COSMOFACTORY

Deanna: [00:00:00] This episode is about the internet of things. It is about serialization technology, about traceability for both the raw materials and ingredient supply chain. And for finished goods, it's about transparency, efficiency, safety, brand loyalty, and more On today's episode of Cosmo Factory, I am speaking with Maria Fernanda Hernandez Franco, sustainability Director at Tamara Maria Fernando, welcome to Cosmo Factory.[00:01:00]
Fernanda: Thank you so much, Deanna, for having
Deanna: Yeah, you're welcome.
Fernanda: you for your audience as well.
Deanna: Of course. Yeah. I'm sure we're all excited to listen to your insights today. To get started, I wanna talk about the fundamentals of radio frequency identification, tech, as well as blockchain. Will you help us understand the basics of RFID and blockchain?
Fernanda: Of course. So radio frequency identification. It's, uh, the short of RFI that you would, that you would hear it often. And it's a long proven technology that allow us to track physical items using tiny chips that emit a radius signal. So most people now use it a form of RFID in an in, in a form of RFID that is called NFC.
Near field communication. So you will see it when you tap your phone or your card while you're paying something. So what's powerful about RFID is that it's already used [00:02:00] to track physical items,
Deanna: Yeah, perfect. You know, I, I always like to think that the more we know about a technology, the more effectively and creatively we can make use for it. So I think it's really helpful that you share that with our listeners who might be learning. Along with me, uh, we need a little bit of a foundation.
Fernanda: Okay. So if you want to share a little bit more,
Okay, so, uh, the, the, these chips are really interesting because they don't require a battery, don't track well dormant and are activated when a reader comes near each one carries a unique ID and is encrypted.
So what's really powerful of, uh, about our FID is that it doesn't require a line of sight. So you can read hundreds of stacks just in seconds, even through packaging or containers. It's already. Widely used in fashion for garments, but could be really interesting for products like cosmetics and fragrances, where as you know, batch control, origin verification, and inventory position are [00:03:00] critical.
Deanna: And your personal expertise is what we think of as ethical business. Of course. As your, as your job title suggests, sustainability, uh, is very much your focus in the business. I know the company you work with does specialize in this serialization technology and traceability that we're starting to understand, and specifically for luxury goods.
So before we get into cosmetics, personal care and fragrance, I'm hoping you can share an example. Of how this technology is used for sustainability purposes in particular in another sector. Maybe it's luxury fashion, as you've mentioned a few times, maybe it's jewelry or gemstones. But help us, help us think about, um, the sustainability uses of this, um, in, in industry
Fernanda: Of course if I will add, because I think that, uh, something that was missing in the last question that would be interesting is just like, like really briefly to speak about blockchain
Deanna: uhhuh.
Oh, absolutely.
Fernanda: Because, you know, I think the blockchain to do our FID creates a, a really a special thing. So the blockchain, [00:04:00] well, I am not by no means expert, uh, blockchain expert, but I will give like a high level so it we can understand the importance for these technology for our industry.
So blockchain is a form of the centralized technology that gives a sort of security and transparency levels by design. So when used for supply chain traceability or product owner ownership, it's a living digital record of every transaction on the product's life. So whether it's raw material, sourcing, manufacturing, shipping, or product ownership and resale.
So. What is interesting is the data on a blockchain is immutable. It cannot be altered, and it's visible across distributed network. So what is important, the mix between the RFID and the blockchain because. It in offers an incredible, robust foundation for traceability, transparency, and product [00:05:00] authentication.
And this is where we at Tamara and our blockchain partners like Ora Blockchain Consortium, combine to deliver immutable product lives. I call information
Deanna: I, if I may, and maybe this, maybe this is just for my imagination, but I did see, um, sort of an analogy once helping explain blockchain. 'cause I think it can be. A lot to get our head around. I, I think some people explain it as if you print the same book right, thousands of times and distribute it around the world in bookstores, in libraries, of course people have it in their homes.
And then in the event that someone sort of wants to hack this book, right, they would, you know, need to go into my house and tear that one page out of the book and change it. And we might be able to see that that page was changed, but then we could look around the world, right at all these other copies of the exact same book and see that the data had been corrupted.
And I think that's a little bit what's going on with blockchain, but in a much more sophisticated way.
Fernanda: great [00:06:00] example actually. It's a great example because it makes it really easy to understand something that might, might, might feel like it's really complicated, but it's properly, that is said well to, you know, to secure and to block. Information. So is what it's important, is the backbone as well of, of the data that is blocked.
