International Paper and Motorola Agree to Use 'Smart Packages'

SCAN THIS NEWS 4/14/2000 -----Original Message----- From: believer@telepath.com [mailto:believer@telepath.com] Sent: Friday, April 14, 2000 Subject: 'Smart Packages': Int'l Paper & Motorola Agree to Use "Smart Package"

COMMENT FROM SOURCE: Consider if this type of a token is used for documents such as drivers licenses. Remote reading of the ID and other possibilities.

FORWARDED MATERIAL: From the Wall Street Journal April 13, 2000 [Tech Center] International Paper and Motorola Agree to Use 'Smart Packages' By DEAN STARKMAN Staff Reporter of THE WALL STREET JOURNAL International Paper Co. and Motorola Inc. agreed to a groundbreaking deal to put microchips in the packaging concern's boxes, a big step toward eliminating bar codes and ultimately bringing the entire manufacturing supply chain online.

International Paper agreed to use Motorola's "BiStatix" chip in some of the 8.5 million tons of corrugated crates, glossy perfume boxes and other packages it makes annually. The "smart packages," the first of which are scheduled to roll out by year end, will allow manufacturers to track individual packages as they move from the assembly line to delivery trucks to store shelves to checkout counters.

Unlike bar codes, the chips can be read from any angle, don't need to be in a reader's line of sight, hold much more information and allow that information to be changed en route. Smart packages "will bring massive efficiencies to the global supply chain," said Kevin Ashton, director of the Massachusetts Institute of Technology's Auto-ID Center, a project aimed at coming up with standards to replace bar codes.

Initially, the packages will help manufacturers track inventory and foil counterfeiters. Within a few years, though, the boxes will allow consumers to breeze out of stores with barely a pause at checkout counters, while store shelves signal to factories to replenish supplies. The 'Smart Tag' How it Works

* The device is a tiny silicon chip placed between lines drawn in "conductive ink," made with carbon. Radio signals from an electronic reader boot up the chips, which receive or relay information to a computer. Features

* The tags can be read after being mishandled.

* The ink can be drawn to make the entire box an antenna.

* The tags can be read at any angle.

* Tampering with the box breaks the antenna.

* The chips provide for real-time tracking at all points of supply chain.

Ultimately, the "smart tags" are aimed at making possible a brave new world in which a food package will tell the fridge to order another carton of milk from the online grocery store. "The technical challenge is real, but I don't think it's large," said Peter Lee, International Paper's vice president of research and development.

"The real challenge is in discovering the applications." Terms of the agreement, including how many chips International Paper will buy, haven't been worked out, officials of the two companies said. Potential users of smart boxes include International Paper's largest consumer-products customers.

Three of them, Procter & Gamble Co., Cincinnati, Unilever NV, the Netherlands, and Philip Morris Cos. of New York, are partners with International Paper in the MIT project. Landing International Paper is a coup for Motorola, Schaumburg, Ill. Based in Purchase, N.Y., International Paper is the world's largest forest-products concern and has about $25 billion in annual sales, with about $7 billion of that from packaging. Its electronic packaging initiative is part of a broader push to lose an image as an underachiever in the industry.

The Motorola chip, which looks like an ink blot on paper, is made of a silicon chip the size of a pinhead, which sits between lines of carbon-laced ink that serve as an antennae. Both are attached to a stamp-sized platform and then attached to a larger tag. As they are passed in front of electronic readers, the smart tags power up and can receive or relay information that is sent to a computer and then to the Internet.

The new chips cost "substantially" less than $1 each, Motorola says, but that still makes them too expensive for all but higher-cost items, like perfume or electronics gear. Motorola hopes eventually to lower the cost to less than five cents each, making the tags feasible for, say, a box of Tide detergent.

"That's the Holy Grail," says Grant Milner, Motorola's director of business operations for BiStatix products.

Write to Dean Starkman at dean.starkman@wsj.com Social security is the bane of individual liberty. - SAM ======================================================================

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