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:
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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