Because of course, if you don't have the right information, it doesn't work. You need to have the right information to be blocked, to be protected.
So a good example on, on, on the fashion industry is what we, uh, work with our client, Agne Studios in the fashion industry. So they, they came to us with a really clear goal that was to bring transparency to their product lifecycle. So we helped them to launch the digital product passport across the complete range of garment and accessories.
It, starting from the fashion Winter 25 collection. Each piece now features a cure code that. Realize that it, that shows immediately [00:07:00] verified information from raw material, supply chain traceability, sustainability certifications, and even care info, and it's all about making the invisible visible. And these was a really great example because at uh, our point of view is a great engagement of our brand to provide a digital product password from each piece, not just a pilot, not just a capsule collection, but properly for every single item.
Deanna: Mm-hmm. No, that's impressive. Let's think about the beauty industry, of course, because here on Cosmo Factory, that's what we do. Um, what are some of the most valuable and impactful ways you think this technology can help with sustainability in our industry?
Fernanda: Well, great question. Beauty brands, as you know, are under growing, growing pressure to prove sustainability of their products. Whether ingredients come from how packaging is sourced, whether ethical labor was used, yet, the [00:08:00] reality is that many of these supply chains are deeply fragmented. So what RFID and this technology allows is a level of granulate traceability that connects every touch point, creating a unified, transparent story for each product.
so for example, we, we work with brands that embedded the NFC into the packaging. Okay. So eat, uh, these chips go directly into the beauty, uh, packaging. And, um, that is one example.
For example, with Ulti Milano. Ano is a brand that did this with us and the idea and their ob uh, their digital ambition was to improve customer engagement. And the objective was to devise a system to uniquely identify more than 1.5 million products annually. Which face several key challenges and in these, uh, this technology help.
For example, in logistic optimization, improved tracking of outbound logistics, linking [00:09:00] products to end customers for seamless upstream and downstream. Traceability. And also something that is really important that is happening in the beauty industry is the great market mitigation because, as you know, uh, they, they need to combat the significant challenges posed by these, um, these, uh, situation that is happening in the beauty industry.
So this technology also unlocks the potential of the digital product passport and what it happens that these, in this case, consumers can scan the item with their iPhone and then immediately access to information, you know, from raw material, the products, origin, material composition, certifications, and even recycling instructions.
And it doesn't stop here. The digital twin also supports internal sustainability goals by capturing data on things like excessive inventory. Our report says that 6.2 of goods in the beauty and [00:10:00] personal care sector in the global supply chain are discarded due to overproduction, so we can tackle that head on.
Meanwhile, for example, Vogue business estimates that between 20 and 40% of beauty products end up as waste. So we can support waste management as well. And on the consumer end too, uh, we could encourage sustainability at every point of the supply chain. So we are optimizing logistics to reduce emissions and enabling smarter end of life strategies like reuse or refill.
It's about making sustainability not just a brand value, but a measurable operational reality and making that visible and meaningful to consumers too.
Deanna: No, that's fantastic. Thinking about inventory and logistics, of course the gray market, as you've suggested, is always a concern in our industry. Um, but then what we think of as maybe post-consumer applications with packaging return recycling, perhaps. I'm wondering if we can kind of [00:11:00] go a little bit in the other direction and think about some of the sustainability goals earlier in manufacturing or earlier in ingredient sourcing.
Is, is this technology being used in that space or do you see the brands you're work working with maybe encouraging their manufacturers to start using this technology or, or, I guess what I'm thinking is, um, you know, some of our listeners that, uh, lead supply chain companies, ingredient manufacturers or contract manufacturing companies, very much, you know, need the same level of traceability, uh, throughout.
Their work, but maybe for very different purposes. Right? Not necessarily this idea of consumer assurance, um, or even, you know, post-consumer sort of compliance with, uh, recyclability or refills. Um, can you say anything about, sort of earlier in the supply chain,
Fernanda: I think that while you are, I think that your question goes more into the upstream and the downstream traceability, [00:12:00] because that is what is really important. That is not just about the tax, it's also about the infrastructure. And this is what, uh, Tamira really excels because it's not just about, you know, giving the tag, it's about giving the complete architecture and the information of the data from the raw material till the end of life.
