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Packaging gets smarter

New digital technologies are making intelligent packaging the wave of the future.

Most industries are undertaking some degree of digital transformation that is fundamentally changing the way they do business, and the packaging sector is no exception. Driven by the Internet of Things (IoT), and its use of sensors, devices, networks and data traffic, packaging companies could see growth opportunities emerge as a result of the efficiencies and capabilities that new digital technologies make possible.

One source of growth for many companies in the industry is through intelligent packaging. Intelligent packaging is generally defined as packaging with functions beyond only passive containment. Examples include temperature monitoring, tampering, vibration monitoring and position tracking, which are supported by digital technologies such as sensors, unique identification (e.g., QR, RFID) and big data analytics. Other areas that can be addressed with intelligent packaging include inbound, outbound and disposal traceability, quality information (tampering and authenticity) and customer interaction/loyalty.

To enable intelligent packaging capabilities, packaging companies generally have three main needs:

  1. Increasing production and supply chain efficiency: This need is driven by the goal of further reducing production costs and increasing capacity utilization and inventory levels through plant performance, logistics, inventory, sales and consumption analytics, and services.

  2. Establishing secure product quality and safety: Traceability, anti-tampering control and quality analytics can help packaging companies that are seeking to efficiently improve product safety, uphold quality levels and reduce non-quality incidents.

  3. Strengthening brand differentiation and consumer engagement: For some companies, intelligent packaging would offer further optimization of direct marketing, promotions, customer interactions, innovation, brand differentiation and sales channels through unique ID, traceability and consumption analytics.

Generating value

In order to be successful with intelligent packaging, companies in the industry need to assess how to target and generate value. This exercise can be performed from the following five perspectives:

  • Value chain opportunities: Examine which customer needs can be addressed and how to capture that potential. It is important to address areas and sectors where there is an actual need.

  • Offerings and business models: Determine how to monetize intelligent packaging ideas and the customers’ willingness to actually pay for them.

  • Capabilities and partnering: Evaluate which key capabilities (business and technology) are needed to deliver the offerings. Should these capabilities be built or bought?

  • Strategies: Assess whether a first-mover advantage is feasible with an intelligent packaging approach. It is also critical to assess what the competition is doing.

  • Potential and roadmap: Determine the overall value potential and investments needed. Agree on which service or area can be piloted and calculate a projected return on investment.

Thoroughly planning and thinking through the launch of an intelligent packaging concept is critical. Like it or not, one needs to be ready to fail—but hopefully the failures come early in the process. Companies that are successful in the area of intelligent packaging will likely be those that test early, refine and scale what works.