Covid-19 has brought supply chains to a tipping point in digitization. As full circle distribution visibility and connectivity becomes business-critical, IoT-enabled reusable packaging is playing an increasingly important role. Today’s supply chains are undergoing a digital transformation, accelerated by business needs evolving from the COVID-19 pandemic. According to a McKinsey study, the pandemic has “pushed companies over the technology tipping point,” accelerating supply chain digitization by three to four years.
Massive supply chain disruptions and customer buying shifts underscore the imperative nature of business agility and responsiveness. However, though COVID-19 may get most of the credit (or blame, depending on your view), costly business disruptions from outside market forces are nothing new. Consider that in 2019 alone, according to McKinsey, 40 separate weather disasters inflicted costs of more than $1 billion per event, and that “the economic toll caused by the most extreme events has been escalating.”
Increasingly, businesses recognize the urgent need for product sourcing and distribution agility made possible by interconnected supply chain operations. Almost two-thirds of manufacturing executives surveyed for a 2018 KPMG report said being agile is “the new currency of business; if we’re too slow, we will be bankrupt.” Connected supply chains can increase their responsiveness by utilizing digital technologies such as the Internet of Things (IoT) and artificial intelligence (AI).
IoT-enabled Reusable Packaging and the Digital Supply Chain
Reusable transport packaging (RTP) is already playing a critical role in supporting connected supply chains. Reusables are durable enough to be equipped with technology devices, designed with specification precision to work seamlessly in automated systems, provide superior product protection and reduce inefficiency and waste—while also offering a host of other benefits. With the addition of IoT technology, RTP becomes the ultimate platform for load, case, and unit-level inventory visibility and data generation in the emerging supply chain. IoT-enabled RTP offers end-to-end, bottom-up visibility of the entire supply chain, both forward and reverse movements, when supported by business and technology models that drive data sharing. This, in turn, enhances network collaboration and breaks down limitations from silos.
As described in detail in the Reusable Packaging Association’s 2019 white paper, A Smarter, Technology-Driven Supply Chain with Reusable Packaging Systems, reusable packaging can be equipped with a variety of IoT technologies to meet the needs of a great many business cases. The white paper provides information about location, condition, and other data that helps operators eliminate inefficiencies, enable effective automation, increase inventory accuracy, support predictive analytics for inventory replenishment, reduce food waste, and enhance the overall customer experience. And because RTP is designed to last for many use cycles, the cost of the IoT sensors can be prorated to provide an affordable cost-per-use basis. Bottom line, cost-effective IoT solutions for RTP are available today.
Some examples of IoT-enabled RTP applications from the RPA white paper include:
- RFID-tagged, fast-moving consumer goods pallets have helped operators improve product visibility in the supply chain and increase truck fill, thereby reducing empty miles and decreasing CO2 emissions by 62%.
- Active RFID-tagged automotive shipping racks have provided better visibility to the OEM, allowing it to reduce shipping rack inventory requirements from 5.8 days of production to 2.7 days.
- A food service distributor used 60,000 disposable cardboard cartons weekly to deliver products to customers at 4,000 delivery points. To help its customers reduce solid waste, it transitioned to reusable crates. After initially experiencing RTP loss problems, it began utilizing a UHF RFID solution that captures data when crates are packed, as well as when they are shipped and returned. As a result, the company reduced its replacement expenditure on reusable crates by $200,000 annually.
- IoT sensor-equipped cable drums provide visibility to cable customers of drum location as well as reporting of how much cable is left on a particular drum to facilitate the return of empty drums and reordering. The solution is estimated to reduce the loss or theft of drums by 90% and improve the cycle time of reusable drums by 25%.
IoT-Enabled Reusable Packaging Use Cases
While the RPA white paper is loaded with success stories involving IoT-enabled RTP, there are many other recent examples of how smart reusables are contributing to digital transformation.
Postal and parcel network achieves visibility through 350,000 IoT-enabled roll containers
Beginning in June 2019, Heliot/Sigfox Germany in cooperation with Deutsche Post/DHL began installing Alps Alpine IoT sensors on roll containers for parcels. The technology has been installed on more than 350,000 containers, helping the operator gain transparency across its international European network and allowing it to improve service quality to customers. IoT-enabled containers have enabled the operator to optimize its processes while reducing the replacement of lost RTP.
Retail floor displays provide promotional analytics to sales decision-makers
CHEP Germany recently announced the availability of IoT sensor-equipped quarter pallets that provide product manufacturers with complete supply chain visibility from plant to distribution center to the retail floor. This functionality allows decision-makers to answer questions such as when promotional displays arrive at the store and how long they remain on display. The sensor generates data based on the movement of displays and creates a full picture of the promotional campaign for manufacturers and retailers.
RFID and NFC enabled reusable e-commerce box provides full customer delivery visibility and secure opening
Reusable packaging continues to find acceptance as an answer to the massive packaging waste problem associated with e-commerce. Pitney Bowes forecasts that parcel volume will most likely double and reach 220-262 billion parcels by 2026, driving e-commerce companies to continually reduce costs and improve customer experience. Several reusable e-commerce packaging solutions are now available. One recently introduced reusable delivery box for e-commerce deliveries features RFID and NFC technologies, along with condition sensors such as temperature and shock. The package features a rechargeable battery with a life estimated at 1,000 trips. Customers can track their packages in near real-time and tap their NFC-enabled smartphone to accept and unlock their box or reject the parcel upon receipt.
Adaptable, IoT-ready reusable packaging that works with existing technology
ORBIS works with its customers to ensure their packaging is IoT-enabled if the customer is using IoT in their operations. Using a 4 step approach. 1) ORBIS collaborates with customers and vendors to identify the right IoT device options (RFID, BLE, GPS, etc.); 2) Identifies proper location and attachment on the packaging; 3) Conducts quality and validation checks and 4) Provides data to the customer’s tracking system, indicating that their IOT enabled packaging is ready to be tracked. ORBIS considers IoT in the new product development process, with one recent example of the new Odyssey Pallet which offers features to accommodate different IoT devices.
As the digital transformation reaches the tipping point, watch for IoT-enhanced RTP to play an increasing role in lighting up supply chains and providing the efficiencies and agility needed to deliver a smarter product to customers reliably.