You all must have ordered something online. But, have you ever wondered how your desired product gets delivered to you at your doorstep within days? Or do you know the process behind it? Among the many systems that make this wonder happen, the supply chain industry is one of its critical domains. Maybe a notable manufacturer, service provider, or blockchain development company can guide you with it.
Crafting in simple language, a supply chain creates and delivers a product to the receiver. However, there is a rigorous process involved in between. From sourcing raw materials of the product to managing the support of delivered products or return items, the supply chain deals with this all!
This post is created to tell you about the significance of NFTs and blockchain in the supply chain industry. But first, you will understand the role of the supply chain. Moreover, it will speak about the technological advancement that shapes the supply chain industry. Furthermore, it will focus on the benefits of NFTs and blockchain in the supply chain.
What is the significance of the supply chain?
- The Verified Market Research says that in 2020, the worldwide market for supply chain management was USD 10.1 Billion
- Furthermore, by 2028, it is said to reach USD 19.3 Billion.
The supply chain is a vital area of the manufacturing industry. It deals with the process of creation and sale of the products; starting from letting in the raw materials to delivering the final product.
Let us understand how the supply chain works.
There are many steps included in the supply chain. To take the final product to the user end, we can consider the following stages.
- First, there is a need to source the raw material.
- Second, the material is distilled into primary components.
- Third comes the action of using these components to construct the product.
- Then, the focus is on completing the order of the products.
- The next phase is to deliver this order to the end-user.
- Another critical phase is support. In this, all the returns or exchanges will be assessed.
This is the basic process of a supply chain. However, there can be some modifications of the stages according to the domain or product.
Technology in the supply chain industry
The supply chain has witnessed many technological advancements. Technologies such as big data, IoT, artificial intelligence, robotics, cloud computing, and now blockchain have a significant impact on supply chain development.
Artificial intelligence and the cloud together empower the supply chain with automated systems. AI also helps the system with precise prediction and analysis. In addition, IoT enables data-driven processes such as tracking and decision-making in the system. There are many more advantages of each technology to the supply chain. Let us understand how NFTs and blockchain can help the supply chain.
NFT in the supply chain industry
- According to Globe News Wire, in 2022, the worldwide market size for NFT was USD 3.0 million.
- By 2027, it is expected to grow and reach USD 13.6 billion.
There are many advantages of NFTs in the supply chain. NFTs are significant and non-replicable tokens. That means it is not possible to create a replica or duplicate of what one NFT is. The supply chain aims to ensure that goods are original or of good quality. This is feasible with NFTs.
NFTs can authenticate goods. For example, there is a possibility of duplication of any luxurious brand for clothing or accessory. Therefore, what these brands do is that they create NFT or digital representations of each physical product. For example, say a luxurious watch has its digital identity. Therefore, when a user buys this watch, he will get both physical and digital assets. This way, the product is authenticated, and customers can trust the brand. Many brands, such as Breitling and Louis Vuitton, use NFTs in their supply chain.
In addition, with NFTs, it is possible to track the packages. It can be possible when the digital expression of goods is created, and NFTs represent them. Similarly, it is easy to create a certification of a certain product with NFTs.
Blockchain in the supply chain industry
- According to Fortune Business Insights, the global blockchain market was USD 7.18 billion in 2022.
- Its reach by 2029 will have a significant elevation of 56.3% and have a value of USD 163.83 billion.
We already discussed the NFT benefits in the supply chain domain. Basically, NFTs have the basis of blockchain. Its nature of having irreversible records is driven by blockchain technology. However, blockchain can furnish the supply chain with many more advantages.
There is a lot of data involved in supply chain management. But, most of the time, this data is not visible. Blockchain can help share this data with utmost security. As a result, blockchain can bring transparency to the supply chain. This ultimately helps in reducing fraud in the system.
In addition, as with blockchain, bogus products are decreased, and the end-receiver or user can trust more on the system. This results in generating retaining customers and more revenue at the end of the day.
Another feature of the blockchain is transparency, as mentioned above. This helps various departments to have a look at factual data of the supply chain system. As a result, time spent verifying the data or product stats will be less.
Moreover, blockchain allows the system to reduce costs efficiently. This may need to avail the supply chain audit. A decentralized ledger in the blockchain can enable faster processes and checks. Furthermore, it ensures fast-paced product delivery, efficient product tracking, quality improvement, and fraud reduction.
Blockchain and NFTs have distinct features and can power many top domains with their characteristics. However, depending upon the domain, the benefits may vary.
Many notable companies focus on empowering their supply chain with advanced technologies. You can connect with blockchain and NFT development company to witness this evolution in your supply chain domain.