Dealers adopt common bar code standards.

* DEALERS ADOPT COMMON BAR CODE STANDARDS Within the next few weeks, a consortium of distributors and dealer chains plans to issue a polite but firm ultimatum to the software industry: Adopt an industry-wide bar-coding system by next July, or expect to get a cold shoulder from the biggest players in the reseller channel.

That message is the result of a two-year effort by the Association of Better Computer Dealers (ABCD), a reseller consortium whose members include Ingram/Micro D, Merisel, Kenfil, Egghead, and most major chains. The ABCD sees bar coding as the way to reduce handling costs and error rates for the thousands of SKUs its members handle; the group has even budgeted $750,000 of its own money to promote a common bar code standard, based on the so-called "Code 39" system already in wide use among electronics and computer hardware manufacturers.

So far, the ABCD's members have been reluctant to talk openly about how they'll treat publishers who ignore the group's July deadline. But Kenfil--which claims that 60% of its products already carry bar codes--says that it expects to impose extra handling charges on uncooperative vendors. At very least, distributors say, they simply won't stock new or marginal packages that lack standard bar codes.

For most publishers, the transition should be relatively painless; the ABCD's Code 39 format merely replaces a hodge-podge of private coding formats with one specification that virtually all resellers will use. Code 39 bar codes will provide machine-readable data on each package about the product's SKU, hardware platform, disk media, and version number. In addition, the ABCD has established detailed guidelines for bar code labels on shipping cartons and pallets.

The ABCD says it will also adopt (or at least accept) a second bar code standard, the UPC system currently in use among mass merchandisers and grocery chains. Two years ago, the Software Publishers Association endorsed UPC codes as an industry standard, and the ABCD consortium says that reading both formats isn't a problem for the scanning devices its members use. But the ABCD clearly prefers its own Code 39 system, chiefly because UPC codes don't provide adequate information about hardware requirements or version numbers, and because the current UPC specification offers no consistent way to identify shipping cartons.

Despite the ABCD's preference for Code 39, however, many mass merchandisers--a major channel for consumer software--have already standardized on UPC codes. As a result, publishers may end up having to print two sets of bar codes on their boxes, especially for products that sell outside traditional computer and software dealer channels.

Within traditional software channels, however, Code 39 has a critical edge: It enables dealers to track every item of inventory by serial number, and thus to monitor the status of products all the way from the loading dock to the cash register, and even build systems that will capture customer names for upgrades and other post-sale services.

That kind of automation should help dealers clean up their often-chaotic back room operations--but it also lays the groundwork for a fairly drastic change in how publishers deal with their own sales pipeline. Right now, the dealer channel is a dark cave: Products go in one end and vanish from sight until warranty cards begin to trickle back, weeks or months later. Eventually, the real promise of industry-wide bar coding is that publishers will be able to acquire data about inventory levels and sales rates literally on a store-by-store basis. Instead of relying on guesswork, sales managers will be able to create accurate production forecasts and get real-time feedback about the impact of individual marketing promotions.

That's a lot to expect from something as modest as a new bar code standard, of course. But the reseller channel is dead serious about building decent inventory systems. If dealers and distributors open up these inventory tracking systems to publishers--and we suspect they will--the whole distribution process may undergo a surprisingly rapid change for the better.