Dive Brief:
- Gartner expects 90% of blockchain projects in the supply chain will suffer from "fatigue" by 2023 as businesses begin to reassess the technology while going through the implementation process. "A lot of the [blockchain] pilots are stalling overall," Alex Pradhan, a senior principal research analyst at Gartner, said in an interview with Supply Chain Dive.
- Many early efforts in blockchain have not moved beyond the pilot phase because "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," Pradhan said in a statement.
- A supply chain technology survey by Gartner found 19% of respondents considered blockchain a "very important technology for their business" but only 9% had invested in it.
Dive Insight:
The immaturity of the technology, as Gartner puts it, makes it difficult for companies to turn to best practices if they want to start a blockchain project. Companies that want to invest may have to run multiple pilots and determine the right course of action through trial and error, Gartner said.
There are also questions about how to properly manage a blockchain project. These issues can lead to users' experiences not matching the hype they might see surrounding the technology, and this "will lead to disillusionment and buyer fatigue," Gartner said in a research note.
Andrew Stevens, a senior research director with Gartner, told Supply Chain Dive there is a positive side to this fatigue. "This is not withdrawing from blockchain," Stevens said. "It's a reevaluation of its positioning."
Gartner found three main use cases for blockchain projects in the supply chain:
- Verifying the authenticity of goods.
- Improving traceability and visibility.
- Improving transactional trust.
"These are very complicated types of workflows that need to come together," Pradhan said. "These are tough problems to solve."
The complexity could explain why many of the early examples of blockchain projects are large corporations partnering with blockchain providers. Ford and IBM teamed up to create a solution to track cobalt from its source mine. In a similar application, SAP and Bumble Bee Foods partnered to track yellowfin tuna from the boat to the grocery store.
Pradhan said the lack of commercial blockchain applications can hold back the use of technology within the supply chain as companies can't find off-the-shelf solutions for the technology.
"Current creations offered by solution providers are complicated hybrids of conventional blockchain technologies," she said in the release. "This adds more complexity and confusion, making it that much harder for companies to identify appropriate supply chain use cases."
These kinds of readily available solutions might be coming to the market, though, as Amazon has announced recently its fully-managed blockchain platform.
Gartner cautions against seeing other companies take on blockchain projects and feeling the need to follow in their footsteps.
"Do not rush too quickly into trying to make blockchain work in your supply chain, especially at the expense of disrupting your broader technology roadmaps and strategy," Gartner's note reads.
This doesn't mean to stay away completely. It says companies should "[i]nvest proportionally as the technology matures" and work with partners to create roadmaps for potential blockchain use. The technology is, after all, still emerging," Pradhan said.
