- A report from Avery Dennison and Forbes Insights indicates global food waste and supply chain problems can be addressed with RFID and similar technologies
- Consumer engagement, sustainability, supply chain efficiency, food waste reduction are all global targets for what Avery Dennison calls a bridge between digital and physical worlds
The intersection of physical and digital worlds is a supply chain trend that businesses should be preparing for, according to a report released by Avery Dennison. The technology company worked with research wing of Forbes, Forbes Insights, to create what it calls “Bridging the Divide: How Connecting Physical and Digital Worlds Will Define Enterprise Solutions to the Next Decade’s Challenges.”
Avery Dennison is looking at widescale challenges ahead – from food waste to sustainability in the supply chain overall — and seeing commonality in the potential solutions. The insights is built on the technology company’s stated commitment to innovate in an effort to “go beyond what’s been done before, and to create value for businesses, people and planet,” said Julie Vargas, Avery Dennison’s VP and general manager of identification solutions.
The report leverages the opinions from Avery Dennison’s customers as well as observation of evolving market trends, she said.
Numerous Challenges
Companies that use Avery Dennison technology indicated they are grappling with pressures on numerous fronts. One is heightened consumer demand for transparency and sustainability. In this effort, brands and retailers are seeking ways to better optimize their supply chains and to reduce waste while improving efficiency.
At the same time, they’re seeking ways to forge deeper connections with their consumers in an increasingly digital world. As a result, there is need for more holistic, integrated approaches to problem-solving, said Vargas.
“We’re at a critical juncture where the confluence of digital transformation, sustainability imperatives, and supply chain complexities are reshaping industries across the board,” said Vargas.
Challenges to Address Include Food Waste
One of the primary challenges highlighted by the report is food waste—it pointed to 1.05 billion metric-tons of food being wasted worldwide each year. Wasted food also accounts for eight to 10 percent of global greenhouse gas emissions, according to the report.
Even though she was already anticipating that measured food waste volume would be high, Vargas said, “the statistic regarding the volumes of food waste is startling. The idea that an estimated fifth of global food supply is wasted, equal to nearly 1.05 billion tonnes, really hits home on the importance of tackling that issue.”
With acceleration of digital transformations already underway across numerous industries, this has opened up new possibilities for innovation, she added. “The concept of giving physical products a digital identity—something we’ve been pioneering at Avery Dennison—is more relevant than ever.”
Digital Identity and Supply Chain Efficiency
In examining numerous challenges for the supply chain, the insights brief recommends that every physical product should have a digital twin, which can bring a view into consumer goods, apparel as well as food.
RFID is a key enabler of this vision, said Vargas. By embedding RFID technology in products, the unique ID encoded on each RFID tag links to product information that can be updated automatically and tracked and interacted with digitally.
The report looked at supply chain efficiency—an area that can also be benefitted by use of RFID data. “We’re seeing RFID make significant impacts in logistics and supply chain management,” Vargas said.
The report points to UPS‘s Smart Package Smart Facility initiative. By using RFID-enabled labels, the logistics giant has said it is reducing sorting and delivery mistakes, optimizing routes and improving overall efficiency.
Leveraging Consumer Engagement
Some solutions will rely on hybrid technology deployments to enhance consumer engagement. To link supply chain data with consumer engagement, Avery Dennison finds that a hybrid technology approach may combine RFID with NFC or QR codes to enhance consumer connections.
“We see these as complementary technologies, with their own unique strengths and qualities. RFID excels in inventory and supply chain management, while NFC and QR codes are consumer facing, allowing for direct interaction leveraging the same unique information as the RFID tag,” said Vargas. Companies can then create a bridge between back-end operations and front-end consumer engagement.
Because QR codes or NFC tags (unlike RFID) can be accessed with a smartphone, they offer an opportunity to connect with shoppers. The company provided a case study of the NBA’s Sacramento Kings using Avery Dennison’s atma.io connected product cloud, with QR codes, to allow users to access personalized experiences and unique content and information about a shirt and the team.
Looking ahead, Vargas added, “we anticipate RFID technology will become even more ubiquitous and sophisticated, driving more intelligent decision-making in supply chains and retail models.” This will help advance transparency to support circular economy initiatives, and creating richer consumer experiences.
Food Waste Reduction
When it comes to food waste, Avery Dennison is already working with UK food service distributors like Reynolds using RFID-enabled reusable containers to improve visibility in logistics as well as help restaurants better manage their inventory and reduce over-ordering.
“This application is particularly interesting because it tackles both sustainability and efficiency challenges simultaneously,” Vargas pointed out.
Another way to link supply chain traceability from the farm to the dinner table is leveraging a QR code as well as RFID tag, so that supply chain information is accessible to businesses, with RFID, and available to consumers via their phones.
Beyond identification, temperature monitoring in cold chains can be accomplished with sensor-based “smart tags” to provide real-time alerts if temperatures deviate from the required range. That, Vargas pointed out, can potentially preventing spoilage and ensuring food safety.
Sustainability and Circular Economy
In addition to addressing food waste, technology is offering solutions related to the circular economy demands in apparel. Avery Dennison is working with apparel brands such as Swiss-based sustainable performance wear brand Swijin to create a digital identity for each of their SwimRunner garments, using QR codes only. Consumers can access data about each garment by scanning the label.
“This system has significantly increased the number of garments that are properly recycled or resold, reducing waste in the fashion industry,” said Vargas.
She offered an appeal to others to join efforts at digitizing supply chains to solve sustainability and waste issues. “As a business, we have a role to play in helping solve some of the world’s most complex challenges, however we can’t do it on our own. It is our hope that this insights brief inspires collective action to help move the dial on these challenges.”