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O ver the past couple of years, the Internet of Things — IoT — or Industry 4.0 as

it is called in the German speaking countries, has developed into a reality that will be almost unavoidable worldwide. Whatever conference you attend and no matter which exhibition you visit, it is a fast growing, important part of the programmes and agendas everywhere.

Considering these facts, it is astonishing how few people understand what is going on and how our world is about to change. Compared to most other industries, the paper based packaging industry is currently at a dramatic disadvantage. The cause for this disadvantage is seen by experts

THE INTERNET OF THINGSWHAT’S HAPPENING IN THE PAPER BASED PACKAGING INDUSTRY?

AN ARTICLE BY ANDREAS TINGVALL, TRENECO AB

to be rooted in the distance to the technological development requirements for the creation of NFC Tags, Sensor Technology, Software and its applications on to paper and board. To my knowledge, there are hardly any producers of paper, cartonboard or corrugated boxes that has any relationship with such tech fi rms. This is the case although they are frequently asked to apply these NFC tags to the packaging solutions of their customers’ products.

This article is an attempt to highlight the signifi cance of the changes that will unavoidably affect our lives and how the packaging industry will participate in these changes.

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What does it mean?For those readers unfamiliar with IoT — explained in simple terms — it stands for the communication of any ‘thing’ with another device via the Internet, through a cloud based data storage provider, for the purpose of sharing information without the optional requirement of human intervention.

This sounds scary for some of us, yet exciting for others. We all react differently to such changes. Based on our age, education and profession, we may find this hard to understand — we question its purpose, or we may find attractive business opportunities with this new technology.

With the Internet (that has barely 25 years of public application) and the smartphones that we have used for the last 10 years, the ways that humanity communicates has significantly impacted the lives of almost everyone on the globe. The speed of these changes is overwhelming for some and exciting for many others. Most of all, we begin to acknowledge the effects of these changes as new standards to our society. Workplaces, trade organisations and government institutions adapt to these changes and even those of us who distrust technology or try to resist it, are forced by circumstances to take part. So it moves from being optional to becoming a fundamental requirement.

In countries like Sweden, the use of smartphone apps has become mandatory to buy bus tickets and for payments in stores and restaurants. Grocery stores with self scanning cash registers are more common than those manned by a person.

So the world is changing whether we like it or not.

Here is a theory commonly used to explain how new technology and changes of our daily routines are received by society.n Any technology that has been

available since before you were born is a convenience and accepted as a standard commodity in your life.

n Any new technology that enters your life before you turn 30 is usually received as something exciting. This is the dominant group that usually drives new technology towards acceptance or rejection.

n The generation of business people between 30 and 50 years old typically receives new technology with careful skepticism, but adopts once profit and opportunities become recognisable. This is the group of secondary adaptors that will start to drive market implementation through investments and high level consumption.

n Most people living outside of direct contact with a new technology or people older than 50, may be overwhelmed and try to resist changing behavioral modifications. This is driven by fear, lack of understanding, living conditions, education, culture, religion and wealth.

Change is afootThe Internet of Things will enforce dramatic changes to society and meet the same resistance or acceptance within these demographic groups as the Internet and smartphones did, just much faster and more overwhelming.

Just recently, Amazon Go opened their first shops that work without a cashier. For those of you who missed it in the news, this is a store where a shopper walks in, picks the goods, registers the purchase with a smartphone and pays via an app that releases the payment upon passing though the exit. No lines at the cash register, no cash, no credit card swipe. Just get what you want and leave. Amazon Go announced the set up of 2,000 such stores within a few years.

Those of us who are less familiar with technology may be inclined to ask; ‘How does this work?’n The first step would be to apply

an individual identity to all goods delivered to a shop. That ID can be read automatically by sensors and has the capability of communicating a status change. The technology that has that capability is called RFID (Radio Frequency Identification) and NFC (Near Field Communication). These are microchips that can be programmed and communicate over short distances by using an induction field as an energy source. The place where you may have come in contact with this technology would typically be in the form of theft protection tags in stores. This technology must not be confused with bar codes, as those are static and contain no programmable logic.

n Every item in a store would have to include such a microchip, be identified by store sensors upon entering the shelf and registered by a shopper’s personal reading device upon putting it in to the shopping cart.

THE INTERNET OF THINGS WILL ENFORCE DRAMATIC CHANGES TO SOCIETY JUST AS THE INTERNET AND SMARTPHONES DID, JUST MUCH FASTER AND MORE OVERWHELMING.

