On the Value of Intelligent Packaging - A Packaging Logistics Perspective

Abstract: Good decision-making relies on accurate, timely and reliable information. This can be supported by having intelligent packaging which allows data on the whereabouts and condition of goods to be automatically captured along a supply chain. This research reveals that, although interest in intelligent packaging in Swedish manufacturing industries is high, actual use is limited. Nevertheless, this research indicates better logistics performance for companies using intelligent packaging utilising radio frequency identification (RFID) technology, while no significant differences can be seen for companies using other Auto-ID technologies to identify packaging along a supply chain. The research also reveals that the number of identification points along the supply chain, and more extensive sharing of tracking data with supply chain partners, both upstream and downstream, and in terms of frequency and scope, seem to contribute to improved logistical performance. This result points in favour of using intelligent packaging as it will reduce time needed for bar code scanning or manual data entry, and reduce the risk of missed registrations. Information by itself, however, does not improve firm performance, but rather it is how it is used which brings about improvements. A framework for the value of intelligent packaging is proposed and discussed in relation to two in-depth empirical simulation studies. The framework present some key environmental factors which affect the potential of intelligent packaging to deliver value. The simulation studies also provide conclusive evidence that information provided by intelligent packaging can be used reactively as well as proactively, for planning and decision-making which together improve logistics performance and reduce costs. More disappointing, however, is that in neither of the two intelligent packaging systems investigated, did much use of the data actually take place. It seems that intelligent use of intelligent packaging might be even less common than intelligent packaging itself. This result may help to explain the reluctance of companies to actually invest in RFID, despite the high interest expressed.