AIDC VARs: Profit From The Growth Of 2-D Symbologies

AIDC VARs trying to increase their sales should take a close look at two-dimensional (2-D) symbology applications. The market for 2-D will grow 40% per year over the next three years, according to Venture Development Corporation (VDC). The growth partially will be fueled by automotive and electronics manufacturers requiring their trading partners to use 2-D symbologies, Venture Development notes. (These types of manufacturer requirements are referred to as "compliance pressures"). VDC (Natick, MA), an automatic identification and data collection technology and consulting firm, recently completed a global study on 2-D symbologies.

VDC's research shows that in recent years, the growth of the two-dimensional symbology market has outpaced the growth of linear bar codes. For example, VDC estimates end-user consumption of linear bar-code equipment/systems grew 16% annually from 1995-97. However, VDC notes that end-user consumption of 2-D equipment/systems grew 25% per year during that same time period.

2-D: Filling A Void Left By Linear
Two industry observers shared their thoughts with Business Systems Magazine (BSM) on how VARs can profit from the recent growth of the market for 2-D symbologies. BSM spoke with Jim Bagley, v.p. of marketing for Metanetics Corp. We also talked with Carl Gerst, marketing manager, 2-D products, for Welch Allyn. Metanetics (Fort Myers, FL) is a manufacturer of two-dimensional imagers. An imager captures the entire "image" of a bar code or symbology. Conversely, a laser scanner emits a laser beam to read codes. Welch Allyn (Skaneateles Falls, NY) manufactures 1-D and 2-D readers. The company has 2,500 employees worldwide.

According to Bagley and Gerst, VARs should target printed circuit board and microprocessor chip manufacturers, as well as small-parts marking applications. These applications require 2-D symbologies because their manufacturers label very minute items, according to Bagley. For example, 2-D symbologies can be as small as one-tenth of an inch high by one-tenth of an inch wide, according to Gerst. In comparison, linear bar codes are typically a couple of inches in length.

Gerst adds, "We initially designed a reader for 10 mil (millimeter) 2-D symbologies, because that's what industry-standards organizations demanded. Now, some circuit board and chip manufacturers need to read symbols as small as 5 mil."

Two-dimensional symbologies are also suited to those applications because they can store more information than 1-D codes, Gerst says. For example, 2-D symbologies can store part numbers, lot numbers and the date and time an item was manufactured. A linear bar code can store either a part number or a lot number, but not both, Gerst adds. (The number of characters in a linear code typically depends on the size of the item being labeled. For example, a 25-character linear bar code would be several inches long. That's fine if the bar code were being applied to the side of the box. However, such a bar code would be far too large for very minute items).

"Storing additional information has become more important," he says. "Historically, bar codes only included an item or part number. Now, manufacturers want to track which machine produced an item, for example. If an item is defective, the manufacturer can pinpoint the malfunctioning machine."

How Should You Be Reacting To 2-D Symbologies?
AIDC VARs and vendors have debated how prominent a role 2-D symbologies will play over the next several years. Some believe 2-D symbologies will all but replace linear codes. Others believe 2-D will be restricted to applications like small-parts marking.

Neither Bagley nor Gerst expect 2-D to totally replace linear. "Many end users don't need to label small items or store high volumes of information in the label," Bagley says.

In addition, Bagley says that in the immediate future, end-user perceptions may hinder the growth of 2-D. Specifically, he says some users believe that using 2-D is more costly than using linear. "In reality, however, there isn't a premium to be paid for 2-D readers and software," Bagley says. For his part, Gerst believes the VAR channel has to go through a learning curve with respect to 2-D. "Users who want to implement a linear bar code solution can go to an unlimited number of VARs. Conversely, many VARs don't possess the same level of expertise for 2-D symbologies."

Indeed, Venture Development noted in its research that "both resellers and end users need significant… education and training in order for the 2-D symbology markets to grow."