What is Blockchain Fatigue in Supply Chain?

Have you ever heard the term “blockchain fatigue”? If your answer to this question is no, then worry not, you are not the only one left scratching your head, wondering what it even means. But now that a Gartner survey has put this term in our dictionaries, we thought it is best to explore what it means and explain the context in which it was first used.

According to a Gartner study, 90% of projects that use blockchain in supply chain will suffer from “blockchain fatigue by the end of 2023. What is it? Why does it occur? Let’s find out.

Understanding “Blockchain Fatigue”

Blockchain fatigue, as the name suggests, refers to an exhaustion with the use of blockchain for supply chain management needs. It occurs because supply chain managers and officials are now running out of ways to keep the blockchain bandwagon running. They are now finding it extremely difficult to look for suitable use cases where blockchain may be useful.

Gartner recently carried out a supply chain technology survey to assess users’ needs and wants. The results showed that a mere 19 per cent of the respondents felt that blockchain was a very useful tech option to improve upon their business needs. Only 9 per cent of the respondents admitted to have invested in the tech as well. The report essentially concludes that the application of blockchain in the field of supply chain has simply not matched up to the initial hype surrounding this particular use case.

Alex Pradhan, who is the senior principal research analyst at this research firm stated:

“Supply chain blockchain projects have mostly focused on verifying authenticity, improving traceability and visibility, and improving transactional trust. 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.”

The nascent nature of the blockchain industry makes it quite difficult to find high-value use cases in the field of supply management. The companies must carry out a lot of pilot runs based on trial and error to find a useful case. Besides, the vendor ecosystem for blockchain systems is also not entirely developed, which also poses obstacles to the process.

Pradhan added:

“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.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.”