The past few years have highlighted the fragility of global supply chains, with disruptions having far-reaching impacts on industries worldwide.
While supply chains are continually evolving in response to the shifting commercial landscape, rapid inflation, geopolitical uncertainty, extreme weather, and COVID-19 have all contributed to an unprecedented period of volatility, with a wide array of attendant challenges for businesses and operators. In such a tumultuous world, the need for supply chain resilience and efficiency is greater than ever.
Mitigating risk and reducing disruption requires a multifaceted approach. Diversification of suppliers is essential; relying heavily on a single supplier or a limited geographical area increases vulnerability. By diversifying their supplier base, companies can reduce dependency on any one source and be better prepared to tackle location-specific disruptions.
Localised manufacturing is another key consideration. Manufacturing closer to end markets can reduce dependency on global supply chains and transportation routes, allowing smaller, more flexible production facilities to adapt quickly to local demand.
The integration of advanced technologies is also key. The ability to accurately track goods in transit is vital – particularly when delays or shortages occur. Determining exactly where disruption has taken place can help avoid delays that cascade through the system.
Smarter supply chains through intelligence
Embedding intelligence into products allows real-time tracking and management of goods, helping to predict disruptions, monitor goods, and optimise logistics. But there are several hurdles to overcome to achieve ubiquitous connectivity.
First is cost. Smart functionality typically relies on silicon semiconductors – otherwise known as microchips – but it’s expensive to add a silicon chip to each and every item in the supply chain. The long lead times and high costs associated with standard chip design mean that it is best reserved for creating complex, hi-spec chips in applications that demand commensurately high performance. However, this means that production is rarely agile, and rapid customisation is not an option. Yet the value of the intelligence must outweigh the cost of implementation – and it must be quick and easy to deploy.
Environmental impact is also a consideration: current production of silicon-based semiconductors uses vast amounts of water and energy, and up to 30 different process gases, many with considerably higher global warming potential than CO2. Their production also involves shipping the various components around the globe to areas of expertise, which slows production and increases carbon emissions.
Unlocking the next generation of chips
Non-silicon semiconductors – chips that use new, advanced materials – have the potential to change the narrative around item-level intelligence, unlocking the potential for implementation at scale.
These new materials allow for simplified production processes at much lower temperatures than silicon, consuming significantly less energy and water, and fewer harmful chemicals. This
both drives down cost and reduces carbon impact, making low-cost, sustainable, item-level intelligence a reality. It also allows end-to-end production at a single site. As a result, production is significantly faster – typically just a few weeks, compared to the months of standard chip production – making customisation rapid and agile.
These advanced chips are ultra-thin and also physically flexible, making it possible to deploy them almost anywhere – from clothing and textiles to bottles or coffee cups – with few constraints on form-factor.
Embedded directly into packaging, they’re imperceptible to the touch. They don’t encroach on product branding, can’t be covered or replaced – and are robust enough to withstand the rigours of transportation.
This low-cost technology makes it viable to add intelligence to high-volume products, making insights available to retailers and increasing widespread adoption.
Scaling up item-level visibility
The benefits of implementing item-level intelligence in the supply chain are numerous and transformative, leading to increased efficiency, transparency, and adaptability.
Advanced material microchips, in combination with sensors and RFID tags, allow end-to-end visibility of individual items as they pass through the supply chain, enabling monitoring of precise location, movement – and even condition – in real time.
This level of transparency allows businesses to reduce the risk of loss or theft, identify bottlenecks, optimise inventory, and monitor transit conditions such as temperature and humidity, ensuring quality control and minimising waste.
Monitoring individual items, rather than relying on aggregate stock data, reduces the likelihood of overstocking or stockouts, and allows just-in-time inventory systems to reduce carrying costs and increase cash flow. Rapid identification of delays – from production slowdowns to transportation issues or customs holdups – means disruptions can quickly be traced to their source, and corrective action taken.
These advanced material chips can also support the transition to more circular supply chain models, where products and materials are reused, recycled, or remanufactured rather than being discarded after use. They also enable easier post-sale returns and product refurbishment, boost recovery of materials and improve recycling accuracy, allowing for more sustainable consumption.
Affordable, item-level intelligence also plays an important role in the consumer experience, verifying product authenticity and preventing counterfeiting – crucial in industries such as pharmaceuticals, luxury goods, and electronics, where fake products could pose significant risks.
But it can also be used to deliver a richer, personalised experience, from real-time visibility of order status, to tailored content served up at the tap of a smartphone. As well as delighting consumers with an interactive experience tailored to factors such as their location, time of year or previous interactions, brands also obtain first-party data to inform future content and campaigns, further driving consumer loyalty.
Low-cost, low-carbon connectivity
In short, advanced material chips have the potential to revolutionise supply chain management through low-cost, low-carbon connectivity, delivering unprecedented visibility, control, and adaptability.
From enhancing inventory management to improving customer experience, the ability to track and monitor individual products throughout their lifecycle creates more efficient, responsive, and sustainable supply chains. As companies continue to face evolving challenges and market demands, the adoption of item-level intelligence will become an essential strategy for building more resilient, secure, and agile supply chain systems.
About the Author
Shane Geary is Executive Vice President, Manufacturing and Operations at Pragmatic Semiconductor. We’re doing semiconductors differently. We’re making them flexible. And sustainable. And we’re making them at speed and scale. We’re empowering innovation to bridge physical and digital worlds, accelerate our customers’ success and positively impact people and planet.
