Companies talk about the possibilities of blockchain tech, but with only 1% of the responding organizations are currently using blockchain in their supply chain operations, few are actively investing in it.
Around this time last year, we commented on a story about Europe’s largest shipping Port, Rotterdam Port, taking part in a Blockchain consortium. Blockchain news in the logistics sector isn’t new, but this instance was unique because of the scale of the project.
Since this story, blockchain technology (as it relates to Bitcoin) has received a lot of coverage recently. Just last week, many news outlets reported on how Bitcoin hit a record $19,340 on Coinbase, before falling to $15,198.83 last Thursday. More impressively, by 2025, industry experts expect over 10% of gross domestic product (GDP) to be tied into blockchain.
These figures have made some organizations in the logistics and supply chain sector curious. However, surveys show that roughly half of supply chain organizations are not even looking at the possibilities of the technology. With this being the case, how big is the gap before blockchain can be used across the industry?
Blockchain in a Nut Shell
Many articles detail the impact blockchain-based technologies are having on different industries. Few actually go into the technical details of how it works. Lexology.com writer,
Marc S. Blubaugh, summarizes some of its the features in his article.
- Blockchain is a decentralized database or spreadsheet (often referred to as a “digital ledger”) that is maintained and updated by a network of participating computers.
- This highly secure technology permits parties to create a record (known as a block) that is timestamped and linked to the previous block such that it cannot be altered retroactively without the alteration of all subsequent blocks.
- The digital ledger is typically available to the public but can also be made private.
- Blockchain is the technology infrastructure for cryptocurrencies like Bitcoin.
- Blockchain has many uses beyond cryptocurrencies, much like the Internet has many used beyond email.
High Potential but Little Investment So Far
Supply Chain Management Review writer, Becky Partida wrote an article earlier this week about a survey conducted by APQC.
The researchers interviewed 101 supply chain professionals. They found:
About one-third indicated that blockchain has the potential to create a competitive advantage for their organizations over the next 10 years. About 10% of respondents felt that blockchain would be a potential disruptor for their industry within the same time period
Partida points out, however, that Digital Supply Chain Institute (DSCI) conducted their own study of supply chain professionals. One-third of this group is “either extremely or moderately unfamiliar with blockchain.”
The research conducted by DSCI and APQC indicates that only 1% of the responding organizations are currently using blockchain in their supply chain operations, and only 35% are currently exploring the use of blockchain.
Of those surveyed (in both studies), almost 50% of organizations are neither using or exploring blockchain or its possibilities.
Part of the reason for these figures has to do with how new the technology is. It’s only been in the last couple of years that Bitcoin and blockchain have been taken seriously by the public at large. As more knowledge about the technology is disseminated, organizational interest in blockchain will better translate into investment.
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