What role do NFTs play in the supply chains?
Real-time tracking, settlement and documentation of the supply chain cannot only create more efficiencies for businesses but also help with better financial products that they can rely on for their operating capital.
NFTs create a digital record that is immutable and transparent. What this offers the supply chain industry is a transparent trail where everyone in the ecosystem would have complete visibility. Therefore, right from producing the raw material for goods to displaying them on a website or brick-and-mortar shop, the usage of NFTs will provide traceability and help in supply chain management.
Phygital NFTs have proven to be a great utility when they are tagged to real-world goods. Using NFTs for tracing a good or a manufactured product right to its source can add credibility to the product. It can also offer consumers a method to understand the source of the product they are looking at and choose one based on the providence of the product.
Apart from traceability, NFT-gated procurement and NFT-gated warehousing will help data scientists with valuable insights into product journeys at an individual level. Such granular data will help analysts, business owners and investors assess inefficiencies in the supply chain. This will help set new service level agreements (SLAs) with service providers on the supply chain and monitor them to hit these SLAs.
Furthermore, weaving NFTs and digital twin technology into the supply chain will enable companies to automate payments through the system and perform instant settlement once goods are delivered. Multiple checks and balances before transferring payment for finance teams would be a thing of the past once real-time traceability is enabled.
Real-time tracking will also help financing products like trade finance, where the status of goods can be used to borrow working capital by stakeholders on the supply chain. Supply chain managers who have an enhanced vantage point can intervene at the right checkpoint in the event of congestion or bottlenecks. This makes supply chains more efficient, resulting in better revenues and lower costs.