Smart Labels Set to Revolutionize Supply Chains and Shipment Tracking

December 26, 2024

The article “How are smart labels going to transform supply chains and shipment tracking?” by Sharath Muddaiah, Head of Global Portfolio Strategy for IoT Solutions at Giesecke+Devrient (G+D), critically discusses how smart labels are set to revolutionize supply chain management and shipment tracking. Given the current landscape of global supply chains fraught with complexity, fragility, and disruptions, smart labels are emerging as a key tool to foster greater visibility, transparency, and traceability.

The Need for Smart Supply Chain Management

Current Challenges in Global Supply Chains

Global supply chains are increasingly complex and fragile, with numerous disruptions affecting their efficiency. Trade tensions and extreme weather events have highlighted the vulnerabilities within these systems. The main challenge has been a lack of visibility, resulting in blind spots that make it difficult to anticipate or quickly respond to disruptions. The pandemic further exposed these weaknesses, emphasizing the need for more resilient supply chain structures. Companies that relied heavily on “just-in-time” delivery were particularly hard-hit, as this approach left them unprepared for sudden surges in demand or supply interruptions.

The last few years have underscored the importance of having robust and adaptable supply chains that can withstand unforeseen challenges. Businesses have realized that the traditional focus on minimizing costs and maximizing efficiency may no longer be adequate in a world beset by unpredictable factors such as trade disputes and natural disasters. With so many moving parts and diverse stakeholders involved, maintaining real-time oversight and responsiveness has become a daunting task that requires advanced technological solutions. The industry is now at a critical juncture, necessitating a shift towards smarter, more integrated supply chain management systems.

The Role of Technology in Addressing Supply Chain Issues

Advancements in technology, such as generative AI, automation, and IoT, are anticipated to support the transition to smart supply chain management. According to KPMG’s predictions for 2024, these technologies will become the new norm, helping to mitigate the issues caused by the current focus on low cost and efficiency through “just-in-time” delivery. Generative AI, in particular, offers the potential to improve predictive analytics, allowing companies to foresee potential disruptions and take proactive measures. Similarly, automation can streamline processes and reduce human error, while IoT devices can provide real-time data on the status of shipments.

Smart labels, in particular, are seen as a solution to these challenges by promoting secure and end-to-end visibility. By integrating these labels into their logistics operations, businesses can gain a comprehensive view of their supply chains, tracking each package from origin to destination. This enhanced visibility can help identify bottlenecks, optimize routes, and ensure timely deliveries, ultimately reducing costs and improving customer satisfaction. Moreover, the information gathered through smart labels can be used to enhance decision-making and foster more resilient supply chain strategies, thereby mitigating the risk of future disruptions.

How Smart Labels Work

Transforming Packages into IoT Devices

Smart labels are designed to be user-friendly, requiring no additional infrastructure and minimal maintenance. They transform any package into an IoT device, offering a simple yet advanced way to track parcels. This transformation provides a high level of security and transparency in logistics, making it easier to monitor shipments and ensure their safe arrival. These labels are equipped with sensors that can track various parameters, such as temperature, humidity, and location, providing valuable data about the conditions under which goods are transported.

The implementation of smart labels represents a significant advancement in supply chain management, as they enable real-time tracking and monitoring of shipments. Companies can access detailed information about each package through a centralized platform, allowing for immediate responses to any issues that may arise during transit. This level of oversight not only improves the efficiency of the supply chain but also enhances customer trust, as they can receive accurate and up-to-date information about the status of their deliveries. In essence, smart labels transform traditional logistics processes into a seamless, technology-driven operation.

Breaking Down Data Silos

One of the transformative capabilities of smart labels lies in their potential to break down data silos that have traditionally plagued supply chain management. Data fragmentation and siloing have become more pronounced with the rise of various technologies, as supply chains consist of numerous stakeholders using different systems. This has led to a lack of coordination and information sharing, making it difficult to achieve a cohesive view of the entire supply chain. Smart labels consolidate data across these diverse systems, enabling every participant in the supply chain to access a unified set of information.

