FRAMINGHAM (04/13/2000) - International Paper Co. and Motorola Inc. announced today that they have agreed to manufacture "smart packages" that were 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 by 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 Motorola's new BiStatix radio frequency identification technology that 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.
Because BiStatix technology uses silicon and printed ink, smart labels are more cost-effective than earlier technologies, which required the incorporation of a costly metal coil and resonant capacitor. They can be printed on paper and easily integrated into existing printing processes. Smart labels can be read after being folded, crumpled and even ripped, and also are fully disposable.
International Paper will be the first global producer of packaging products to adopt the technology for retail, pharmaceutical and food services customers.
A spokeswoman for Schaumburg, Illinois-based Motorola said the companies plan to begin shipping the smart packages by the end of this year.