BarTek was founded in 1983 by John Stevens. Stevens had previously worked with David Collins, one of the pioneers in bar code applications, in Collin’s company, Computer Identics. Computer Identics had developed the concept of using laser readers to scan simple, two-digit bar codes in assembly line applications. The lasers could read codes from several feet away, and from several different angles, thus eliminating the need for a person to pass a hand-held scanner over each label. Steven’s expertise lay in developing the software to convert the photocell impulses to digital information, while accurately reading a high percentage of wrinkled, damaged or smudged labels. Prior to Steven’s work, such labels were simply rejected, and not read as usable data.
Grocery store scanning, first demonstrated in 1971, had to wait until the Uniform Product Code concept could standardize bar codes across all manufacturers and product suppliers, after which scanning became a viable option. Once uniform product codes, UPCs, were in place, grocery scanning grew exponentially in the early ‘80’s. However, most people remember the early scanners as rather finicky—clerks would often have to pass items over the reader several times and at several angles before the reader would “beep” that the code had been read. Stevens saw this as an opportunity to develop refined software that could decipher signals from multiple angles, and in spite of wrinkled or otherwise damaged labels. BarTek was launched in 1983 in Steven’s basement, and within 6 months, moved to a production facility with 13 employees.
Between 1984 and 1988, BarTek’s sales quadrupled, continuing to concentrate on leading edge hardware, and state-of-the-art software for the grocery business. In 1988, Stevens was approached by the CEO of AMH, Automated Materials Handling, a company that manufactured and installed conveyors for warehouses and assembly plants. AMH had bid on a large, fully automated baggage handling/sorting system for a major airport. However, in tests, their current software was rejecting up to 20% of baggage tags as unreadable because of wrinkling, dirt, smudges, and other damage. BarTek became the supplier of hardware and software for those systems, and in 1995, purchased AMH at the request of the retiring CEO.
In the aftermath of 9/11, BarTek was contacted by several of its airport clients, and asked to help with the problem of matching on-board passengers to loaded luggage. Recognizing the growth opportunities, BarTek moved to a matrixed organization, with product groups broken into Retail and Airport Systems, and shared services for R & D, engineering, IT, manufacturing and operations. Thus, the people in these five areas report directly to the SVP of R&D/Engineering/Manufacturing, and with a dotted line to the SVP, Retail Systems and the SVP, Airport Systems.
BarTek’s corporate headquarters are located in Boston, with software development and manufacturing in a facility 30 miles west of Boston. Materials handling is located in Cleveland, in the conveyor manufacturing complex that came with the AMH purchase. Increasingly, materials handling purchases component parts abroad, including some high-tech components from Germany, and other manufactured components from Mexico, Taiwan and South Korea.
BarTek’s Strategy Today
BarTek’s strategy is evolving. The retail market is quite mature, and the opportunities for higher margin products are diminishing. BarTek has continued to maintain a respectable 34% of this market, but cheaper technology and foreign competition have led to a need to actually decrease prices over the past 3 years. There has been some discussion at the board level (and within the company) that it may make sense to sell and exit the retail market and concentrate on the higher margin Airport Systems opportunities. Stevens has gone on record as strongly opposing such a move—he has stated that, as long as he is CEO, “BarTek will never abandon its roots and core business.”
Airport Systems had been a rapidly growing business as air travel grew in the ‘90’s, and airports upgraded baggage handling systems. In the years since 9/11, the business has taken on something of a “frantic” quality, with almost weekly announcements of pending and closed sales for either new systems or upgrades. Wary of building and hiring to keep up with what might be a short-term boom, Stevens has pushed the organization to add shifts rather than facilities, and utilize overtime and temporary workers rather than adding new, permanent hires. Thus, while business is good, the economic uncertainty associated with the airline industry has made it difficult to predict future sales and growth.