According to a 2015 Gartner report, the world will have 25 billion connected items by 2020, a 30-fold increase over 2010.
This growing network of connected devices, dubbed the “Internet of Things,” will change the way consumers interact with products in stores (e.g. bluetooth-enabled beacons that push advertisements to nearby phones) and the appliances in their homes (e.g. refrigerators that automatically order groceries when food supplies are low).
But the Internet of Things (IoT) will have an even greater influence on the supply chain industry.
Advances in radio frequency identification (RFID) technology is reducing the size, cost and performance of web-connected sensors to the point that a single tag can follow a product across the entire value chain, from manufacturing to point of sale.
Challenge of IoT: How to connect non-powered items to the web
It is easy enough to connect powered items like electronic devices to the internet. But how do you connect pallets, boxes and packages? Currently, items in the supply chain are tracked by applying an RFID tag to an object. The tag allows logistics providers to keep track of inventories in real time. It also eliminates the need to manually enter data into various warehouse management systems.
Benefits of RFID
- improved visibility across the supply chain for manufacturers, distributors and retailers
- reduction in theft (embedded sensors are more difficult to identify and remove than add-on sensors)
- improved security and safety
Expanding RFID from manufacturing to distribution
RFID technology has come along way over the last decade. Early RFID tags only operated in closed loop systems, meaning that tags could only be tracked within one company. As a result, manufactures tended to use RFID to track products as they moved along the supply chain.
New standardization practices developed by EPCglobal, a nonprofit organization which sets economical and technical standards, has allowed RFID systems to be implemented across company boundaries.
Agnostic RFID tags allows products to be tracked across the supply chain, as products move from the factory to the distribution center to the point of sale.
Lowering the cost of RFID
While the cheapest RFID tags have dropped in price to about 8 cents, it remains cost prohibitive to track lower values products.
The company Uniqarta Inc. is developing RFID sensors that are so thin they can be embedded in paper packaging.
Uniqarta’s goal is to produce unobtrusive RFID sensors that cost under 5 cents. The invisible sensors — expected to hit the market at the end of 2017 — will help reduce theft and inventory expenses while increasing the variety of product types that can justify the adoption of RFID.
Potential uses for low-cost, embedded RFID (Source: Uniqarta)
- A baby’s diaper that senses when it is wet and alerts a parent’s smartphone
- Pharmaceutical packaging that authenticates its contents and senses tampering
- Retail goods that identify themselves at the item-level and communicate whether they are on a store shelf, in the backroom, or in the warehouse
- Construction materials that detect faults and automatically communicate imminent failure alerts
- Wall coverings that sense a room’s occupancy and automatically adjust lighting, heat, or cooling
- Printed media that triggers personalized smartphone content for the reader
- Food packaging that senses if a temperature threshold has been exceeded during shipment and alerts the shipper to take appropriate action