Supply Chain Council of European Union |

Returnable Packaging and IoT: Keys to a More Sustainable Supply Chain

As consumers become more eco-conscious, they push brands to adopt more sustainable practices. Many have responded by increasing their reliance on returnable industrial packaging (RIP) — reusable pallets, racks and containers designed for use by manufacturers and their customers in a tight shipping loop. The result is a significant reduction in the amount of packaging-related waste.

With the use of RIP, however, comes an increase in the number of assets that a supply-chain manager is responsible for keeping track of. Failure to do so can have a significant financial impact, in the form of late fees charged by manufacturers, or demands that customers reimburse them for lost packaging.

In most organizations, RIP isn’t considered an issue until the finance team comes knocking at the end of the year to ask supply-chain managers about their practices: How much working capital are we using? How many assets went missing? Why is so much of our RIP lying in our warehouse? Suddenly, it’s not just a supply-chain issue — it’s a profitability problem.

For brands to effectively implement RIP initiatives without incurring potentially massive costs, they must leverage internet of things (IoT) enabled networks and devices that streamline their ability to track those assets.

Supply-chain asset tracking is far from a new problem, but adding RIP increases its complexity. Supply-chain managers have searched for years for a way to streamline the process. For many, radio frequency identification (RFID) seemed like the Holy Grail of goods tracking, but in actuality the solution was flawed. RFID requires a tag on each tracked item, as well as infrastructure in the form of tag-sensing readers and antennas to increase their range. While on the surface this seems simple, implementation is a complex, time-consuming process that requires significant planning and management between manufacturer and suppliers, hefty initial investment, and backend support via cloud applications and system integrations.

Implementing RFID tracking throughout a supply-chain operating across 500 sites can take up to two years before it’s up and running. Even then, there’s no guarantee that all pallets are getting read, as they might be in a zone with no antennas. In simple terms, RFID fails to deliver the kind of scale that enterprises need, especially when addressing their own warehouses and ecosystems.

IoT reduces this complexity and offers a far more lightweight solution, thanks to its use of wireless, low-emission networks that can revolutionize the way an organization tracks and manages RIP and other critical assets across the supply chain. By leveraging a dedicated, low-bandwidth wireless network — such as an 0G network, which specializes in sending and receiving messages made up of small amounts of data across long distances — organizations can reap the benefits of a dedicated asset-tracking solution without a significant investment of time and capital.

Additional advantages of deploying an IoT network to manage the tracking of RIP include:

  • Speedy implementation and immediate insights. Most IoT-enabled solutions operate on a subscription service basis, taking a “pay-as-you-go” approach that allows for rapid implementation and immediate integration into existing supply chains. Further, many network providers are working to provide end-to-end service. This means that once an organization identifies the right network for its needs, the provider will send devices already equipped with sensors connected to that network, which the user then attaches to RIP. And that’s it. No infrastructure, no capital expenditure, no testing, no process reorientation, no restrictions in scope, and complete visibility of inventory. The solution is usable from day one.
  • Hardware with no upfront costs. The efficiency and durability of the devices tracking RIP ensure a hassle-free customer experience. Low-frequency networks and sensors enable a battery life that outlives the lifecycle of RIP, often lasting up to 10 years. As a result, network providers are able to design devices that can survive harsh, remote conditions with no need to change or charge batteries. With this always-on capability, downtime, maintenance and refresh costs to replace devices are significantly reduced.
  • Actionable data. Even if an organization has complete visibility of its supply chain, the value of that visibility might not be realized if the data isn’t actionable. With IoT-enabled solutions, data not only exists, it tells a story. By taking all data into consideration, these solutions can tell supply-chain managers whether a specific RIP has to be moved, where to, and by when. It’s a little like Google Maps, laying out the information required for users to make the right decisions when choosing a route. More than that, though, it offers the user the most efficient routes in the supply chain in context of its surroundings, by predicting future needs from past data. The system then signals live cloud-based alerts via the network.
  • An enterprise-grade solution with a consumer experience. Because of the historical complexity of supply chains, most managers don’t expect the solution to one of their most pressing problems to be so simple. By leveraging IoT, however, they’re able to get rid of unnecessary hurdles like device purchasing, deploying infrastructure, testing, maintenance, and support application development. Further, they can eliminate all of this and end up with a more complex and multifunctional connective network across all business activities, while making monitoring easy and consumer-like.

Supply chains are always going to be complicated, especially when it comes to tracking expensive equipment like RIP. But by leveraging the IoT, supply-chain managers can reduce that complexity and streamline processes, all while becoming more sustainable.

Premsai Sainathan is director of marketing at Roambee, a provider of shipment-tracking and asset-monitoring technology. Ana Maria Giménez oversees global business development, sales & channel acceleration at Sigfox, a global communications service provider.

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