So that is really important because at the end, when you have the tag, you need to have. The same, the blockchain, if you have all the information of the end-to-end traceability, it doesn't really create a potential for sustainability. So you really need to know the, the, the part of the raw material. And I do believe that what your question, um, or your audience might be interesting is that also this part of, you know, uh, tracing the upstream information and the raw material information, not just.
Gives the trust because you provide the information to analyze the ethical source, but also internally besides the [00:13:00] think of the consumers, you know, internally, how you are managing your, uh, production, your manufacturing, if something you need to be changed, if there are excessive or of, uh, of products that it have not been used.
Uh, or inventory that has been stopped there. So everything relies on that information that could come from the raw material as well.
Deanna: Interesting. And so many of the examples you've shared, um, with the fashion brand, uh, with the beauty brand, putting this RFID technology into packaging, these examples are what we might describe as. Indivisible items, right? And, and certainly in the ingredient space we're dealing with something, um, that people refer to as non-discreet materials, right?
So something that's not necessarily a single object that I can hold in my hand, but maybe it's a liquid, a powder, sometimes it's even gases. I'm wondering how these sorts of materials are reliably tagged and traced, and, and I can, you know, of course, imagine. [00:14:00] Okay, if I have a, you know, um. A large container of a liquid, I can, I can tag that large container.
But then is there a, a greater risk of tampering or manipulation with ingredients and raw materials than there is with these sort of indivisible consumer items?
Fernanda: Yes, of course. Well, the ingredient in the ingredient supply chain, the focus is more on the batch level and container level. Traceability. What's really powerful is how this integrates to the downstream visibility. When the finished, finished product is created, for example, let's say a perfume or a serum, it carries a traceable link back to the regional batch.
So whether you are looking at compliance auditing, a consumer facing transparency. Tire lineage is captured. This also makes it easier to respond to potential quality issues. Any irregularity can be traced directly back to the source and back. It is technically possible to achieve these, although sometimes it could be some, uh, challenges.
As you [00:15:00] mentioned, the thing of, you know, the tampering and, uh, because with liquids it could be easy. To, uh, is an ingredient that could be easy to dilute, to substitute or to tempered. And sometimes in these, uh, paths, it has to, a lot of handoff of manufacturers be before arriving to, uh, to the production, let's say to the production facility.
So what is important here, and it's essential is. To have digital traceability, which helps to understand each step and have the complete story of the product
Deanna: Yeah. Yeah. And certainly as this technology has emerged, it's, it's not the first time by any means that our industry has been tracing, uh, the ingredients, right? There are already very strong protocols in place. Uh. You know, to mitigate those concerns at each handoff as you've described. And certainly very good, um, tracking strategies as well, just with different technologies, I think.
Um, but, but this certainly sounds like it adds to that. Um, you know, [00:16:00] earlier this year I wrote a little news item about how some of this tagging technology, um, like most technology right, is always being made. In smaller and smaller versions. Um, RFID is increasingly thinner and much more flexible. I mentioned this because I'm curious at this point, is there an item or a label, a container?
Is there anything we cannot tag at this point?
Fernanda: Well, um, there are a lot, as you mentioned, it's incredible how the technology has been evolved. For example, there are ultra thin flexible tags that works some curved surfaces, you know, on bottles or even on the foil length, you know, uh, ettes, you know. But in most cases, we try to tag the product itself rather into the packaging, because generally the packaging is often disposable.
Now, if there are some things that can be. Tractor. Yes, there are some edges that might be a little bit complicated because unfortunately in the beauty industry, [00:17:00] there are still a lot of single use blister packs or ultra miniature items, you know, uh, to give, you know, customers to try things and so on. So in these situation, the tagging may not be cost effective.
Or technically feasible, but even that, what we suggest is a secondary packaging to track at the batch or a kit level. know, if these item works.
Deanna: Yeah, no, that makes sense. Something, something can be tagged, even if it's not
Fernanda: And these, uh, and these of course, you know, the bigger limitation as well is tends to be what we discussed it before, but also, uh, comes into this question as well, you know, to the system integration. This is a bigger limitation because getting the data. Infrastructure. Infrastructure, right, to support item level tracking.
Deanna: And can you say anything about the, the challenge of sort of then integrating that with other systems that, that [00:18:00] companies have, if maybe they haven't brought on this sort of RFID or blockchain in the past? How, how do you sort of plug that into That is, that is a really, um, interoperability. We have all the systems that could really connect between some systems because that could be. As I see it also as sustainability, passionate. And, uh, when I was really excited about this job and these role is because I do believe that you, in order to make a shift to sustainability, you need to help the industry.
