„Tracking Brings Previously Unknown Transparency“

The demands placed on packaging have changed significantly in recent years. Above all, the strong growth of online retailing and the overriding issue of sustainability demand new solutions in packaging logistics.

The digital watermark is hidden invisibly for the customer in the color print of the packaging. HolyGrail 2.0 is the name of the concept that consumer goods manufacturer Procter & Gamble is currently testing. The watermark will later make it easier to sort plastic packaging for recycling. „Packaging is a resource, and in use it is far more than simply outer packaging for products,“ says Ingo Schimmelpfennig, Managing Director of Production & Logistics at Procter & Gamble. Digitization helps to make better use of these resources – and also to make logistics better. Schimmelpfennig names the challenges: It’s the reduction of increasingly expensive cardboard packaging while at the same time improving the utilization of pallets or other goods carriers, but especially of trucks, warehouses and storage spaces.

That’s why Procter & Gamble now uses smart reusable transport packaging. Instead of using these only for transport from the manufacturer to the retailer, in the future they will serve as a source of information using QR codes and RFID technology. „This gives you information about how fast products are turning, among other things, without the need for point-of-sale data,“ explains Schimmelpfennig

What packaging must do is undergoing a transformation. One important reason is consumers. These have increasingly high demands on packaging, notes Dr. Kai Hudetz, managing director of the Institute for Retail Research (IFH) Cologne (archive photo). „There should be as little packaging as possible. The packaging should be sustainable, it should still protect the goods, hygiene should be observed and then it should also look nice without incurring additional costs.“

But it’s not just the demands of customers that have changed, but also the market as a whole. According to IFH Cologne, online retail in Germany grew by 23 percent from 2019 to 2020. Between 2020 and 2021, it was another 19.1 percent. This is also changing the demands on packaging and its disposal. To meet the ongoing trend toward sustainability, packaging and logistics must be thought of together even more than before.

Digital technologies can help master the new requirements. „What we still formulated as a vision of the future in the early 2000s has long since become reality,“ Hudetz knows. „Tracking brings previously unknown transparency about where products are at any given time. That’s important for mapping supply chains.“ Many consumers also want to know whether a company has adhered to sustainable standards during production, whether ecological concerns have been taken into account, and whether child labor has been excluded. „Digitization can help here and provide additional information online,“ says Hudetz. The technology for this has long been available, he adds. „QR codes have been established since the pandemic. Certificates can be stored via a tamper-proof blockchain.“

Scaling through partnerships and standardization

For Schimmelpfennig, it also makes sense to build scalable structures in the market. „You have the most leverage when you work together in partnerships.“ P&G therefore cooperates on many technology topics with renowned institutes and independent organizations such as the Fraunhofer Institute, GS1 and various universities. „In retail logistics, due to the dwindling resources of people and materials, there should be even more joint work in the direction of technology in conjunction with sustainability,“ Schimmelpfennig demands. Even today, there are still companies that shy away from investments and the implementation of innovative standards in a sustainable future strategy. In some cases, this slows down the roll-out speed, despite the standards set by GS1. „Nevertheless: we continue to rely on partnerships, and we also see in many areas that we are making progress together.“