Smart reusable packaging solutions are immediately available to illuminate and optimize resilient supply chains and to facilitate daunting challenges of COVID-19 business swings and vaccine distribution.
COVID-19 has been referred to as a black swan event. A black swan is an unpredictable turn of events that is beyond the expected and has potentially severe consequences. These occurrences are characterized by their severe impact and extreme rarity. To be certain, the pandemic has disrupted global supply chains on an unprecedented scale.
As a Harvard Business Review article recently noted, “The supply shock that started in China in February and the demand shock that followed as the global economy shut down exposed vulnerabilities in the production strategies and supply chains of firms just about everywhere.” According to reports, over 90 percent of Fortune 1000 companies have tier 2 suppliers in the regions of China that were most affected by the initial phase of the global COVID-19 pandemic.
Black swan events pierce barriers to adoption
Black swan events can play a crucial role in nudging decision-makers toward embracing already available technologies. Such was the case with the shipping pallet and forklift, another pair of technologies that only rose to the forefront after a previous black swan event – the outbreak of World War 2. While forklift and pallet usage had already been refined in the 1930s, it was only the outbreak of war in the 1940s with ensuing staffing shortages and urgency for material handling efficiencies that the dire consequences of not adopting new technologies became glaringly obvious. With that recognition, the pendulum finally swung toward widespread adoption.
Fast forward to 2020, and the COVID-19 event is now proving to be a powerful motivator in its own right. The acceptance of already available technologies such as IoT-enabled reusable packaging solutions can provide the supply chain visibility needed in resilient supply chains. According to one industry insider, the COVID-19 pandemic has accelerated the digital transformation by 16 to 18 months.
In its COVID-19 and shattered supply chains white paper, IBM observes the obvious. “COVID-19 has driven home the need to strengthen global supply chain networks,” it states. “Supply chains should be dynamic, responsive, and interconnected to an organization’s ecosystem and processes. This requires end-to-end visibility, real-time insights, and decisive actions—particularly in escalating situations.”
Many Reusable Packaging Association members offer solutions that provide visibility and real-time insights. While the range of tracking technologies available can seem daunting, vendors note that quick adoption does not require supply chain participants to have a deep understanding of the various options – only a recognition of their pain points. Let’s take a closer look at some of the challenges arising from COVID-19 and how technology-enabled reusables can make a difference.
Tracking Reusables in Automotive
In the spring of 2020, the automotive industry found it facing plant closures, fractured supply chains, and, in some cases, rapid retooling to produce medical equipment. The legacy of COVID-19 has had a profound impact on automotive supply chains. As more employees have been assigned to work from home, OEMs have been more greatly challenged to provide the typical oversight of materials.
The flows of containers between tier suppliers and assembly plants have also been significantly disrupted, resulting in increased volumes of lost or otherwise unavailable reusables. In the absence of the required reusable packaging, suppliers are forced to use costly expendable packaging. Such emergency measures are costly, and according to one RPA member blog, “have fueled a renewed emphasis on container tracking in recent months.” While the use of GPS and IoT-enabled reusables has already been established in automotive, vendors stress that it has never been easier to deploy. Solution providers offer devices, cloud-based tracking systems, and simple user interfaces that deliver immediate insights without the need to integrate with existing IT.
In the recent RPA panel session, Smart Packaging through a Reusable System, Kevin Davidson of Logistimatics noted that powerful insights can be derived from GPS tagging even a small percentage of containers, enabling stakeholders to identify bottlenecks and sources of loss. Through geofencing, for example, exception reports can identify reusables that travel outside of their expected location. Davidson made the case that the value of a healthy supply chain made possible by GPS and IoT-enabled reusables is an even more compelling business case than the avoidance of container loss. “Any time you have to hit that button that stops the line, that’s costing tens of 1000s of dollars every minute,” he commented.
Food and Beverage
COVID-19 presented challenges that also required a nimble response from the food and beverage sector. Supermarket and e-commerce sectors felt strong demand while the restaurant trade was decimated. Heightened concerns about pallet and container hygiene also surfaced during the early days of the pandemic.
The combination of heavy volume and an influx of new employees, including new delivery drivers, has made the accuracy of deliveries and the management of reusables more challenging. Misplaced reusables are more likely to be missorted or forgotten on trailers during unexpected sales surges. Regarding deliveries, conventional barcode or QR code scanning at the delivery stop does not necessarily mean the product was dropped off at the correct location, Shawn Stockman of Onepak noted in the RPA panel. The use of geofence technology in conjunction with IoT-enabled reusables, however, can verify that the correct order is left at the correct location. Technology-enabled solutions that minimize interaction between a delivery driver and receiving personnel have become increasingly popular during the pandemic – solutions known as “contactless” delivery.
The COVID-19 pandemic has also heightened interest in the cleanliness of contact surfaces, including reusable packaging. As a result, many outlets temporarily banned reusable shopping bags. Easy-to-wash reusable packaging, however, provides a hygienic solution. As Kevin Mazula of RM2 noted in the RPA panel discussion, smart, unique ID reusables can capture their use history, including individual wash events, providing confidence that a particular container is clean for the intended purpose.
Smart Reusables and COVID-19 Vaccine Distribution
The distribution of COVID-19 vaccines marks an unprecedented supply chain event for the widespread distribution of extremely expensive and temperature-sensitive pharmaceuticals. The temperature requirements are daunting. The Pfizer vaccine needs to be kept at minus 70 degrees Celsius, for example, which is colder than winter in Antarctica. The Moderna vaccine needs to be frozen too, but only at minus 20 Celsius, more like a regular freezer.
Several reusable packaging providers offer product and rental solutions that utilize phase change material and dry ice systems that can provide frozen payload protection for several days in sizes ranging from parcel to pallet shippers. Given the urgency for effective and verified distribution, the need for very careful temperature monitoring, and the risk of other events such as theft or terrorism, supply chain visibility, including real-time temperature and location monitoring, will be critical. IoT will help verify delivery. For example, Bluetooth Low Energy (BLE) tags on individual containers can be configured in a hub and spoke configuration on a smart pallet to verify the delivery of individual containers at a particular location.
Logistics pain points have been created or exasperated by COVID-19, a black swan event that has accelerated the adoption of already available technologies. Technology-enabled reusable packaging is available today to help supply chain stakeholders create product visibility and to build healthier supply chains.