A few weeks ago we attended the AIPIA (Active & Intelligent Packaging Industry Association) World Congress in Amsterdam and one of the opening remarks made was: the technology for connected packaging has been available for some time now and it’s only more recently that brands have stopped watching from the sidelines and taking the plunge into enabling connected packaging for their products.
While there have been some early adopters in the space piloting some innovative projects in the past few years, the bulk of consumer brands and manufacturing companies have preferred a watch and wait approach with various concerns about initiating their own transitions from traditional packaging and systems to connected packaging and smart data driven systems. Many of which were valid concerns given IoT smart products and active / intelligent packaging is still fairly new as a key area of technology and rapidly evolving and changing every few weeks. During our conversations with various stakeholders of the industry there, two thoughts appeared unanimous:
- Connected packaging & digitalization of products / smart products is undoubtedly the way forward for all brands that are to compete in the current digitally connected world and is here to stay.
- The question is no longer if and when brands and manufacturers will invest in connected packaging but how to go about it in a smart way so as to address the concerns they may have and do it “the right way” so it can scale without hurdles and road blocks in future as the technologies themselves, continue to evolve.
As a technology enabler that has been working on both the technology side as well as understanding the business side and requirements of CPG brands and their product lifecycles, here are some of the top factors to consider (and concerns they address) while making the right choices and getting connected packaging technology right from the get-go:
Centralization Vs Decentralized Systems for Connected Packaging Applications
Consumer transparency, product information delivery, e-labeling, traceability, product authentication and counterfeit prevention, consumer engagement, loyalty management, waste management, consumer feedback loops, augmented reality, re-ordering & supply chain optimization…these are just some of the many application areas of connected packaging. With multiple individual technology solutions available for each one of these, the concern for brands is “how many different vendors and solutions will we have to manage?”. While each application area has its own set of requirements and merits, managing having product data fragmented across different software systems has its own set of challenges. “How will we ensure data integrity across all these?” “How can we synchronize updates to product data simultaneously on all these different systems?”. From that perspective, centralization of the product / item data makes sense long term. The way we picture it is: when a physical product is manufactured and rolls off the production line, simultaneously a digital twin / digital record for that product should also be generated and tagged to the physical product. As the product rolls off the line and journeys through its lifecycle, through the supply chain, the consumer and beyond, that product is interacted with by multiple connected devices and data about the product is constantly being updated or read via the digital twin via connected devices and the various applications. This approach allows you to first connect the product, give it a digital life alongside its physical one and then build various applications and business processes on top of it rather than a decentralized approach.
Being Immune from Technology Shifts to Activation Tags & Triggers on the Packaging.
Not very long ago, the humble UPC/EAN/GTIN 2D barcode was the only activation trigger on product packaging. You now have barcodes, datamatrix codes, QR codes, NFC tags, RFID labels, databar, invisible markers, nanoparticle markers, temperature sensors, spoilage sensors, package anti-tampering sensors and a range of different activations and triggers on the smart packaging. The larger concern is the rapid evolution of technologies and arrival of new ones hitting the market every few months. How do you know which one is going to stand the test of time? One of the smart moves in getting connected packaging right is to decouple the triggers or activation technologies from the product data or software system. Each of these activation tags usually have an identifier which can be used to tie it to the data. If the trigger changes in future, the flexibility to de-link it from the earlier tag and connect it to a new tag using the identifier is inherent. Whereas in a tightly bound system where the tag on the packaging and the software are linked, that flexibility to be immune to changes in tags and activation technology is lost.
Flexible Architecture That Can Keep Up with the Pace of Change
Change is inevitable and nowhere does it hold more true than the consumer products industry. Requirements within the industries, regulations, compliance rules, data systems, standards for technology all change and get updated faster than ever before. Very often, before a company finally rolls out updates to the their system, the next change has come along sending them back to square one. The software systems used for connected packaging need to factor into their architecture this constant need for updates and changes. The flexibility to update the data model, extend attributes, maintain different versions, control the flow of data, accessibility of data and address changes in business systems, regulation or the real world are essential to deploying a connected packaging solution that can keep up with change and endure.
Ease of Integration & the API Ecosystem
Often decision makers seek out a one-stop solution provider for a specific application or solution to a challenge. For example, counterfeit prevention. This may work well as an approach for a small business but a mid-sized or large organization has highly complex systems with multiple stakeholders, systems and moving parts that need to come together when it comes to product related data systems. Manufacturing IDs and data related to products may reside in SAP or an ERP system. Ingredient information about the product in a PIM software, labeling information in another location, marketing related images and content elsewhere and so on. As a result, ease of integration with other systems both internal for gathering item related data required for connected packaging applications as well as external applications is important to factor in. Any system you select should offer API connectivity to other systems to bring in data or serve data to other systems in order to integrate seamlessly with existing systems and be compatible with the API ecosystem which is really the backbone of digitization and data today.
Phasing Connected Packaging Projects & Scalability
Connected packaging is not a single project or end goal with a limited time line. It’s an enabler for several applications, use cases and smarter more intelligent business systems as the organization moves ahead. Getting the foundations for the system in place first along with infrastructure and processes in place first allows you to phase different applications, pilot projects individually and then scale rapidly. For example, a brand can start with enabling their packaging to deliver e-labels and instructions on how to use the product to start with. As a second phase, use the packaging to enable digital warranty activation and later push out engagement via contests as a third phase. With initiatives such as the GS1 Digital Link, a single trigger on the packaging or a single QR code would soon be able to trigger multiple interactions with the product depending on who is scanning it, where they scan it from and other contexts. This would eliminate the need to print different triggers on the packaging every time a new interaction is introduced. The right connected packaging technology selection should enable an organization to deploy different interactions and applications connected to the product in a phased manner and also offer the infrastructure and ability to smart small, test and then scale across thousands of products, millions or billions of serial items as and when required.
All considered, in order to get connected packaging right and make the right decisions from the start, looking at connected packaging from a wide, holistic perspective complete with all the possibilities that will emerge in enabling it in a flexible way, will help invest time, money and effort the right way.