There is a lot of talk about blockchain and supply chains. Even the likes of tech behemoths (dinosaurs?) such as IBM see a lot of potential for blockchain in the supply chain niche. After all, blockchains are perfect for tracking something through multiple hops, where the parties don’t necessary interact strongly with each other – exactly how most complex supply chains work today.
You can also see the entire history and provenance of an item – another really helpful thing for consumers and all supply chain participants really. I believe we’ll see a lot of important roles being played by blockchain technology in the supply chain industry.
Crypto Token and Marketplaces
But today, we want to talk about a tangential benefit of blockchains, i.e. using a crypto-token for supply chains. Why use a token? Mostly to create a marketplace that can facilitate the exchange of goods between various parties while bypassing some of the middlemen that don’t provide a lot of value. This is usually valuable to the producers or entities that are close to the production side of the supply chain. This way, they can demand a higher price for their product.
It is also good for the consumer of course, since they are procuring their goods closer to the source, and can get better terms and deals for this. It’s a win-win really, except of course for the middlemen not providing value, who will need to look for alternatives to what they’ve always been doing.
These can be general marketplaces, but it is hard to create something for everyone, which usually ends up as being created for no one. There are thousands of niches and domains inside the supply chain industry. Today, we discuss a project that is utilizing a crypto token for a very specific need in the supply chain domain – manufacturing.
The MFG Token and SyncFab
SyncFab is a new project that aims to build its product for the manufacturing supply chain – thus the MFG token for its crypto token. We explained the utility of the token in the previous section, and that’s really the value proposition for the MFG token.
The idea is to create more efficient manufacturing supply chains that connect hardware manufacturers with end consumers, without the brokers and middlemen taking a cut while providing little to no real benefit to either parties. In a way, trade becomes more direct-to-consumer right from the manufacturers.
There are two main advantages for the hardware manufacturers in utilizing SyncFab. One that we outlined in the previous section is they can generally get more money for their product and expertise, because they are directly connected to the end consumer. If the economics of the industry allow it, the manufacturers can enjoy a sustained increase in profits this way.
The other benefit is that of discovery. Like any marketplace, SyncFab aims to bring a large swathe of players from both sides on to their marketplace – i.e. both hardware manufacturers and hardware consumers. This means from the manufacturer’s point of view, they can also find new consumers for their product, again without the help of intermediaries like brokers. This can help them increase revenue.
The SyncFab ecosystem also utilizes smart contracts, so the hardware manufacturers know that they are going to get paid and not scammed, for instance. This increases overall trust in the system even with parties that you’ve never done business with. The company already has some partnerships with Silicon Valley based hardware startups.
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