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By quickly and effectively removing critical pain points that cause significant disruptions, non-fungible tokens (NFT) coupled with blockchain supply chain development have the potential to completely disrupt the supply chain sector (in a positive way). NFT development solutions can track data and leave a digital trail that contributes to this.
While 2021 will go down in history as the year of the supply chain catastrophe, supply chain mishaps occur frequently and cost businesses millions of dollars annually. Blockchain-based NFTs can save costs, remove bottlenecks, increase supply network transparency, and help prevent chaos throughout all phases of the supply chain, from onboarding to manufacturing to transportation.
NFTs for Supply Chain Improvement
NFTs produce digital footprints or a "token ID" that is attached to the item throughout its existence rather than the lengthy, vast, and complex paper trails that accompany transactional ownership and activity of a range of goods. The data contained in each NFT's metadata, which points to priceless digital assets updated in real-time on the blockchain, defines the uniqueness of each NFT.
NFTs make it possible for participants in the supply chain to access the same immutable record on the ledger, minimizing and perhaps even doing away with inconsistencies in the information flow between parties. Supply chain data dependability and validity get assurance through transparency and immutability of the blockchain. As a result, NFTs can improve efficiency and save costs associated with finding and procuring the goods and services a firm requires. NFTs also produce a complete picture of a part's position, amount, and other crucial details.
Also, Read | Blockchain in Supply Chain | Use Cases, Advantages, and Features
Using NFTs to Address Today's Supply Chain Issues
The entire voyage may come to a complete halt with a delay at just one link in the supply chain. For instance, hundreds or even thousands of parts from different countries get exported to build cars in the automotive manufacturing business. The vehicle will remain unfinished, and the manufacturing facility may come to a standstill if one of those components is missing, whether it be an oil filter or a sophisticated dashboard touchscreen.
Because NFTs give any object (from chips to car batteries) a digital identity, the object's real-world metadata, such as its identity, present physical location, responsible party, possession, container temperature, and other metrics, become readily available. It provides helpful information about the object's state, location, etc. By time-stamping to the geolocation of a transported good, this data gets an automatic update as circumstances change, giving all parties involved an accurate and timely image of the physical object.
To keep the supply chain running, the manufacturer will be aware well in advance if a part in China is delayed and will have choices to obtain from other countries, such as India.
Also, Read | Enterprise-Grade NFT Solutions | Moving Beyond the Hype
NFT-based Supply Chain Management across Industries
Many businesses are piloting blockchain to track the movements of their products from the origin to the client across the supply chain. To show provenance and stop fake goods from reaching the market, supply chain operators are utilizing the NFT framework and the assets' uniqueness and traceability.
Fashion and Luxury Goods
One instance of how NFT is already finding its application is in the luxury goods market. Operators are assessing the possibilities to introduce a blockchain platform. When customers purchase a high-end watch, purse, or jewelry, they will receive a matching unique NFT that details the product's history, including information on the raw materials and production process. It implies that each of these products can have a distinct authentication. The entire supply chain gets the capability of end-to-end identification and tracking using NFTs.
Pharmaceuticals
The transparency and immutability of NFTs remain desirable and crucial attributes both in medicine and fashion. Consider the manufacture of pharmaceuticals. Blockchain and NFTs can aid in the fight against fake medications by speeding up the authentication process. Additionally, monitoring the process through the system will allow immediate identification and resolution of faults.
The technology can spot phony prescriptions, but it can also solve the pharmaceutical industry's viability problems effectively. It enables buyers to see the circumstances of each product as it travels through the supply chain. Indeed, they can review storage sites, environmental parameters (such as temperatures and humidity), and the length of storage. Consumers may get protection by an NFT affixed to a pharmaceutical product from some extremely subpar medications.
Also, Read | Blockchain a Must for Supply Chain Development after COVID-19
The Benefits that NFTs might offer to Supply Chain Management
Security
All parties can securely access information in the supply chain. NFT data on the blockchain network reside as a smart contract. Every single one of the network's nodes contains a record of everything.
Traceability
Knowing the logistical and manufacturing procedures the commodities have undergone, where they have been, and how long they have been there, is crucial when working with perishable goods such as food, pharmaceuticals, chemicals, etc. NFT technology enables complete transparency. It, thus, makes it possible for anyone to get real-time access to complete product traceability information.
Responsibility
Who is in charge of the products at each stage of the supply chain? We can always determine who controls the processes of the supply chain of items with NFTs. A liability agreement must be signed by both parties before an NFT may be issued. In other words, if a counterparty declines to accept it, the smart contract would not send NFT. Similarly, a Smart contract prohibits the delivery of items if the sender has not sent NFTs.
Generally speaking, confidentiality, flexibility, and transparency while exchanging information relating to a product are crucial benefits of NFT in logistics.
Also, Read | Supply Chain Traceability and Sustainability with Blockchain
Conclusion: NFT-based Supply Chain Management
Although NFT technology is in the experimental stage, potential industrial uses are occurring rapidly. In addition, NFT supply chain and logistics-focused solutions have started to surface. Traceability and tracking of a specific product are two important ways this technology benefits the supply chain.
It gives access to the metadata for specific products, including information on their current owner, location, weight, size, and certifications. As the item moves along the supply chain, an NFT on the blockchain network receives updates with this information. It provides a trustworthy, thorough history of a product's complete journey. It includes information from its origin until its delivery.
Connect with our NFT and blockchain development experts to know more about the increasing importance of emerging technologies.
