Smart Packaging Fights Supply Chain Complexity

By Milton Froiman

RFID tags or serialized codes digitally printed in boxes make logistic processes more reliable and efficient, saving money and making things less complex.

Earth's diameter at its widest is 7,917 miles, with its circumference being 24,901 miles. Diced pears from Dole, picked in Argentina and processed in Thailand, travel 19,000 miles before reaching their market in the United States. That is a whopping 76 percent of the Earth's circumference at its widest. Argentina and the United States are only 5,600 miles apart, yet these pears travel twice over the Pacific while en route to a neighboring continent. On average, U.S. citizens' meals travel 1,500 miles before reaching their plates.

As globalization enables supply chain optimization for minimal costs, it is cheaper to ship pears to Thailand for processing rather than have them processed within Argentina and shipped directly to the United States. One might ask, "How complex can a supply chain be?" The answer will always be, "Quite complex." This complexity can be combatted with smart packaging technologies, such as radio frequency identification (RFID) and digital printing, using serialized QR codes or watermarks. The idea is to create a smart supply chain, a high-technological version of the entire logistics process.

Milton FroimanIf smart packaging is viewed only from a marketing standpoint, the impression is based only on the great new features that appear every day to make the user experience more immersive and personalized. In this context, smart packaging adds a high value to the brand—which is great, because it enables consumers to interact directly with manufacturers. However, this is not the end point.

Smart packaging technologies can bring more efficiency to supply chains anywhere. Thousands—millions—of companies worldwide are using such technologies to make the right products arrive safe and sound to their buyers, which could be huge companies or a single end consumer. With RFID tags or serialized codes digitally printed in boxes, the logistics process become more reliable and efficient, saving money due to a reduction in human errors and making it slightly less complex—and, of course, allowing closer contact with buyers, even if they are on the other side of the planet.

Let's consider that someone might contest this, stating: "The codes used on technological resources must be standardized to make it all work in a global supply chain, right?" Right! Standardization is among the main challenges and needs to be understood in this process. A challenge, because some companies opt to use their own house-codes to identify products, which is an error and becomes a barrier to harvesting benefits from standards. And a need, because there is no way to gain benefits from a technology investment for the supply chain if you do not embed a standard.

Standards are at the core of supply chains for smart packaging technologies. As with containers that can be transported via ship, truck or train, standardized codes can be read anywhere—in China, the United States, Brazil or Australia—without any kind of translation. Certainly, smart packaging technologies can address supply chain complexity, but only if they are integrated with global standards.

Milton Froiman is the head of procurement and supply chain at FIT—Technology Institute.