The irreplaceable token, namely NFT, may affect the supply chain market because it can track data and leave digital traces. NFTs and blockchains can eliminate bottlenecks, save costs, make the supply network more transparent, and help avoid confusion at all stages of the supply chain, from entry to production to transportation. In this article, you will learn about the use of NFT in the supply chain and what it can do in the supply chain.
NFT will generate a digital footprint or "token ID", which is associated with an item throughout its life cycle, rather than a huge, lengthy and complex paper trail generated by a series of commodity exchange rights and activities.
The information contained in each NFT metadata leads to real-time updates of priceless digital assets on the blockchain to determine the uniqueness of each NFT.
By allowing participants in the supply chain to access the same immutable records on the ledger, NFT can help reduce or even completely eliminate inconsistencies in information flows. The immutability and transparency of the blockchain ensure the validity and reliability of the supply chain data.
In order to purchase and obtain the goods and services needed by the company, NFT can improve efficiency and reduce costs. The position, quantity and other important information of parts are also generated by NFT in the end-to-end view.
However, NFT also has some potential risks in the supply chain, of which network security threats and online fraud are two major problems. These tokens are irreplaceable, but fraudsters may be able to copy them. They can remember the entire automotive supply chain ecosystem.
Another difficulty is the time-consuming and expensive process. Not every company in the supply chain system has the knowledge or power to adopt NFT. In order to implement NFT plan, all supply chain partners need in-depth analysis and knowledge. For example, P&G and Wal Mart should share similar knowledge, views on cost adjustment and understanding of any impact.
NFT enables enterprises to show their transparency to global customers. In the blockchain, Internet of Things and digital fields, the implementation of NFT has a little advantage over competitors. In the future, complex paper tracking methods will be sought when representing unique assets digitally.
If we link the current use cases of NFT with the supply chain field, the question of which unique assets we can use tokens to represent and when to make these tokens irreplaceable will arise. The following list contains some NFT use cases for the supply chain to clearly show its ownership or exchange history.
1. Unique physical products or product batches (product authenticity)
A common application of blockchain technology is the source and traceability of products. In order to track food, medicine or clothing, many enterprises use blockchain technology and token. By using tokens, you can track the transaction and movement of products. A single digital twin associated with the unique identifier of physical goods can be established by making NFT for products or product batches.
2. Unique physical assets (asset tracking)
The way NFT can represent goods also applies to other assets, including manufacturing equipment or real estate. NFT has been used to simplify real estate transactions and promote some investments by developing unique income generating assets specific to NFT. Another income generating asset is factory machinery, which may be financed in other ways through token.
3. Unique digital business files (certificates and transaction data)
There is always a unique identity in commercial documents such as invoices, certificates and sales orders. NTF can also be used to represent such documents.
The above content explains NFT in the supply chain, and what can NFT be used in the supply chain? The answer to this question. In short, NFT will serve as a unified source of information for all chain participants, from manufacturing facilities to retailers, from exporters' ports to importers' ports. NFT can be used as a catalyst for change in complex supply chains, enabling organizations to build excellent value chains from the beginning.
