You’ve probably heard the term Internet of Things (IoT), but what does this ubiquitous industry buzzword refer to, exactly?
The IoT is the interconnectedness of everyday objects and machinery to the internet through computerization (microchips, sensors, etc.), enabling inanimate items to exchange data and communicate with other connected objects.
Industry insiders are predicting that the IoT could change manufacturing as we know it by tracking and measuring every previously unquantified element of operations.
Read on for everything you need to know about the IoT and packaging, including what’s trending now, how companies are innovating, and a predictive look forward.
How the IoT Was Made for Manufacturing
The IoT (known as the IIoT, or Industrial Internet of Things in the manufacturing space) is particularly applicable to packaging.
The interconnectedness of machinery and materials — and the sharing of real-time data — can drastically affect efficiency and the evolution of production.
Imagine a fully automated warehouse floor where each item and piece of equipment exchanges data in real-time, creating a streamlined operation with very little need for staff oversight.
● On the manufacturing/packaging process side, helping machinery to exchange information and improve efficiency.
● On the packaging side, through interactive or technology-driven packaging that can facilitate consumer engagement with products, among other opportunities.
The IoT and Packaging: the Future Is Now
If you’re like most companies, chances are you’ve already implemented elements of the IoT.
A 2017 study by Bsquare found that 77% of manufacturers currently have an IIoT solution in place. 98% of those rate their solutions between “very” and “somewhat” important to operations.
Most companies have connected their CNC machines and manufacturing systems, though there are countless other opportunities for streamlining operations through the IoT and packaging — in addition to increasing customer engagement and loyalty.
IoT Meets Warehouse Management
Another key area for the potential of IoT is in warehouse management. Through connectivity and digital accuracy, it can ease the burden of staff oversight and improve efficiency.
There are many opportunities for robotic automation to be utilized in warehouse operations, across all industries. Take food, for example. Robots can minimize dangerous tasks for workers, and reduce risks of contamination.
A robotic automation of your packaging line could reduce costs and increase output. Additionally, using the Goods to People (GTP) model, connected robots could aid warehouse staff by automatically retrieving and moving items based on real-time data through the IoT.
Warehouse inventory is one of the primary ways in which the IoT is predicted to revolutionize operations. Inventory management is notoriously challenging, particularly when it comes to online orders.
But with the IoT, different systems can share data and inventory lists. Automated systems and sensors would reduce or eliminate the need for workers to count or scan items manually.
From a larger perspective, point-of-sale data would be shared with warehouse and manufacturing data, which would quicken order fulfillment, provide more personalized service for customers, and give companies invaluable insight into consumer behavior.
If you’re wondering whether your machinery could use an upgrade, take our
Are Smart Warehouses the Next Big Thing?
Ask Amazon (Alexa) or Google (Home) — smart houses are the hottest trend these days. But can this technology translate into manufacturing? Absolutely.
Smart homes use IoT to manage temperature, security, and the functionality of devices. Smart warehouses can do that and more through artificial intelligence (AI) and other advancements.
Warehouses with connected systems can manage temperature for sensitive products; it can dim or brighten lights; initiate lockdown if there’s a security risk — and oversee inventory. Workers can access automatically generated reports via tablets, or use a smartwatch to manage issues along the supply chain.
While still in the early stages of development and with data management challenges to overcome, in the long term, smart warehouses are predicted to become massively impactful.
Smart Packaging and Consumer Engagement: How Companies Can Maximize Success
Taking the IoT a step further is smart packaging (also referred to as intelligent packaging) — material with interconnectedness embedded directly. That way, the packaging itself shares information.
One key feature of smart packaging is that it allows consumers to engage with it and access data like beauty tutorials, food preparation videos, or other information that helps them fully utilize the product.
Whether embedded with sensors through QR codes, virtual reality or augmented reality options, there are numerous ways for the IoT and packaging to work together.
The key to success is both adding value for consumers and maximizing data collection in order to optimize operations and boost sales and efficiency.
● Authentication: Using microchips embedded in products, scanners can verify the authenticity of a product. This is particularly useful for brands that face counterfeiting issues. Companies like MK, Channel, Louis Vuitton and Levi’s have already begun implementing smart packaging to insure consumer protection and protect their brand’s reputation.
● Tampering Sensors: Specific types of smart packaging can register whether or not a product has been opened or tampered with. Thinfilm, for example, has been used by Johnnie Walker on ‘connected’ NFC bottles. Consumers can scan the bottles and determine if the product is appropriately sealed.
● Tracking Logs: Smart products retain a digital footprint through every step, from production to retail. Tracking logs allow access to the lifecycle of each SKU, showing where it’s been, how and when it’s changed hands, etc. This allows companies to more easily identify errors or issues along the supply chain.
● Temperature Sensors: Since some products are perishable and sensitive to environmental changes, NFC stickers with temperature sensors can track these changes. Scanning the item allows consumers to determine if an item has been kept at its optimal temperature, and how they should do so moving forward.
● Reorder Triggers: Smart packaging can allow consumers and retailers to automatically reorder products when stock runs low. By connecting with shelf stock data or providing triggers on the products themselves, this will allow automatic reordering — or instant, one-step reordering for consumers looking to avoid the hassle of running out of something.
● Digital Labels: A digital e-label can allow consumers to access all information about a product instantly. Through a QR code or other trigger, consumers can pull up videos, images, or any other relevant information. On a food product, for example, recipes suggestions and video tutorials could be accessed.
● Real-Time Offers and Coupons:Smart packaging means companies can add or remove content in real-time. So if a product isn’t meeting sales expectations, they could provide a two-for-one offer or other coupon. Customers simply need scan the label and pull up relevant offers. This allows both companies and consumers to take advantage of actual market conditions and sell/purchase accordingly.
All of these options allow brands to increase flexibility around product offerings and provide a more customized experience for consumers — in addition to collecting more sales data and refining their retail presence.
The Future of IoT and Packaging — Where Do We Go From Here?
● According to a report from GE, the IoT could add $10-15 trillion to global GDP by 2030. “Connecting machines and the Internet could eliminate $150 billion in waste across major industries, driving a productivity revolution. Just a 1% increase in efficiency can mean savings of $30 billion in aviation, $66 billion in power generation and $63 billion in healthcare over 15 years."
● Retailers appear to be the most eager to embrace IoT. According another study, almost 70% of retail decision makers said they were ready to adopt IoT. 65% said they plan to invest in automation technologies for inventory management and planogram compliance by 2021.
● Consumers are increasingly willing to trade data in order to achieve a more personalized retail experience, giving companies more opportunities to increase loyalty and sales. A survey by YouGov found that nearly half (43%) of consumers agreed that they would share personal data with companies to save money through personalized promotions, discounts or deals.
If your company hasn’t delved into the possibilities of the IoT and packaging, there’s no better time than now!
One thing is clear — the internet is changing the manufacturing space, and there are countless opportunities to optimize operations, boost efficiency, and increase sales with the introduction of new innovations and inventions.
Have you implemented the IoT in your operations? Share your experiences in the comments below and be sure to take our free quiz to assess the condition of your equipment and whether it’s time for an IoT-compatible upgrade.
About David Roberge
Part of the outstanding Industrial Packaging team. I'm lucky to hang out with some of the most knowledgeable folks in the packaging industry. I feel even luckier to be able to share our knowledge with you. I love learning about and helping readers grow their brand through unique, flexible package design from the birth of the product idea, through the supply chain and to the launch and placement on the shelf or at the consumer's door.