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Let your product do the talking: the rise of smart labels

Technologies from Avery Dennison, IBM and a Kodak-backed startup could usher in a new era of supply-chain transparency.

Smart labels tell a product’s origin story, right down to where it can be laid to rest responsibly. Software maps supply-chain journeys automatically, reducing the potential for counterfeit. Invisible, digital ink that validates provenance.

Just a few years ago, technologies such as these were the realm of science fiction. Now, they’re making their way into the real world.

Within the next three years, for example, more than 10 billion apparel and footwear products will carry tags that can be used to communicate information such as the materials in them, where they were produced and how they can be recycled or passed along. They’ll look similar to existing labels. Consumers will use their smartphones, tablet computers or other mobile devices to retrieve the data that the manufacturer has chosen to disclose.

It doesn’t disrupt what manufacturers are already doing.

This breakthrough in transparency is made possible through a partnership between Avery Dennison, the $6.3 billion global packaging company, and EVRYTHNG, a technology company that sells software for managing data related to the “Internet of things” (IoT)— the broad term used to describe devices that are capable of communicating information that can be used for a variety of business applications. Avery Dennison will manage this data as part of its Janela Smart Products platform. The plan is to bring this technology to a “minimum” of 10 billion products within three years, which would represent the world’s largest IoT network.

The beauty of this approach is that it builds on existing relationships. “It doesn’t disrupt what manufacturers are already doing,” said Kim Schneider, senior director of technology solutions for Avery Dennison. “Only now they can drive interaction with consumers.”

Manufacturers will pay a fee to have information hosting on the Janela service, which will make it available to buyers who want more details about a product either at the point of sale or even within their own closet. “More engagement means more insight,” Schneider said. 

Avery Dennison hasn’t disclosed the names of any retailers or apparel companies that have adopted this approach, although several pilots are in progress, she said.

Seeking validation

 Another new initiative sustainability strategists and supply chain executives will want to watch closely is being driven by IBM, which is testing a cloud service that enables organizations to make use of blockchain, a data encryption and transaction processing technology that can be used to track and validate goods as they progress from company to company or from location to location. 

London-based Everledger, which sells a system for tracking and verifying diamonds, is using IBM’s blockchain service to test and refine its own offering. “When you are in the business of provenance, secured records, access and transparency are everything,” said Everledger founder and CEO Leanne Kemp, in a statement. “There is no compromise when It comes to security and one cannot underestimate the expertise required to enable this.” 

Blockchain will change the way we transfer high-value goods, digital assets and financial instruments.

Right now, IBM’s service is in “limited beta” but it is encouraging organizations to become more familiar with blockchain. “Blockchain will change the way we transfer high-value goods, digital assets and financial instruments,” said IBM Fellow Donna Dillenberger.

It turns out the imaging pioneer Eastman Kodak (yes, the same 126-year-old company that revolutionized photography) is also experimenting with digital approaches to verify the product origins. It’s an investor, along with Chinese e-commerce giant Alibaba Group, in a Miami-based startup called eApeiron that has made it a mission to combat counterfeiting. 

The approach uses digital watermark technology that was originally developed by Kodak. The image, placed on the product, isn’t something that is readily detectable to the naked eye, but it gives each item a “unique signature” by which it can be tracked and identified using a smartphone app. The company pitches its technology as mainly a hedge against counterfeiting, but it could easily be adapted to applications that validate manufacturing origins or materials.

So far, the venture has been mum about who is using its technology but in a video on its website it says that several large pharmaceutical and tobacco companies are early adopters.

Another startup, Etology, is using RFID tags to connect consumers and businesses with a database of ingredients and disassembly steps. Founder and CEO Natasha Franck, one of this year's GreenBiz 30 Under 30 list, said the technology can help ensure that materials go to their highest, best use. "The idea of material reuse is really a next step of the sharing economy, how to level the limited resources we have to serve more people," she said.

Etology is already piloting its technology with major brands; its first focus will be on sustainable apparel and consumer packaged goods, as well as the electronics and auto industries. The company is also partnering with circular economy leader the Ellen MacArthur Foundation.

Two other companies working on technologies for providing deeper visibility into what's inside products are VerifyMe, which inked a partnership with printer giant HP Inc. in May, and YPG Group, which is working on “covert markers” that can be designed to blend in with the product they are tracking.   

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