Supply Chain Blockchain Initiatives Will Experience “Fatigue” by 2023

supply chain blockchain

Garter predicts that 90% of blockchain supply chain initiatives will suffer “blockchain fatigue” by 2023 due to lack of strong use cases.

According to Gartner, supply chain leaders are failing to find suitable use cases for blockchain despite the popularity of the technology.

Supply Chain “Blockchain Fatigue

Additionally, a Gartner supply chain technology survey of user needs found that only 19% of respondents ranked blockchain as very important for their business, and only 9% 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.

Alex Pradhan, senior principal research analyst at Gartner said:

“Supply chain blockchain projects have mostly focused on verifying authenticity, improving traceability and visibility, and improving transactional trust.”

He added that immaturity, lack of standards, overly ambitious scope and a misunderstanding of how blockchain implementation process are among the factors causing the supply chain industry to experience blockchain fatigue.

Blockchain supply chain challenges

The burgeoning nature of blockchain makes it impossible for supply chains to identify and target specific high-value use cases. Instead, supply chains are forced to run multiple development pilots using trial and error hoping to find ones that might provide value. This is not helped by the fact that the blockchain vendor system has not fully formed and is struggling to establish market dominance.

Another challenge is that supply chain organizations cannot buy an off-the-shelf, complete, packaged blockchain solution.  Gartner says this is due to current blockchain solution providers offering “complicated hybrids of conventional blockchain technologies”.

Furthermore, lack of a vibrant market for commercial blockchain applications means organizations are unable to evaluate, asses and benchmark solutions.

Gartner recommendations

The Gartner report highlights critical challenges facing global supply chain projects but it also provides vital recommendations. Specifically, Gartner recommends that organizations 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,” Pradhan concluded.

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About the author

Vincent Olago

Vincent Olago

Vincent Olago is the Managing Editor of Ledger Africa and has been active in the blockchain space for three years now. He's passionate about entrepreneurship and the potential of disruptive blockchain technologies to reshape our world. He supports startups to tackle blockchain challenges, address strategic problems and optimize growth.