AI drives smart packaging and logistics

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The common framework underlying connected smart packaging is the Internet of Things (IoT), where physical items are connected to an internet-based ecosystem using RFID (Radio Frequency IDentification).

As Gartner declared in 2017, RFID is a mature and vital technology for companies to utilize in renewing and improving their logistics and supply chains – and in 2018 these endeavours continued apace. Some 15−18 billion connected smart packages were produced in 2018.

Connecting product flows is a way for companies to achieve visibility in factory and store level ac-tivities. ERPs have been carrying information on inventories for many years already, but with a poor level of data quality. According to studies undertaken (e.g. Auburn University 2018), the accuracy of traditional barcode-based product tracking can fall to less than 40%. The new connected packaging has improved data quality to over 99.9%, providing companies a totally new level of efficiency and manageability and an unexpected wealth of data that can be utilized.

An Aachen University study on the Industry 4.0 Maturity Index highlighted the value of supply chain visibility as an enabler for higher cognitive applications. This drives the relentless and purposeful development of systems, which according to researchers (e.g. Porter 2014) is the true nature of today’s competition.

In the future, AI will manage and optimize all replenishment, security and payments by analyzing data extracted from smart packages.

Practical AI applications in logistics include optimizing routing and shipments in the most efficient way by analyzing real-time data on orders and the availability and pricing of carriers. As these opportunities arise, companies can improve profitability and bottom line performance.

For revenue generation, new tools are offered by integrating AI into smart packaging. A typical case is where customers are recommended particular items that are commonly purchased in addition to the product that the customer is buying at the time. This small but effective feature to drive add-on sales in online stores is increasingly appearing in brick-and-mortar stores and automated unmanned stores as well.

In the future, AI will manage and optimize all replenishment, security and payments by analyzing data extracted from smart packages. This smartness makes it possible to both improve the customer experience and fight climate change. No more empty shelves or queues to cashiers, and significantly less waste and unnecessary logistics!

About the author

Voipio Ville

Ville Voipio

Intelligent Packaging, Stora Enso

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