customer is unaware that his or her credit rating is being checked. A feature of the system is the capacity to set up a file never to refuse credit to preferred customers. The system reduces personnel costs (less supervisors are necessary), personal intervention being needed only in certain instances. It improves customer service - the authorization of a personal account is a byproduct of recording the transaction, and the customer does not have to wait to have his creditability verified. The system can also be tailored to a store's own credit system. A total computer system reduces fraud, whether by employees or customers, reduces bad debts, and the expenses incurred by the retrieving of these, and monitors customers' credit limits.
COMPUTERS A N D THE PUBLIC
7867 OCRA reader
t e r m i n a l ~
Retailstore Distr bution J ~J 725 network centre ~ controller Consolidofed / ~ L 9 channelNRZ / I~1 I ~ - ~ - ~ ] T ~ _ - - ---) 644 OCRA tapeb a c k u p / J ~,~ ~ ticketprinter
...................................................~
....
Central
processor
Figure 5. Electronic sales terminal system with concentrated data capture, automatic reading of OCR-A tags and automatic consolidation of date at the distribution centre
28
The most recent department-store retail terminal to be developed by NCR, the NCR 2151 (Figure 6), brings the computer to the public, as it is itself a 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 small physical area. The terminal incorporates a 48k random-access memory, and can act as a relatively powerful processor. Additional memory makes it possible to process many more types of transactions and applications than previous generations of terminals could. The software architecture includes the application virtual machine (AVM) and a software virtual machine (SVM). The AVM consists of applicationorientated software modules written in a high-level field-manipulation language. The SVM consists of the software modules that are written in the assembly language of the microprocessor. As well as a microprocessor, it has a memory and a communications interface. Unlike previous terminals, the 2151 uses read/write memory rather than read-only memory (RAM), which means that a retailer can make programming changes via the keyboard, eliminating the need for
computer communications
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 available. Peripherals include disc systems (from 200Mbyte 3330 compatible units down to floppy discs), multiple printer options, cassette units, I/0 writers, magnetictape storage and VDUs. The 2151 can be used with an OCR reader, and can also be fitted with a cassette datacapture 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.
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
Bromle¥
9-track NRZ800 tape unit L. I unit I
I
I /
605 processor 64K memory•
6440 matri printerx •
Dual unit I 260 I/O - writer thermal printers,
synchronous ~ concentrator J
cassette
modem
I
Chichester
[, -ID ,dem I~
~
K
e
n
s
i
n
p
FAId_~__ersh.__oot_ Camberiey
g
II
t
o
ff
n
,51-600 concentrator synchronous I
~
Maidstone
,5,-6oo I synchronous I
concentrator ~
Westmi nster I I
' ScTyo5~lrOhl°aL crtr~ Seo60
] ~to r~
I
I
|junct,on| pox I ln:t,onl
I
'-:'-] I ;'1~'
po
I
Eastbourne
modem ~
II ;1161I E
I
Fq
I
I 11750 1 ti°nll t°1
synchronous concentrator
I
L
Figure 7. Hardware configuration for the Army & Navy group
vol I no I february 78
29
ONLINE SUPERMARKET
SYSTEM
Adapters
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 Receipts[ ~
;::3]
~Office ~
~
Reports . ~ [ ~
Reports
Controe lr
Figure 8. Typical 255 report utilization
30
Interrupt
Foreground initiate (FGINIT)
ser~ce routine ([SR)
System -interchangeable executive (six)
Backgrc,Jnd initiate -- (BGINIT) Interval
Input data controller
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 slotscanning 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 hourby-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 errorcorrect key or the clear bar. The central processor can be programmed to make the terminal print a slip as a hardcopy 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 dutyfree centre at Amsterdam's Schiphol Airport
vol I no I february 78
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
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 would carry an identification code. Each food retailer, wholesaler and manufacturer in the food-distribution industry would have his own unique code. The benefits of such a system would be far-reaching. The US food industry has agreed on a uniform code (the UPC). Almost all packaged and tinned goods in the USA already carry this code. With the UPC system, the first group of numbers represents the manufacturer, and the last group the product and size. The European food industry has now agreed on a universal code for Europe. This was evolved from the UPC, with the addition of a code denoting the country of origin, and is known as EAN (European Article Numbering). The product code is a numbering system that assigns a unique number to every product currently in distribution. The growth capacity provides for codes having up to 30 characters. Vertical bars and spaces make up the UPC or EAN scannable symbol, and the corresponding humanreadable characters are OCR-B optical-font characters (Figure 12). The symbol can be read by electronic scanning devices. The code only identifies the manufacturer and product; it does not contain the price either in code or human-readable characters (the prices are displayed on the shelves). The slot scanner, a laser-beam device incorporated into the checkout belt, 'reads' the product code. Slot scanning takes the place of ringing up food items in the manual method. As the checker moves each symbolmarked item across the scanning slot, the NCR 782 scanner emits light that reflects off the UPC symbol. This reflected light is read optically and transmitted as an electrical impulse to an instore NCR 726 minicomputer/processor. The processor looks up the price from a peripheral disc memory unit, updates the control totals and transmits information to the checker's 255 terminal. Irrespective of the alignment of the symbol as the checker moves it across the viewing slot, the NCR 782 reads the printed code. As the scanner reads the symbol, the price is flashed on a digital display panel. In addition to printing the price and product description on the customer's receipt, the 255 departmentalizes the item, selects the correct taxable total (where necessary) and computes any change in the price (for a split package, for example). It is not expected that laser-beam slot scanners will be in common use in the very near future, as, to make their use economically viable, supermarket executives consider that at least 75% of a supermarket's goods must be coded. The first stores to use scanning extensively are likely to be multiples carrying their own branded goods. The first European scanning system was installed at the beginning of 1977 by Irma, a Danish supermarket chain with 180 outlets. 95% of the 7000 items stocked carry their own
32
5 Figure 12. EAN bar code (the symbol can be read by a light pen or other electronic scanning devices) trademark. 40% of the items are manufactured or packed by Irma. The Irma scanning installation demonstrates that scanning need not depend on a universal product code. Albert Heijn, in Holland, introduced slot scanning in May 1977, on an experimental basis.
F I N A N C I A L A D V A N T A G E S OF SLOT SCANNING The estimated financial benefits of converting to slot scanning are, according to McKinsey & Co. Inc., as follows:
'Hard' savings Front-end labour Price marking Misringing Front-end administration
0.27% 0.37% 0.10% 0.08%
of of of of
sales sales sales sales
0.82% of sales
'Soft' savings Sales increase, merchandizing Shrinkage reduction Labour scheduling Ordering, checking, warehouse administration
0.58% of sales 0.27% of sales 0.23% of sales 0.29% of sales 1.37% of sales
Although these figures are theoretical, they have not yet been refuted.
CONCLUSIONS With marketing methods becoming more sophisticated, and competition more intense, stores and supermarkets will increasingly turn to computerized POS systems to provide them with the accurate and up-to-date information necessary for them to maintain their profits and stay in business.
BIBLIOGRAPHY Evaluating the feasibility of SPNS (Standard Applied Numbering System) in the UK McKinsey & Co. Inc. (1974)
computer communications