Embedded Chips to Make Packaging 'Smart'

FRAMINGHAM (04/18/2000) - International Paper Co. and Motorola Inc. said last week that they have agreed to manufacture "smart packages" designed to enable manufacturers, distributors and retailers to improve inventory control throughout the supply chain.

Tiny silicon chips embedded in the packaging will contain information that can be read and modified through a wireless interface. The goal is to enhance inventory control and security through improved identification, routing and tracking of products. A unique identifier placed in high-value consumer goods such as perfumes may also protect against theft and counterfeiting.

The smart packages are based on Schaumburg, Illinois-based Motorola's new BiStatix radio frequency identification technology, which combines silicon with printed ink. While current bar-code technology enables packages to be tracked through scanners, smart packages will emit radio signals enabling manufacturers and retailers to track them continuously as they move from factory floors to retail stores and checkout counters.

"The breakthrough here is the marriage of electronics and paper, which will produce huge customer service enhancements while virtually eliminating much of the supply-chain inefficiencies now burdening manufacturers and retailers," said Bill Slowikowski, senior vice president of consumer packaging at International Paper in Purchase, New York. He added that in the U.S. alone, there is an estimated $250 billion in yearly waste attributable to inefficiencies in the distribution of products from manufacturers to consumers.

Retail counterfeiting was responsible for approximately $70 billion in U.S. industry losses last year.

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