The global supply chain has undergone significant changes over the past years – and, new technologies have played a key role in such a drastic transformation. Indeed, technology has enabled the rise of eCommerce, thus putting the global manufacturing and distribution system under unprecedented demand. On the other hand, AI and automation have helped manufacturers and distributors level up their operations and cope with the growing consumer demand.
But, no matter whether these changes are considered beneficial or not, one thing is for sure: as it grows, the supply chain has begun to face new and significant challenges. Luckily, physical-digital solutions can help!
In this guide, you can learn more about how physical-digital solutions can improve supply chain efficiency. Let’s dive in!
Physical-Digital Solutions: An Overview
Before diving into the benefits of adopting physical-digital solutions, it is important to understand what “digital twins” are and what is meant by “physical-digital seals”.
Physical-digital solutions refer to those technologies that are used to create a digital twin of a physical product, which usually exists within a Metaverse. Thanks to these digital twins – or digital representations of an item – all data relating to a certain product (including geolocation, temperature, and status) can be immediately accessed through a user-friendly interface.
What’s more, digital twins and physical-digital seals are built on a blockchain infrastructure, which will record each transaction safely and immutably. In turn, manufacturers can be sure that the data reported is reliable, trustworthy, and current.
Reducing the Risk of Counterfeit
One of the greatest advantages of incorporating physical-digital solutions within your supply chain is the reduced risk of dealing with counterfeiting. During the past years, the drastic changes the global market has gone through (including the rise of eCommerce and the expansion of the supply chain) have led to a spike in the volume of fake goods in circulation.
In turn, manufacturers face a heightened risk of dealing with the financial, public health, and reputational consequences of fake goods circulating under their brand’s name.
Thanks to physical-digital solutions, manufacturers can now track their products throughout each item’s journey from manufacturing to consumption. This allows them to gain visibility into the supply chain and strengthen their product production strategy.
You can learn more about how physical-digital solutions can protect products from counterfeiting in this guide: Authena
Boosting Product Tracking Capabilities and Gaining Accurate Data
As we have seen above, physical-digital solutions are based on blockchain infrastructures. Thanks to this underlying technology, every transaction involving an item, and, in turn, its digital twin, is safely recorded on the blockchain. These records cannot be tampered with and are accessible in real time.
Thanks to these product tracking capabilities, manufacturers can gain accurate insights and data about a product’s location, expiry date, status, and quality, and be sure that the data received is current and accurate.
In turn, the data that is now available to manufacturers and supply chain managers can be used to highlight inefficiencies and boost the productivity of the manufacturing and distribution system.
Improving Product Quality
Physical-digital solutions can help manufacturers monitor product quality and ensure that all items are produced and delivered to the expected standards. On the other hand, manufacturers can monitor the digital twins of physical products to have an understanding of when, where, and how each product is delivered, consumed, and stored.
For example, new physical-digital solutions incorporated within smart packaging designs have been seen to be helpful to monitor the temperature of packaged watermelons to guarantee the best experience for consumers.
Managing Inventory and Reducing Waste
Manufacturers looking to improve the efficiency of their supply chain should start by looking at their waste level. According to estimations, over $163 billion worth of inventory is discarded every year, accounting for 8% of the total inventory amount. Some of the main reasons for this high level of waste include past expiry dates or overproduction. However, around 4.3% of the inventory – or $81 billion – is wasted because the items have perished or have been damaged.
Digital-physical solutions can offer unprecedented levels of visibility and control over each stage of the supply chain. In turn, this can help manufacturers and distributors better manage their inventory and orders, thus reducing waste and improving the efficiency and productivity of their facilities.
Improving Consumer Safety and Satisfaction
Physical-digital solutions can do a lot to safeguard the health and satisfaction of consumers. In particular they:
- Reduce the risk of illegal refilling or diversion
- Prevent fake goods from circulating on the market illegally
- Help manufacturers monitor the status and temperature of products to guarantee their suitability
- Prevent products from entering unexpected markets
- Ensure that items aren’t opened or tampered with on their journey to the consumer
In turn, this can prevent costly scandals, public health issues, and recalls.
Introducing Physical-Digital Seals: Working With a Product Authentication Expert
When it comes down to introducing physical-digital seals within your company, it is crucial to work with a product authentication expert who understands the needs of your company and can design an ad hoc solution.
