Hype: typically it’s a negative thing. But for those tired of hearing about the next big technology, keep reading. Why? Because the Internet of Things (IoT) is changing the ways of the retail and manufacturing industries.
Dubbed ‘Industry 4.0’ in Germany for its potential to spark a new industrial revolution - IoT describes an environment where barcodes and smart sensors connected to objects give those objects a ‘digital voice.’
It’s a voice that allows them to connect and share data with one another – and the back office – over the internet. Pretty much anything can have barcodes or sensors attached to them, from people to vehicles, to pallets, to individual products, to name a few.
Data captured from these sensors flows around businesses in real time, providing them with immediate intelligence to see, and make better decisions around the status of their manufacturing lines, what’s selling, delivery performance, the success of marketing and much more.
But what is most interesting, is what IoT can do to help tackle some of the most pressing current challenges: food waste, fraud and changing consumer expectations around product information.
A jaw-dropping issue: While the waste of perishable goods is something that retailers are well aware of, recent figures reveal the extent of the problem. Around a third of what is produced is wasted – that’s 1.3 billion tonnes of food with a value of $750 billion a year.
Put another way, in 2007, 3.5 billion acres of land – bigger than Canada – was used to grow crops that no one ate.There are a number of factors at play here but retail could account for as much as 25% of this figure through food loss in the supply chain.
In addition to the waste issue, businesses are seeing a change in consumer expectations when it comes to product labelling. People are more interested in where their food came from and how it was grown, harvested, manufactured into a food product and shipped to shop.
Some shoppers are even using their smartphones at the deli counter and scanning barcodes. This trend will continue and may well become normal behaviour in the not-too-distant future.
In Europe, it doesn’t take looking too far back to see what has sparked this change in behaviour: concern over food safety. The horsemeat scandal is fresh in the mind of consumers and shows how, in an extended supply chain, it’s easy for fraudsters to pass off fake ingredients as the real deal.
Looking more widely, for instance to China, figures show that 70% of people are not confident in the safety of food supply.
So, how can IoT address these issues?
Seeing more, everywhere, with IoT: By increasing visibility of products across the supply chain, IoT can improve traceability from farm to fork, reduce fraud, meet consumers’ expectations for greater transparency and create new marketing opportunities.
From farm to fork: Tracing from farm to fork has been a big issue for a long time and IoT can help truly make it happen. Using barcode labels fixed to products, or RFID labels fixed to pallets (and read in batches by fixed readers), businesses can more easily trace products as they flow through the supply chain. A general rule of thumb is to use as many stages and gates as possible.
A 2D barcode can be created as soon as a product is harvested and then that code can be scanned and, if necessary, the data associated with it, updated at every stage and gate it goes through. From the farm to its arrival at a processing plant; then out to delivery to businesses, or wholesalers; then from the wholesaler on to business warehouses. The more gates businesses have, the greater their visibility.
When items reach the business, they are then scanned into their warehouse and checked against the flat file sent from the supplier or wholesaler. Encouraging farmers to barcode-label produce as soon as it’s picked or culled is one area where there’s significant room for improvement. This will be a major change for many suppliers and businesses may need to help them through this process.
What do you need?
Deploying IoT technology is relatively simple. As far as possible you need to try to provide internet coverage across your supply chain. You can knit this together by installing Wi-Fi not just in your fulfilment centres and warehouses but also at farms. Where you don’t have wireless coverage – e.g. as delivery vehicles move across the country – you can use 4G networks.
You can reduce 4G bills by using simple data files to the back office. We also advise installing sensors and RFID in trucks that can continuously pass back status info on products – e.g. temperature.
Barcode or RFID labels that include product detail need to be placed on all items and these can then be tracked using handheld or fixed readers across the supply chain – from the farm, to processing site, to wholesaler, to your depots and on to your shops and warehouses.
You will need a variety of scanning devices –-capable of being used on the road, in the cold store, outside, in busy warehouses and more and, at Zebra, we provide a model range to cover all these requirements.
or example, advising them on which barcode systems, printers and scanning devices sync best to their already existing systems to ensure seamless connectivity with their ERP and supply chain apps.
Also, (see box out) by installing smart sensors in their own trucks, or asking third party logistics providers and their wholesalers to do the same with their fleets, businesses can gain much deeper insight into how perishable goods have fared across the supply chain. Businesses can instantly see any problematic or prolonged changes in temperature.
They can also infer from the data how drivers are working and encourage best practice (i.e. ensuring cold store doors are always kept closed) to optimise transit conditions.
Be more transparent: The latest GS1 2D barcodes can include much more information. Businesses can use this space to not only track their goods through their supply chain but inform consumers too.
Data, including the source of a food, how it was produced and when, can be included and revealed using a simple smartphone app. So the consumer can see that the 28-day-old cut of beef that they are looking at really was culled 28 days ago. Businesses can even include some information on their progress through the supply chain.
Up sell and engage consumers with your brand: The notion of consumers scanning barcodes for information with their smartphones is now reality creating a new era of smart retailing. This provides the opportunity to include (or link to) recipes within ingredient listings to encourage people to try new things and buy additional products. Businesses can also offer complimentary products as part of the recipe deal to build loyalty and encourage shoppers to engage with their brand.
Slash fraud and limit losses on defects: A company’s way of barcoding can be unique to their business. Therefore, any attempt to replicate their labels to get illegal foods into the supply chain will become much, much harder.
What’s more, there’s a knock-on benefit too. Tightly tracked batches of goods can be easily located. So if there’s an inadvertent food issue (e.g. a crop spray problem) businesses can easily locate and recall, or destroy, just the batch in question.
The billion-dollar dividend: So what improvements can businesses expect from IoT? Scope for fraud can be slashed immediately and, if they start to communicate via barcodes with consumers, they’ll be a leader in an area that will become more important as people’s confidence and trust in their brand becomes as – or more – important than price in determining purchasing.
But the biggest gain is in the supply chain. By ensuring the better management of temperature of perishable items in transit, there have been cases where customers add two days on to their sell by and use by dates.
In terms of cutting waste across the industry, that could add up to savings of hundreds of millions – perhaps even billions – of dollars. This big focus on the issue of food loss, leaves no doubt that IoT is a technology movement that lives up to the hype.
Sourced from David Stain, Industry Marketing Lead for Manufacturing and Field Mobility, Zebra Technologies