Evolution of Luxury Goods Supply Chain using Blockchain
Healthy, efficient, data-driven supply chains are crucial for business and global trade, and are integral to executive decision-making via their centrality in securing a clear flow of updates on things such as product location, inventory, ordering, shipments, transmissions and various key business operations.
These elemental pieces of supply chain finance, and their attendant complexities (i.e. flow, logistics, capital flow) define the “core asymmetric information problems” currently faced by supply chain management professionals and which are now being addressed conjunctively by blockchain experts and business operations experts around the world.
Innovating by combining physical tech with distributed ledger and tokenization
With the advent of blockchain technology’s rapid adoption by enterprise businesses, we have now begun bearing witness to how much more efficiently supply chains will function in forthcoming eras. Blockchain affords massive potentialities for the large-scale logistical problems faced by businesses worldwide.
The crux of what blockchain has wrought lies firstly in its design and core functionality, distinguishable by its immutable, distributed and cryptographical ledger design; likewise, blockchain’s decentralized nodal consensus algorithms have redefined the ways in which decisions are made over large networks with varied interests. Finally, the tokenization of business transactions has garnered a strong push for the utilization of non-fungible tokens (NFTs) as solutions to key problems faced by supply chain and logistics experts.
“The ultimate challenge of global supply chain management is to satisfy demand quicker, cheaper, and with less waste than competitors — all while maintaining quality standards.”
Core problem of uncertainty solved by blockchain tech
The biggest challenges facing supply chains today can be understood to be: lead times; delays; cash flow; data management; exposure to risk; accountability and compliance; quality control and defects; language barriers; time zones; exchange rate and foreign transaction costs.
Through the use of digitally-grounded and cryptographically-sound blockchain instruments like NFTs, combined with physical authentication tools such as RFID tags, sensors and smart chips, the asymmetric information uncertainty problems faced by supply chain technicians are quickly being alleviated.
Using blockchain technology, big data and machine learning, supply chain finance is becoming streamlined, reducing transmission delays, providing more congruous and transparent product history, and allowing supply chain stakeholders to collaborate more efficiently as they instantly access product information and make decisions on bi-lateral business operations.
Empowering consumers via less fraud, diminished uncertainty and more cost-savings
A prime example of blockchain’s application to supply chain is VeChain; founded by Louis Vuitton ex-CIO Sunny Lu, VeChain’s semi-decentralized network fights fraud and provides improved cost savings by allowing open streaming of data, rapid business transfers, improved market transparency and empowered data ownership.
The benefits of such advances are quickly being passed on to the consumer — namely in the form of innovative web3.0 marketplaces such as LuxFi — allowing for more secure, authenticated product information flows and less uncertainty through the sustained use of NFTs and decentralized transaction mechanisms afforded by blockchain.
Considering the advances made in supply chain finance thus far, it is certain we will continue to see rapid innovation occurring in 2022 and beyond, as businesses large and small adopt the latest tools and methodologies to bring value to consumers.
LuxFi is the world’s first asset-backed NFT marketplace for luxury assets, where people can buy, sell and invest in luxury assets using cryptocurrencies and traditional payments. We eliminate counterfeiting while minting an NFT on a multi-chain blockchain network, with a focus on luxury assets that hold value well and have a high resale value. Leveraging our big data intelligence system and unique algorithm for automated data collecting and data processing, the value of each NFT on our platform is backed by real-world data.
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