Smart pallet: conventional pallets get connected

The concept of a smart pallet came about from the introduction of sensors that ensure the connectivity and traceability of one of the go-to supports in logistics: the pallet. The objective? To know in real time the location of the goods, the stages they’ve gone through in the supply chain, and their storage conditions, among other details.

The need to optimize supply chain resources and cut delivery times has led many businesses to rely on automated solutions that minimize errors in storage and transportation processes.

What’s a smart pallet and what are its characteristics?

Logistics calls for solutions that make the most of a company’s resources and ensure efficient customer service. Underpinned by technologies such as the Industrial IoT (Internet of Things), blockchain, and big data, smart pallets are connected to software that supervises the organization’s logistics management. This emerging technology will bring several advantages. For instance, they’ll make it much easier for companies to more accurately monitor the status of their products.

A smart pallet is a support that incorporates sensors and a tracker to monitor its journey along the links in the supply chain. These devices enable logistics managers to know at all times the location of the goods and the conditions in which they are being stored (e.g., humidity level and temperature), among other data.

Smart pallet technology is still in the experimental phase. However, if deployed on a large scale, it would enable better product traceability and guarantee control over hygiene and safety conditions in the storage of goods. When integrated with warehouse management systems (WMSs), smart pallets provide up-to-date information on everything surrounding this logistics support.

Smart pallets help to strictly control goods movements inside and outside the warehouse. And this is precisely why this technology is on the rise. According to a study by consulting firm Coherent Market Insights, the smart pallet market is expected to grow by 4.2% per year until 2027.

The need for smart pallets

The sensors integrated in the pallet collect all data generated during the storage and transportation of the goods. This information ― i.e., location temperature, humidity level, and storage time ― allows the logistics manager to make decisions based on the real conditions of the pallet.

The implementation of these pallets is especially useful in industries such as the food, chemical, and pharmaceutical sectors, where hygiene conditions affect product quality and safety. The sensors detect changes in pallet temperature or humidity levels so that the logistics manager can move the goods before they start to deteriorate.

Investment in smart pallets tends to go hand in hand with warehouse process automation to ensure full control over inventory. Automation eliminates the margin of error due to manual intervention and, most importantly, optimizes the movements made by each pallet.

Smart pallet initiatives: iPALs

Within the framework of Industry 4.0, a growing number of companies are considering providing their pallets with connectivity to coordinate goods movements in the warehouse and have greater control over their stock.

One of the main smart pallet projects transpired through the collaboration between the European Pallet Association (EPAL), Germany’s Fraunhofer Institute for Material Flow and Logistics IML, and Deutsche Telekom, a German telecommunications company. At the International Supply Chain Conference in Berlin, Germany, these three organizations presented 500 smart pallet prototypes — iPALs — to facilitate the location of loads and protect them from possible theft. The first prototypes, developed in Deutsche Telekom’s specialized IoT laboratory, can detect their own location, monitor their movements, and gather information on any temperature changes.

Smart pallets incorporate a tracker that, via Narrowband IoT, exchanges information with the WMS. One detail of note is that the prototype has a battery life of over ten years.

The project to put iPALs into operation was launched in 2018 with the participation of numerous companies from all kinds of sectors, including chemical companies and retailers. Taking into account that EPAL has over 500 million pallets in circulation, the potential of this technology is “huge,” says Ingo Hofacker, IoT Business Manager at Deutsche Telekom. “Digitizing the EPAL Euro pallet means digitizing logistics,” adds EPAL.

Obstacles to the adoption of smart pallets

Smart pallet technology is still under development. Since it hasn’t been implemented extensively, there are still some obstacles to overcome, for example, lack of standardization. In other words, there’s no international norm that regulates the market for smart pallet sensors or that establishes a legislative framework for this technology.

Moreover, replacing conventional pallets with smart pallets involves digitizing logistics management. The best way to leverage the benefits of smart sensors on pallets is to be equipped with software capable of collecting all data produced in the warehouse and converting it into useful information for the logistics manager.

Although Supply Chain 4.0 is gaining a foothold in logistics, smart pallets are still in the experimental phase and are not yet accessible to all types of businesses.

Smart pallets: control over pallet movements

The consolidation of smart sensors on pallets will enhance technologies such as big data and the Internet of Things for the storage and transportation of palletized goods. Once established on the market, this technology will gather information on product movements, storage conditions, and pallet locations so that the logistics manager can make decisions based on the real throughput of the warehouse.

Ultimately, smart pallets are a solution for automating pallet management, reducing errors in goods transportation, and, most of all, improving companies’ logistics efficiency. If you’re interested in digitizing your logistics operations, don’t hesitate to contact us. One of our expert consultants will work with you to come up with the best solution for your business.