Low-cost radio frequency identification device tags are on the horizon but so is a vast array of new disposable electronics that is about to hit the packaging world. The effect will undoubtedly be dramatic. Is it opportunity or threat? Faraday Packaging Partnership managing director Walter Lewis argues it is unprecedented opportunity, especially if users have the imagination to convert the technology into premium prices!
RFID is not new. In fact the concept is well established and the technology is already in extensive use in our daily lives. Take, for example, some of the security tags found on many clothes outlets – how long have they been in use?
Take the car keys which we use every day. In practice, we now signal to our car through an RFID device rather than use a key itself. RFID has been permeating our daily lives for a long time.
What is new is the emergence of low-cost RFID devices – something that can be attached to every day items such as food, drinks, personal or household goods.
The highest profile development so far is undoubtedly the Auto-ID project led by Massachusetts Institute of Technology.
This is a mega, international project supported by a wide array of leading companies and which has developed technologies. This means ‘smart’ tags with an embedded silicon chip could soon be available at less than a penny a go.
The ambition is widespread application in supply chain tracking so, alongside very dramatic technological breakthroughs, Auto-ID is seeking to create an international coding system through which every object in the world can be uniquely tagged. Every single item on a production line and within a supply chain could thus be labelled and tracked!
As an illustration of potential, it has now been widely reported that Gillette – one of the leading supporters of Auto-ID – has just ordered 500 000 tags to carry out large scale testing and Auto-ID has recently announced that the project will launch its first commercial service later this year.
The low cost, intelligent tag is virtually here. But a penny a tag is still significant in the packaging world! Competing technologies are moving apace rapidly, with not the least development being in so called ‘dumb’ tags. These are tags without any silicon chip – so trackable but unable to store and compute information.
Should this be regarded as a serious disadvantage? Not according to Flying Null in Cambridge, UK. Flying Null currently produce ‘dumb’ tags at a fraction of the cost of auto-ID tags and they can track products just as effectively.
The catch – the hardware to track the tags costs more than for smart tags! You pay your money and take your choice! Confused… don’t know which way to jump? You bet, but are we also being deluded into a single-track mindset of supply chain efficiency?
Supply chain efficiency can only reduce costs – which are already at historical lows. If we really want to reduce costs, surely we need to think location of manufacture? What about the opportunity from all this electronic wizardry to add some margin – to shift a few mundane packaged goods into the premium price range? In other words to please the punters and maximise the margin?
Well, RFID is certainly not the only thing in the pipeline. Indeed, compared to RFID developments, the array of new disposable electronics that is beginning to emerge for research laboratories is almost overwhelming. New polymers and other electronically active materials – semiconductor capability, electric battery capability to name just two, alongside more established fluorescent and light emitting materials – will enable production of low cost, disposable intelligent devices by printing type process.
One of the leaders in the adventure, is undoubtedly Plastic Logic of Cambridge UK. The pedigree of the technology is impeccable. It’s straight out of the research labs of Professor Richard Friend, Cavendish Professor of Chemistry at the University of Cambridge. Ready to write that off as academic ivory tower stuff? Beware, Friend was founder of Cambridge Light Displays, a company which has just been bought out for a reputed £400M.
Friend is now turning his attentions to polymer computers, perhaps a bit slow and limited compared to silicon, but able to be laid down by printing processes directly into your packaging label. Labels could soon be computers! Could then, for example, patient compliance – currently a major bug bear of any pharmaceutical company – become a thing of the past overnight?
Another company starting to lengthen its stride is Paper Power, this time based in Israel. This company owns technology for producing ultra low-cost batteries, again by printing the substrates. Based on their patented technology, Paper Power is developing a range of ultra low-cost disposable devices. First off the production line is a timer device, surely a premium price convenience factor when combined into any pack of product which is time dependent in its use.
These are just examples for starters in the technology now emerging. Put it all together and the ability to produce low cost, powered, intelligent devices is about to be limitless. The list could go on and on – speaking packs, tamper evidence packs, packs which sense and respond to all sorts of things, incorruptibly-coded packs, automatic re-ordering packs and so on.
Users don’t just need to think about application to the product – rip off parts of a pack could be valuable new entities in themselves like a cell phone or radio! Next time you are at an exhibition visit the Flint Inks stand. Chances are that you will have an opportunity to pick up a disposable personal radio, not quite printed yet but a demonstration of the company’s confidence in what will soon be possible!
In positioning itself as a systems integrator who is bringing emerging technologies to the packaging world, Faraday Packaging Partnership has had to re-think its strategy of exclusive technology partnership with university laboratories.
Now it is extending its involvement to new, innovative small companies – often ‘start ups’ – who are driving forward with the application of new disposable electronics technology.
Only by working with these leading edge companies can it offer an effective service and, even at this early stage, it already has a significant number of technology alliances.
So which way should you jump? The march towards low cost RFID is all about reducing shrinkage in the supply chain. The user has to assume someone has done the sums to demonstrate the return on investment after he or she has bought the necessary hardware to track valuable commodities.
The sums should be simple enough. It’s purely a commercial decision. There is no consumer value in it, just lower operating costs. With good independent advice, we will all be able to buy from the same sources and so all have the benefits once they have been demonstrated.
What will really distinguish the winners and losers is the ability to turn all this electronics into consumer value. That is to say features which you and I feel are sufficient benefit to warrant paying extra when we do our everyday shopping. That way there is added margin to be made and a way out of the current almost profitless grind. There is a real future for the successful.
The prize is there for the taking for those who can think beyond the dazzle of the technology. Just work on the assumption that anything will be possible. Those with packaging interests need to think beyond the technology to consumer value.
What is it you would pay a premium price for to have added to your purchases in the supermarket? That’s the real differential. He who innovates in application will be the real king.
Examples already exist that point the way. Think back a few years. Turn your mind back to the beginning of mobile phone technology. Would anyone have envisaged a whole new language being created by text messaging between kids… and would anyone have envisaged this proving to be one of the main income streams to mobile phone companies? I doubt it but those who got there eventually are now the winners.
With virtually limitless low-cost electronics, the same quantum shifts are undoubtedly available to consumer packaging. There’s real salvation out there! Don’t be dazzled by the technology. Think consumer benefits. Move outside the box. Remember text messaging. Get a foot in the door of premium price application. The limiting factor is any one individual’s own imagination!