According to a Gartner supply chain technology survey by 2023, 90 per cent of blockchain-based supply chain initiatives will suffer ‘blockchain fatigue’ due to a lack of strong use case.
The survey also found that only 19 per cent of respondents ranked blockchain as a very important technology for their business, and only 9 per cent have invested in it. This is mainly because supply chain blockchain projects are very limited and do not match the initial enthusiasm for the technology’s application in supply chain management.
“Supply chain blockchain projects have mostly focused on verifying authenticity, improving traceability and visibility, and improving transactional trust. However, most have remained pilot projects due to a combination of technology immaturity, lack of standards, overly ambitious scope and a misunderstanding of how blockchain could, or should, actually help the supply chain. Inevitably, this is causing the market to experience blockchain fatigue,” Alex Pradhan, senior principal research analyst at Gartner said.
The budding nature of blockchain makes it almost impossible for organisations to identify and target specific high-value use cases. Instead, companies are forced to run multiple development pilots using trial and error to find ones that might provide value. Additionally, the vendor ecosystem has not fully formed and is struggling to establish market dominance. Another challenge is that supply chain organisations cannot buy an off-the-shelf, complete, packaged blockchain solution.
As blockchain continues to develop in supply chains, Gartner recommends that organisations remain cautious about early adoption and not to rush into making blockchain work in their supply chain until there is a clear distinction between hype and the core capability of blockchain. “The emphasis should be on proof of concept, experimentation and limited-scope initiatives that deliver lessons, rather than high-cost, high-risk, strategic business value,” Alex concluded.