Blockchain to become ubiquitous in global supply chains by 2025

Blockchain to become ubiquitous in global supply chains by 2025
Capgemini Research Institute finds at least 24 possible applications for the technology

Rebecca Gibson |

Distributed ledger technology (known as blockchain) is expected to become ubiquitous in mainstream business and supply chains worldwide by 2025, according to a new report from the Capgemini Research Institute.

The Does blockchain hold the key to a new age of supply chain transparency and trust? report predicts that while just 3% of organisations are currently using blockchain on a large scale in their supply chains, 10% have a pilot in place to do so in the next couple of years. The remaining 87% of respondents said they were in the early stages of experimenting with the technology.

According to Capgemini Research Institute, there are at least 24 use cases for blockchain technology in supply chains, including managing supplier contracts, tracking production, monitoring food chains, preventing counterfeit products, ensuring regulatory compliance and more. Predictions suggest that the technology will be most widely used in the manufacturing, consumer products and retail industries.

The UK and France are currently paving the way with 22% and 17% of the respondents from those countries saying that they have already started at-scale or pilot implementations of blockchain technologies. The US is a front-runner when it comes to funding blockchain initiatives.

Respondents cited three key drivers for investing in blockchain – cost savings (89%), enhanced traceability (81%) and enhanced transparency (79%) – and 60% said it has already “transformed” the way they collaborate with their partners. Consequently, they plan to increase their blockchain investments by 30% over the next three years.

However, 92% cited concerns about establishing return on investment as the biggest challenge to blockchain adoption, while 80% said they were facing interoperability challenges with legacy systems. In addition, 82% said fears about the security of transactions were inhibiting partner adoption of their blockchain applications.

“There are some really exciting use cases in the marketplace that are showing the benefits of blockchain for improving the supply chain, but blockchain is not a silver bullet solution for an organisation’s supply chain challenges,” said Sudhir Pai, chief technology officer for Financial Services at Capgemini. “Blockchain’s return on investment has not yet been quantified, and business models and processes will need to be redesigned for its adoption. Effective partnerships are needed across the supply chain to build an ecosystem-based blockchain strategy, integrated with broader technology deployments, to ensure that it can realise its potential.”

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