The diameter of earth at its widest is 7,917 miles with the circumference being 24,901 miles. Diced pears from Dole plc –picked in Argentina and processed in Thailand– travel 19,000 miles before reaching its market in the US. That is a whopping 76% of the earth’s circumference at its widest. Argentina and the US being only 5,600 miles apart, these peers travel twice over the pacific only to travel to its neighboring continent. On average a US citizen’s meal travels 1,500 miles before reaching plates.
As Globalization enables Supply Chain optimization for minimal costs, it is cheaper to ship pears to Thailand for processing rather than having them processed within Argentina and shipped directly to the US. As one asks “How complex can a Supply Chain be?” The answer will always be “quite complex”.
This complexity can be fought by Smart Packaging technologies, such as Radio Frequency Identification (RFID) and Digital Printing, using serialized QR-Codes or Watermarks. The idea, in this case, is to create the Smart Supply Chain: a high-technological version of the entire logistic process.
If Smart Packaging is caught only by 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, what is great, because it brings consumers to interact with directly to the manufacturers. However, this is not the end point.
Smart Packaging technologies can bring more efficiency to Supply Chains anywhere. Thousands –or million– companies worldwide are using those technologies to make the right products arrive safe and sound to their buyers, which are huge companies or a single end consumer. With RFID tags or serialized codes digitally printed in boxes, the logistic process become more reliable and efficient, saving money from human errors and making it slightly less complex. And, of course, allowing a closer contact with the buyer, even if he or she are on the other side of the planet.
Let’s consider that someone can contest saying: “the codes used on technological resources must be standardized to make it all work in a global Supply Chain, right?” Right! This is one of the main challenges and needs to be understood in this process: standardization.
A challenge, because some companies decide to use their own house-codes to identify products, what is an error and becomes a barrier to harvest benefits from standards. And a need, because there is nothing to dig as a benefit from a technology investment for Supply Chain if you do not embed a standard on it.
Standards are the core of the Supply Chains with Smart Packaging technologies. Like containers that can be transported by a ship, truck or train, standardized codes can be read anywhere, in China, USA, Brasil or Australia, without any kind of translation.
Certainly, Smart Packaging technologies can address Supply Chain complexity. Though, do not forget: if they are integrated with global standards.
Milton Froiman is the Head of Procurement and Supply Chain at FIT – Technology Institute.