According to a recent report by Gartner, 80% of supply chain blockchain initiatives will remain at a proof-of-concept or pilot stage, over the next three years. Pioneering blockchain pilots for the supply chain sought technology-oriented models that have been prosperous in other sectors. Nevertheless, successful use cases for supply chains demand a distinctive approach.

“Modern supply chains are very complex and require digital connectivity and agility across participants,” states Andrew Stevens, senior director analyst with the Gartner Supply Chain practice. “Many organizations believed that blockchain could help navigate this complexity and pushed to create robust use cases for the supply chain. However, most of these use cases were inspired by pilots from the banking and insurance sector and didn’t work well in a supply chain environment.”

Originally, utilizing a technology-first approach that mainly targets blockchain infrastructure was the first idea for use cases in the supply chain. Nevertheless, the plan didn’t work because, in contrast to the highly digital-only fintech blockchain use cases, multiple supply chain use cases will require to capture events and data over physical products, packaging layers, and transportation assets.

Additionally, supply chain managers must recognize how these events can be digitized for sharing across the blockchain-enabled ecosystem of shareholders.

“Today, supply chain leaders have now started to treat blockchain as part of a longer-term technology roadmap and risk management planning. We see that many leaders are adopting a broader end-to-end view across their supply chains and map all requirements – from sourcing across manufacturing to the final distribution,” Stevens adds.

“Having blockchain as part of an overall technology portfolio has created opportunities for internal collaboration across many areas that have a potential interest in blockchains, such as logistics and IT.”

While most blockchain initiatives do not propel past the pilot phase, they implement a fresh round of data for supply chain leaders to handle broader research and reviews.

“Many supply chain leaders that have conducted blockchain initiatives found that they now have a complete overview of the current health of their supply chain. Their perception of how blockchain can be used in the supply chain also has shifted,” states Stevens. “By going through the process of deploying a blockchain pilot, they discovered what needs to change in their organization before blockchain technology can be leveraged effectively.”

Before beginning another initiative, supply chain leaders should recognize and establish vital criteria and technology opportunities for mapping and capturing metrics and data that can register an organization’s readiness to investigate blockchain.