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Gartner: Supply chain blockchain pilots stalling because of technology immaturity | Supply Chain Dive

  has summarized Gartner’s survey in this article, which seems to indicate more clearly that blockchain is a solution chasing problems.  The basic problems are “technology immaturity”, “lack of standards”, ‘too ambitious scope”, and a misunderstanding of the use cases.    I think Gartner has made a fair assessment of the situation, if perhaps even a bit too enthusiastic!  So much hype over blockchain, and so much development investment, forces companies to take a look at a technology that basically duplicates what many systems already do.  In short, the use case doesn’t hold up.
We need trust between partners in our supply chains.  Supply chains are all about cooperation, and current systems have nearly the same capacity for verification that blockchain based systems do. What current systems lack is an easy way to provide access for partners, and to control it.  So the trustless paradigm is not immediately relevant.  It might be in some of the commodity tracking uses Gartner details, though how it would prevent blatant fraud is not clear.
Gartner is also right about the impending balkanization of blockchain systems.  Each one is its own chain, but logistics partnerships are shifting constantly.  What’s needed is connections between blockchains so data can be translated between them readily.  Gartner refers to them as APIs;  in the old days, we called them middleware.  It would be great, as one survey participant indicated, to have a replacement for a peer-to-peer system (EDI) which allows many to many communication without the hassle, but that is not what blockchain proponents are suggesting.
Finally, the lack of standards is a major problem for supply chains.  Supply chains are about cooperation, and cooperation requires agreement on standards.  My partner Chris Clott and I have written about the need in the maritime supply chain world, and there’s more coming.  In fact, several groups have started up intending to create standards.  (See the BCG article below.)   Experience shows that standards take a while (read l..oo…oo..ng time) to become accepted.  And there’s substantial evidence that standard setting in a top-down fashion is more likely to fail and less likely to get a good ecosystem of cooperating providers than evolution from the bottom up based on specific solutions to particular use cases.  (See article by Hanseth etal below).
From this viewpoint, it’s actually good that there has not been too much success yet, and that there are still lots of entrepreneurial attempts at creating useful solutions to specific logistics and supply chain problems.  Whether these can use blockchain or some other database technology is uncertain, but the effort is going to yield some progress, though over a longer time frame than we expect.  I’m thinking more in the time frame of ERP’s rise as a must-have system, maybe 20 years.

screenshot-www.supplychaindive.com 2018-01-29 09-45-53-153 via Gartner: Supply chain blockchain pilots stalling because of technology immaturity | Supply Chain Dive

Here’s a link to the actual Gartner report PDF .

Here’s a link to the BCG report PDF.

Here’s a link to the Hanseth etal paper, about standardization projects in Norwegian health care.

 

One response to “Gartner: Supply chain blockchain pilots stalling because of technology immaturity | Supply Chain Dive

  1. Pingback: Gartner: Supply chain blockchain pilots stalling because of technology immaturity | Supply Chain Dive

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