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n At the moment when a shopper selects an item and holds his smartphone close to it, two choices will be provided. You can select to purchase the item upon which your smartphone initiates a status change on the items NFC chip from ‘shelf inventory’ to ‘sold’ and adds it to your bill; or you have the option to learn more about the product in your hand by connecting to a website. If you change your mind and decide to not buy the product after you entered it to your cart, you will have the option to de-select that on your device as well. The NFC tagged product will re-enter the item into the inventory once you put it back on the shelf.

n You may have the option to use a shopping list and preselect your purchase and either find a description of where to find the items on your list inside the shop, or alternatively have your entire shopping ready for pick up on arrival.

n Once you have passed a gateway on the way out of the store, your purchase will be registered and

charged to your pre-registered credit card. The receipt is sent to you by mail. Should you have any product not registered in your bag or cart, the sensors at the exit gate will detect the status of all NFC tags and instantly inform you about it.

From here on, one or several other background activities are possible. n The stores inventory software

will know current status and may order replacement for filling the shelf.

n Your refrigerator will update its content list and put it on to your personal web based information system. Potentially you could programme a routine that initiates automatic refilling by a delivery service.

n Containers that are opened will allow you to remotely check how much there is left of its content.

n The logistic history and storage conditions such a temperatures can be traced.

n ‘Best before dates’ are registered and you will be informed of the condition of the food in your home.

Science fiction?Even if this sounds like science fiction to many, this is what will be our most likely near future in grocery supply and shopping. If you are skeptical about this prediction, you should consider the motivation that large food chains and retail companies are having by introducing this system to the stores.n Every day, grocery stores have

to dispose of large quantities of food due to expiration dates or its campaign based specifics. By having real time information about the inventory and comparing it by using software that traces consumer behaviors continuously, stores can now optimise their inventory and save tremendous amounts of money.

n A smaller number of people will be required to work on cash registers, while exiting the store will be faster for the shopper. Goods taken off the shelf, placed in to the carts, on to the conveyor and then in to the bag after paying, will now only have to be touched once by the shopper. Your summarised bill will be instantly visible to you during the shopping process.

n Cost intensive cash handling is reduced for all participants in the transaction.

n Consumer behavior is registered and enables instant customised communication between the shopper, the retailer, the logistic chain and the producer. Alternative product recommendations and promotions are transmitted to appear on your smartphone during the shopping activity.

EVEN IF THIS SOUNDS LIKE SCIENCE FICTION TO MANY, THIS IS WHAT WILL BE OUR MOST LIKELY NEAR FUTURE IN GROCERY SUPPLY AND SHOPPING.

About fantastic machines.

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Fact or fantasy? ___________________

Once upon a time there was a wondrous machine that was very efficient, long-lasting, virtually ran by itself and hardly cost anything. A fabulous creation. Dreamers rejoiced in it. Successful businessmen on the other hand had a Göpfert.

It would be too good to be true that performance has no price. In contrast the price of goods that do not serve their purpose is always too high – however cheap or tempting they may seem. Göpfert customers have counted on superior designs for decades, and are still producing with them today. And tomorrow. And the day after tomorrow. And they will live happily ever after.

The Göpfert Evolution HBL:It was, is and will remain: the reference.

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n In the crowded cities that already are the home of more than 50 per cent of the worlds population, shopping requirements can be automated to fi t urban lifestyles. Such automated refi lling services represent value adding business opportunities.

n For healthcare, the use of NFC tags can make the difference between needed prescription drug use and actual purchased medicine ending up as waste. This is not even taking in to account the potential life saving aspects of drug availability. One of the companies that are on the forefront of applying NFC tags to packaging is Thin Film Electronics ASA from Norway. At Jones Packaging Inc, in Canada, Thinfi lm’s Open Sense™ NFC Tags can be applied to pharmaceutical packaging at a rate of 15,000 pcs per hour.

Big businessApple, Cisco, Wal-Mart, Microsoft, Intel, Siemens, SAP, Samsung, GE as well as many other signifi cant tech companies have currently invested in excess of $200 Billion in IoT based technology development.

The predicted revenues to be generated by this technology over the next fi ve years will exceed those generated by the Internet and Smartphones together by a factor of eight.

As a consequence, we must understand that the reward for pursuing a participation in IoT based technologies is too big to ignore for almost all packaging companies worldwide. The economics at hand will drive this through gradually, not-withstanding the resistance coming from its critics.

Although this article is focusing on commodity, everyday products, it is clear that it will affect all goods

produced, packed, used, shipped and consumed in the very near future.

This is where the packaging industry comes in. Foods in particular are the most obvious things where NFCs and RFIDs must be applied on the packaging material itself. There is not a single multinational food producing company that does not have this on their agenda. Consequently, packaging producers must be ready to meet a fast, growing demand.

For someone who has a background in electronics, a long history with packaging producers and experience with production machinery, one can not ignore the lack of coordination between the parties involved with this dramatic change in packaging application. Packaging has the opportunity to move from passive to active participation in the supply chain — and by doing, so provide tremendous added value.

THE ECONOMICS AT HAND WILL DRIVE THIS THROUGH GRADUALLY, NOT-WITHSTANDING THE RESISTANCE COMING FROM ITS CRITICS.

