As large players, such as Amazon, adopt blockchain technology, others will surely follow, Stewart added. Further, the completion of common standards created through cross-industry vendor collaboration will also help adoption. “The largest OEMs are trying to evaluate and rough out use cases,” said Richard Barnett, senior vice president of marketing at Levadata. “They are considering joining blockchain consortiums and are in some early stage of triage around what use cases they think they make sense to invest or explore.”
Finally, a small set of software vendor leaders haven’t yet emerged and the market is fragmented, supply chain organization often cannot find an off-the-shelf, complete, packaged blockchain solution that meets their specific requirements. Or they are confused by the offerings and how to distinguish between them. “Without a vibrant market for commercial blockchain applications, the majority of companies do not know how to evaluate, assess and benchmark solutions, especially as the market landscape rapidly evolves,” said Pradhan. “Furthermore, current creations offered by solution providers are complicated hybrids of conventional blockchain technologies. This adds more complexity and confusion, making it that much harder for companies to identify appropriate supply chain use cases.”
Real world will arrive
Software vendors, meanwhile, say that real use cases are closer than many think. Oracle introduced its Oracle Blockchain Applications last October. “The first four applications are all supply chain use cases, as the supply chain is where blockchain can currently add the most value,” said Oracle’s Plavankar. “For example, we have blockchain applications for Intelligent Track & Trace, Lot Lineage and Provenance, Intelligent Cold Chain and Warranty and Usage.”
Further, there are some new use cases on the near horizon. “The real disruption capability of blockchain technology goes beyond reducing supply chain costs for large organizations through micro transactions and micro marketplaces,” said Palvankar. “If we can use blockchain technology to enable fully automated transactions from order creation through to delivery of goods or services and settlement, then very small transactions and working with a large number of suppliers and customers will become economically viable.”
The high cost of product recalls, both monetary and in terms of corporate brand, may also offer compelling opportunities for the technology. “With the high cost of product recalls and issues related to contaminated products, I think we are going to see many organizations in manufacturing, logistics and food and beverage demanding that suppliers agree to join blockchain networks as a requirement of doing business,” said Plavankar.
Gartner recommends that organizations remain cautious until the core capability of blockchain emerges and clarifies so that ecosystem enablement has occurred. “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,” said Pradhan. “You need to keep a pulse on what’s happening. The market is evolving very quickly and one of these technologies will transform and innovate.”
To identify the right opportunities, it’s important to carefully discern how to move forward in the best interest of the particular organization. LevaData’s Barnett outlines a potential process:
- Segment relevant use cases to your business. Look for forces or competitors that are potentially disruptive to the business. Consider how blockchain could provide a competitive advantage.
- Consider the economic value. Ask a few questions: Does it tie to optimizing my financial flow? Does it create a new digital experience for user in terms of services that can be monetized? Is it a source of differentiation in the market?
- Perform a risk analysis. Consider the dynamics around risk mitigation and risk response that blockchain offers. Can I trace source of supply and reduce recovery time in a recall or enhance brand protection?
— Hailey Lynne McKeefry, Editor in Chief, EBN