Supply Chain

Supply chain in the age of the metaverse

These days, you can’t throw a rock without hitting someone who is talking about the Metaverse.

The c-suite might be discussing the merits of blockchain for personalization and security. Developers might be elaborating on the necessity of decentralization of Web3 elements to create a free and open experience (not one lorded over by big tech firms as Web2 is today). Speculators are bragging about their latest NFT purchase (which sell for staggering amounts of money), while simultaneously trying to figure out what to do with the token now that they “own” it. All of it points back to the inception of the Metaverse in some regard, with little understanding of that that actually means.

The closest I have found to a definition of the Metaverse is from Matthew Ball’s book, The Metaverse: And How it Will Revolutionize Everything: “A massively scaled and interoperable network of realtime rendered 3D virtual worlds that can be experienced synchronously and persistently by an effectively unlimited number of users with an individual sense of presence, and with continuity of data, such as identity, history, entitlements, objects, communications, and payments.” That’s a mouthful to be sure, and it’s heavily rooted in the gaming foundations that the metaverse is being built on, but it’s the closest to an understandable consensus available.

Many who are dependent on Web2 are not looking too closely at the coming effects of the Metaverse. But for supply chain managers or CSCOs who are particularly savvy, simply modernizing to the cloud will quickly be outmoded. While plenty of other technologies might be more immediately pressing, as the Metaverse develops companies will be looking for use cases for its deployment within their business.

There are a few things to consider when examining the Metaverse from a supply chain perspective.

Immersive environments

First, the Metaverse is generally considered an immersive experience – in fact, all of our science fiction reference points depict this as an inevitability, from Neil Stephenson’s Snow Crash (where the term Metaverse originated and which is cited in every article about the metaverse since the 90s) to The Matrix (let’s hope we don’t end up in that version of the metaverse) and even Tron (what is an immersive video game if not a world within the broader metaverse?). At some point we might all put on VR goggles and dive into virtual worlds, but what benefit would that bring to our supply chains? It may be compelling to “stand” in the middle of your supply chain to see it “flowing” to enable accurate modeling, or to build 3D visualizations of inventory levels and the like. However, by the time the Metaverse is the platform for conducting business globally, most of our supply chains had better be living in the cloud, synced with millions of IoT sensors, and more or less operating without our intervention, so an immersive 3D environment will likely be more novelty than necessity (at least at first, until communities of users discover or create new use cases).

Digital twins

What an immersive environment will bring to supply chains that could prove valuable is a powerful use case for digital twins of objects and facilities, whether they are your own or your suppliers, to verify practices such as ethical and sustainability standards. In fact, a future in which a given supplier is required to have a digital twin of their facility, along with digital twins of all their machinery, parts, and even employees, could bring a level of transparency and quality control to supply chains that have been previously impossible to achieve. Digital twins (and metaversal immersion) will enable significant improvements in warehouse design and process modeling, along with things like virtual trainings all the way to more mundane business meetings (which could, in fact, be held at a conference table on a beach – why just sit in a building in the digital world?). Digital twins are also what will enable the supply chain modeling – which will improve operational efficiency – to be done in the immersive environment.

Augmented information

While the metaverse is generally thought of in terms of immersion, it’s important to note that it’s also widely accepted that augmented reality will also fall under its definition. Even though the definition offered by Ball (above) notes “realtime rendered 3D virtual worlds,” it can be argued that layering realtime rendered 3D information over our own world in a virtual way is just as important to the development of the metaverse, its uses, and its eventual adoption. This is, arguably, where the majority of metaversal value will come for supply chains. As a shipment reaches a waypoint or destination, sensors will give immediate updates on what the shipment is, where it’s from, where it’s going (if it’s not at the end destination), when it’s due, if payment has been processed, and much more all in our immediate field of view, depending on where we look. Look at the truck (which will be autonomous, of course) and get an “x-ray” view of what’s inside, how many units, how they are stacked, if there are any damaged units, etc. You could even get an immediate look at the value of the contents and allow the system to prioritize higher value goods or expedited goods while always keeping you informed in real-time so you can make any changes as needed.

A broader definition of supply chains

One of the greatest impacts the metaverse will have on supply chains is in redefining what a supply chain even is and how it operates. Today, our supply chains are primarily physical – we move goods from one place to another, across a chain of events until it goes from raw material to finished product ready for consumption. But in an existence where most of our activities become virtual, that definition is likely to shift from a linear model to a collaborative supply network in which supply chains play new and different roles.

  • The supply chain infrastructure is poised to meet the same decentralization that will (hopefully) be at the heart of the metaverse. As 3D printing technology expands and desktop fabrication becomes more common, supply chains will need to adapt to bring materials to people rather than to factories or other processing facilities. And economies of scale will need to be reconfigured – end consumers will be creating “one of one” items rather than buying pre-fab, expendable, and ultimately wasteful products. This will also lead to a revolution in recycling (reusing printed materials to create new printed materials) and fixing (creating component parts as replacements on demand).
  • Supply chains will transition to include digital items. What is today a blockchain –  an ever expanding ledger of ownership and development of digital goods and assets – will eventually expand to become the digital supply chain, tracking “one of one” digital goods from place to place as it changes hands, gets folded into larger designs, and more. Where raw materials are the resource that physical goods are built on, and thus sold to manufacturers, digital NFTs (non-fungible tokens) may become essentially licensed resources for use in building more and better digital objects, which become a part of the digital supply chain themselves as they continue to be iterated upon. It’s all very circuitous, but such should be the way a supply chain operates even in the physical realm.

These projections are based on the signals we’re seeing develop in the industry today. It is not necessarily ground-breaking projection (it has been written about in one form or another elsewhere, most notably for supply chains in Roit Kathiala’s excellent article on SCMR).

However, despite the inevitable oncoming of the metaverse, there are still myriad companies which are operating more analog processes than digital who will be woefully unprepared to adopt and benefit from the inception of digital realms (and the growth of our digital existences). Most metaverse watchers and experts (if anyone can be called an expert at this point) point to the cloud as a main driver for the development of the metaverse, which checks out with Ball’s definition above in that the metaverse must be “updated synchronously” and operate in real time.

The first step toward metaverse adoption is to build a cloud-native supply chain architecture. To learn more about that, click here.

Note to the reader: The above is a forward-looking post. Our position on this subject is an interpretation of the industry signals we recognize today which may drive our product strategy, however at the time of this writing it is primarily a thought exercise.

Chris Moscardi

Chris is a Senior Content Marketing Strategist with a penchant for storytelling, technology, and futurism. You can follow him on LinkedIn at the link below.

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