Yesterday, Gartner published an article saying that 80% of supply chain blockchain initiatives will remain at proof-of-concept or pilot stages through 2020. The research firm cited the focus of projects on a technology-first approach as the reason for slow maturity. In other words, starting with the technology and looking for a solution rather than the problem that needs solving.
Compared to banking and insurance, which need digital-only use cases, supply chains need to connect physical goods and transportation events to the blockchain. Additionally, supply chain stakeholders need to understand how they can digitalize these processes, introducing a learning curve.
“Many organizations believed that blockchain could help navigate this complexity and pushed to create robust use cases for the supply chain,” said Andrew Stevens, senior director analyst with Gartner Supply Chain practice. “However, most of these use cases were inspired by pilots from the banking and insurance sector and didn’t work well in a supply chain environment.”
In a previous report, Gartner predicted that 90% of blockchain-based supply chain initiatives would suffer ‘blockchain fatigue’ by 2023 due to a lack of strong use cases. Gartner says adopters need to take a different approach for developing supply chain use cases.
Instead of focusing on a single problem, Gartner says supply chain leaders are treating blockchain as part of a longer-term technology roadmap and risk management planning. Many are adopting a broader end-to-end view and mapping all requirements from manufacturing to retail.
“Having blockchain as part of an overall technology portfolio has created opportunities for internal collaboration across many areas that have a potential interest in blockchain, such as logistics and IT,” said Stevens.
Blockchain initiatives that didn’t survive past the pilot phase are being used as learning experiences by supply chain leaders. Stevens said they ‘discovered what needs to change in their organization before blockchain technology can be leveraged effectively.’
Meanwhile, Gartner suggests organizations should identify and establish critical areas and technology options for measuring and capturing metrics and data.
“In a way, blockchain is a collaboration agent. It forces an organization to continually assess on a broad scale if its structure and employees are ready to embrace this new technology,” Stevens added.
There are numerous supply chain blockchain initiatives being run at the moment. Some of the prolific players trialing the technology include AB InBev, KPMG, IBM, Coca-Cola, Mercedes-Benz, and Oracle, among many others.