By integrating data from various sources, smart labels foster greater collaboration and communication among stakeholders, from manufacturers and suppliers to logistics providers and retailers. This holistic approach allows for better accountability in handling delivery issues and facilitates more informed decision-making. Moreover, the ability to access real-time data reduces the likelihood of discrepancies and enhances the accuracy of inventory management. As a result, companies can optimize their supply chain operations, improve efficiency, and reduce costs, all while ensuring a higher level of service for their customers.

Applications and Market Opportunities

Expansive Potential Across Industries

The potential applications for smart labels are expansive, ranging across various industries and providing significant market opportunities. ABI Insights projects the use of up to 1.5 million tracking devices in the EU and USA by 2025, with this figure expected to grow to 15 million by 2028. Specific sectors like agriculture, food and beverage, and high-value asset management stand to benefit notably from smart labels. In agriculture, for example, smart labels can monitor environmental conditions to ensure that produce is stored and transported under optimal conditions, reducing spoilage and waste.

Similarly, in the food and beverage industry, maintaining the integrity of the cold chain is crucial for ensuring product safety and quality. Smart labels can provide continuous monitoring of temperature and humidity levels, alerting stakeholders to any deviations that could compromise the products. High-value assets, such as electronics and pharmaceuticals, also require meticulous tracking to prevent loss or damage. By equipping these items with smart labels, companies can gain real-time insights into their location and condition, allowing for prompt and effective interventions when necessary.

Case Study: Mobile Network Operators

An illustrative example includes the distribution of new smartphones from central warehouses to retail outlets worldwide. Delays or loss of these shipments can result in substantial financial losses for mobile network operators (MNOs). Smart labels would enhance the ability to monitor these assets in transit, including detecting signs of tampering and validating their safe arrival. This capability is particularly important given the high value of electronic devices and their susceptibility to damage or theft during transportation. By providing real-time tracking and alerts, smart labels help ensure that products reach their destinations intact and on time.

The use of smart labels in this context also streamlines the inventory management process, as MNOs can track stock levels and make data-driven decisions about replenishment and distribution. This not only reduces the risk of stockouts but also minimizes excess inventory, thereby optimizing storage costs. Additionally, the data collected through smart labels can be analyzed to identify trends and patterns in the supply chain, enabling MNOs to further enhance their logistics strategies and improve overall operational efficiency. In essence, smart labels offer a comprehensive solution for addressing the unique challenges faced by the technology industry.

Developmental Challenges and Future Prospects

Sustainability and Environmental Insights

Despite the promising future for smart labels, several developmental challenges still need to be addressed for the technology to scale effectively. Sustainability will become increasingly important as the adoption of smart labels grows. Focus areas include improving the reusability of the labels and leveraging the technology to provide valuable environmental insights, such as tracking CO2 emissions across different transportation methods. This data can empower businesses to make more sustainable decisions and reduce their environmental footprint. Developing eco-friendly materials and components for smart labels will be crucial to align with global sustainability goals.

Innovations in recyclable and biodegradable materials are already underway, ensuring that smart labels can be both effective and environmentally responsible. Additionally, companies are exploring ways to use the data collected by smart labels to optimize transportation routes and methods, thereby minimizing fuel consumption and emissions. By integrating these insights into their supply chain strategies, businesses can enhance their sustainability initiatives and contribute to broader environmental stewardship efforts. As consumer demand for sustainable practices continues to rise, incorporating smart labels into logistics operations can also serve as a competitive differentiator and bolster brand reputation.

Battery Life and Connectivity

The article “How are smart labels going to transform supply chains and shipment tracking?” by Sharath Muddaiah, who serves as Head of Global Portfolio Strategy for IoT Solutions at Giesecke+Devrient (G+D), delves into the transformative potential of smart labels on supply chain management and shipment tracking. With the current global supply chains marked by complexity, fragility, and frequent disruptions, smart labels are positioned as an essential innovation. They promise to enhance visibility, transparency, and traceability throughout the supply chain process. Smart labels use IoT technology to provide real-time data and insights, helping businesses respond more quickly to problems and streamline operations. They can track a wide range of factors, from temperature and humidity to the exact location of shipments. This technology not only improves efficiency but also assists in maintaining quality control. As global supply chains continue to evolve, the integration of smart labels could be a game-changer in ensuring smoother operations and more robust supply chain management.

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