Supply chain leaders across the globe are talking about the promise of blockchain, but there’s been little demonstration about suitable use cases. And OEMs are getting tired of it, at least according to market research firm Gartner. In fact, at a recent Gartner Supply Chain Executive Conferences 2019, the firm predicted that by 2023, 90% of blockchain-based supply chain initiatives will suffer ‘blockchain fatigue’ due to this failure.
At the same time, market researchers continue to predict astronomical growth. A recent report from MarketsandMarkets, for example, predicts that the global market for blockchain in supply chain market is expected to grow from $81.40 million in 2017 to $3.5 billion by 2023, at a compound annual growth rate (CAGR) of 87.0% during the forecast period.
Are we tired yet?
There’s no doubt that the hype around blockchain can be exhausting. “We understand the challenges of working with a hot technology like blockchain,” Prasen Palvankar, senior director product management at Oracle told EBN. “Everyone is talking about it and saying it will change the world. There is so much hype in the market so blockchain fatigue is inevitable.”
At the same time, high-tech electronics OEMs may have a greater tolerance than other sectors. “High tech as an industry is typically more risk tolerant than many other industries when it comes to emerging technologies, so I would expect organizations within this industry to be furthest along in their exploration and pilot assessments of blockchain solutions,” said Evan Quasney, Global Head of Supply Chain Solutions, Anaplan.
Ignorance, particularly in the supply chain world, may be another stumbling block. “There’s an element of truth to blockchain fatigue but we also need a reality check,” Arran Stewart, co-founder of Job.com told EBN. “By 2025, there will be a new world changing technology on the horizon and that should make the fatigue of investing today null in void. Further, the supply chain will benefit so massively from blockchain, and there are so many practical applications there that relevance will grow.”
Passing the test
Further, the research found that currently only 19% of respondents ranked blockchain as a very important technology for their business, and only 9% have invested in it—mainly because blockchain projects aimed at the woes of the supply chain are in short supply. The survey was conducted between November 2017 and February 2018 among 303 respondents from North America, EMEA, Asia/Pacific and South America, Gartner said.
“Supply chain blockchain projects have mostly focused on verifying authenticity, improving traceability and visibility, and improving transactional trust,” said Alex Pradhan, senior principal research analyst at Gartner. “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.”
Electronics OEMs hoping to leverage blockchain run into the trap of running multiple development pilots to uncover which provide value—since the nascent technology makes it hard to quantify value in the abstract. “Organizations are still trying to understand what it is, what the capabilities are, and what it means to the business. They want to understand what problems can and should it solve,” said Pradhan. “That presents a conundrum to organization. Should we move forward or not?”
At the same time, trial and error will likely yield results over time. “In many cases, there are no examples to follow so companies are doing things by trial and error,” said Pradhan. “We don’t want to discourage that because an innovative use case might emerge from someone’s experiment.”