Fernanda: It's not just like you need to work with my system. Then if the brand, it doesn't work. With your system anytime will not be sustainable. So you're not really helping them, you know, so that is a monopoly. So, no, in this part we could really interact with, uh, clients that might be not using RFID and help them to interact, or they already have, but they didn't, you know, have a, the right system we could really help [00:19:00] to twin, be interoperative with all, um, the end to end, uh, traceability.
Deanna: Yeah. No, that makes sense. I, I am sure. Um, it's, it's not unusual that that's how we, we hear new technologies plugging in for sure. All the time. I, as we finish up, I am wondering what's next, particularly perhaps in terms of sustainability applications since that's your specialty, what's coming next for this type of technology?
Maybe something we haven't realized. Is there a next generation of this technology that we might be watching for? Are there new possibilities in terms of. Sustainability advantages for companies, for brands, consumers. Where are we at?
Fernanda: Well, I, I, I believe that there are like many, uh, possibilities, you know, in this perspective is a huge potential for the next generation. I do believe that also, um, there are things to explore. Are really interesting. For example, using, we're exploring now in the fashion industry, but I do believe that would be really interesting in the [00:20:00] beauty industry as well.
That is using the RFID and the digital, um, IDs, not just to track products, but to diagnose material potential at end of life. So by combining the digital IDs with artificial inte inte intelligence, we can automatically identify products in ways to stream. And assess their recyclability. So, um, I do believe that that is really important and at my point of view, something that even if we have heard it a lot, I do believe that something that could really make a change will be the digital product passport.
Because the digital product passport, not just on the fashion industry, but uh, uh, uh, in in the, in the cosmetic industry and so on, will really find, you know, a huge way to interact as consumer, as brand. Accountability and a new way of do business. And also as a consumer perspective too, to understand that the information that the brand that you are buying, uh, could interact [00:21:00] with you and you could be loyal to that brand for, for, for several reasons.
Deanna: I love that. And you know, I, I think I promised this was my last question, but it's not, I was listening to your answer and it, it made me think we should, um, sort of answer the question. The, if, if, if a product is tagged, right? Let's say we have a jar of face cream and we put this RFID technology into the container, right?
And clearly as, as you've said, the, the consumer right, can then access information there. Whether it's about, um, sort of consumer assurance and they wanna understand where the ingredients come come from. Maybe they can access, um, brand information, maybe they can access, I'm putting words in your mouth here, but maybe even product tutorials, some sort of, um, more sort of user experience information.
But I'm wondering. Is that one RFID tag? The same tag that can be used by the manufacturer, by the, um, you know, the logistics company by the retailer. And then, you know that information can be discreet depending on who's [00:22:00] accessing it. Is that
Fernanda: Totally, totally. There are incredible technologies. I will do, um, I will answer this and I will do a step back. So something interesting just to add this, um, it's the same tag. You can have all this information to interact. Internally for sustainability situations for logistic operations, but at the same time for customer, the same thing that you're saying.
You know, I have my, uh, high-end face cream. And it finish, and I just, you know, uh, tap with my phone, the jar. And instead of tools, it, it could be a reward by bringing them back and how to recycling it, or even a refill or some, you know, uh, activation because it's gonna be an event of the brand. So, connect a lot of PO positive business and, uh, loyalty as well.
Something that came to my mind when you asked this is, um, just like a flashback on, on a question that the, that we discussed before is how [00:23:00] this technology is really important for several things because for example. Something that is, is really interesting that is used on the alcoholics, uh, verbiage and could be really interesting into the beauty industry is, for example, the tax when that are in the ceiling.
So when you open the ceiling, you understand that something was being, of course could be tempered or could be modified before arriving to the end of the consumer. So this could be also something information and this technology change on a different information when you. Break it or not, whether you break it or not, but the same for, so it's, it's, it's really interesting the possibilities that you could rely on a tech.
Deanna: Yeah. And, and we're so familiar with that sort of tamper evidence seal being something plastic or a, a peel back, um, part of the packaging. But, but to have it a, a technological piece of it, that's, that's a very interesting idea. Thank you for sharing that. Well, Maria Fernanda, I, I thank you for your time and for passing along so much useful [00:24:00] information today.
I, I really appreciate your being a guest on Cosmo Factory.
Fernanda: Thank you so much, Deanna. It was a really, uh, great conversation.