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.
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.
May 9, 2019 in Advanced Computing, Logistics, Supply Chains
Tagged blockchain, computing, Gartner, innovation, Logistics, standards, technology, transportation
A good summary by Alexis Bateman and Chris Cottrill of MIT comparing Walmart’s intro of blockchain for leafy greens to their introduction of RFID. As before, they are compelling suppliers to participate. That gets it done, but does not ensure that there will be a fair division of the benefit. And of course, it is not clear that there will be benefit. The technology is still too new.
I’m troubled by the fact that a permanent log of readings from handheld devices may not allow device errors to be corrected. Some suppliers may be unfairly implicated if reading errors occur. However, if the application only tracks possession and not the presence of disease bacteria, that may not be much of a problem. I suspect that mixing lots from several farmers in a single bag may be a bigger and more contentious legal dilemma.
And it’s not a solution for the little guys. Only a behemoth like Walmart could impose such a requirement. About as far from the original blockchain concept of decentralization as one can get.
Nonetheless, I’m sure we will learn a lot from the experiment.
via Has Blockchain Reached its RFID Moment?
Naturally CIOs are an entrenched bunch. But the lack of use cases that actually work is definitely a barrier to experimentation, along with the inflated cost and risk of finding software engineers with the expertise.
via Gartner Survey Reveals the Scarcity of Current Blockchain Deployments