ACCORDING TO EXPERTS, THE DEMAND FOR NFC TAGS IN FOOD AND DRUG PRODUCTION WILL GROW FROM 600 MILLION UNITS IN 2016 TO FIVE BILLION UNITS BY THE END OF 2017. BY 2021, THE PREDICTIONS ARE SHOWING A DEMAND FOR 50 BILLION UNITS FOR EUROPE ALONE!

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To overcome the obstacles, packaging companies must consider the following:

n The electronics tech companies that drive the development of microchips and its application have very limited understanding of the packaging industry. Although they understand the needs expressed by the retailers and food producers, they know nothing about web based paper packaging production methods or how to include NFC tag application to the production processes.

n The packaging manufacturers have limited understanding of the technologies required to apply NFC tags to their packaging solutions. As a result, demand is complied with, by adding manual processes to the production. This in return results in market entry barriers caused by volume costs. The learning curve for the industry is slow and inconsistent.

n Production machinery suppliers are left out of the discussions between food brands, retailers and packaging producers. Most machinery suppliers known to the packaging industry have made negligible investment in the automation of NFC tag application. Given the high investment cost for the integration of NFC tag application, they will wait as long as possible for their customers’ definition of needs rather than pursuing own ideas.

n The impact of NFC tags to the recycling of paper must be both understood and considered.

n The paper based packaging industry is generally lacking electronic and software experts that can drive its qualified participation. Training and education on the subject are in demand everywhere.

As there is very little ongoing dialogue between the stakeholders of this important change in the packaging industries, we must find ways to get them all on board.

According to recent studies, 77 per cent of business owners, Board of Directors and senior stakeholders understand and agree with what is happening with the implementation of IoT to their industries. But only 17 per cent of the workforce agrees and understands what that means for their workplace. There is a tremendous gap between the initiators and the executioners of this

shift in production technology and in the logistic chain.

The interwoven dependencies that enforce their consequences to the stakeholders in paper based packaging and IoT must come together and start working on solutions that are cost effective, practical and sustainable for all parties and the consumer.

At this point in the race for best application, best business solution, environmental impact and smartest technology compares to a situation where all participants are showing up at different times, at different

WE ARE BUILDING THE BRIDGES BETWEEN STAKEHOLDERS IN NFC APPLICATION AND PAPER BASED PACKAGING SOLUTIONS.

places with different vehicles and unqualified drivers. No wonder, this is why we are watching a chaotic race with no rules applied and a lack of understanding for most of those who participate.

It should be the obligation of the industry’s leaders and their associations to take charge and initiate the standardisation processes that make the unavoidable changes both bearable and profitable. At the same time, we must remind the tech giants about the complete supply chain in packaging and how their vision can benefit all of us.

Last but not least, the paper based packaging industries must learn how they can benefit from understanding the added value that comes with traceable intelligent packaging solutions. The packaging producers have an opportunity to become the driver for solutions rather than just being the executioners of demand. Since the first time a box was printed, the application of NFC tags represents the highest value-added feature put on to a box in a hundred years. In addition to the customer’s benefit, it represents a tracing opportunity for the packaging producer as well. The dual benefit of this added feature opportunity has not become a subject of consideration anywhere yet. Consequently, there is much to gain from organising standards and pursuing the dialogues required.

The open questions requiring discussions and solutions could be seen as:n NFC tag technology — what is

the status regarding industrial application?

n Where is the current unit price for NFC Tags?

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n Sensor technology and software?n Suppliers! Who, what, when

and how?n Standardisation of information —

what are the requirements of the stakeholders?

n Dual NFC tag application on product and transport packaging?

n Warranties and confidentiality of information?

n Status and liabilities?n Benefits and features?At Treneco AB, we understand the future of packaging. We are building the bridges between to stakeholders in NFC application and paper based packaging solutions. In dialogues with clients, we are finding a starting point where

the simple education about IoT technologies and their practical use in the packaging industry can trigger a change of mindset. Without understanding how and where IoT applications can create a benefit for their customers, what technological conditions must be created and how to make sure these conditions can be maintained, the packaging industry may loose a valid opportunity for creative participation. Current estimations predict that about 10 per cent of the workforce in industrialised countries will experience significant changes due to IoT implemented changes by 2021. Have you thought about how this will affect your company? n

About the authorAndreas Tingvall is the Managing Director of TRENECO AB located in Gothenborg, Sweden, with branches in Germany and Poland.

SIMPLE EDUCATION ABOUT IOT TECHNOLOGIES AND THEIR PRACTICAL USE IN THE PACKAGING INDUSTRY CAN TRIGGER A CHANGE OF MINDSET

Information and training seminars are planned at a number of locations throughout Europe during the course of 2017. Feel free to contact them for bookings. For upcoming schedules visit www.treneco.com

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