Blockchain too immature for global supply chain says CEO
Christian Laang, CEO and co-founder of Tradeshift, the digital invoicing start-up remains cautious about just how revolutionary blockchain technology can be to the global supply chain in a recent interview.
In a CNBC interview on Wednesday at the World Economic Forum in China, Laang agrees that blockchain technology is a worthwhile idea, however he called limits to its ability to support the global supply chain suggesting it may be overhyped.
“[Supply chains] often have many different stakeholders touching goods, moving them around,” he said. “If you want to have authenticity, if you want to know where it is sourced, that it is done in a responsible way … (blockchain) is a great technology to manage that kind of flow and be sure of the integrity.”
Blockchain meet global supply chain juggernaut
The global supply chains according to Laang have a big problem because “they are not built for change. We’ve had a stable world when it comes to global trade for the last 30 years so all of the technology we have implemented is built to be static and is not built to have change.”
The solution he argues will be a drive towards digitisation by larger companies that will “need to implement technologies and platforms that are essentially much more like real time trading platforms”.
“We have trading when it comes to commodities stocks all of these things but if you look at what’s going on in most supply chains it’s very old fashioned, very static, long trade times and you need to be digitised…and that’s not the situation we have today. It’s a lot of emails, a lot of spreadsheets…I think you’ll see a big drive towards digitisation of the big supply chains.”
Blockchain is a potential solution but one that Laang feels has to grow more to become a catalyst for chain and warns against the hype saying: “I don’t think blockchain is a mature enough technology yet to carry that … I also want to be a little bit cautious for some of the hype.”
The bright side
Nikki Baird, VP of Retail Innovation, Aptos told OpenLedger recently that technology was among the top three disruptive trends confronting the industry. Driving change were enterprise technologies, with a whole influx of new technologies like microservices, internet of things (IoT) and artificial intelligence (AI).
She said: “Blockchain makes it possible for every legitimate touch in a supply chain – from a supplier to a manufacturer to a shipper – to add a verifiable record to an item’s pedigree.”
Baird saw a brighter future and reflected that the bottom line is that blockchain is not going anywhere and added that “some other applications of blockchain to retail seem to feel more like a hammer in search of a nail, but in supply chain I would say that is definitely not the case”.
She added: “Of the myriad applications currently under development, it’s hard to tell what’s going to take off and what will be most transformative. Nonetheless, the sheer number of people globally working on these projects make it likely that it’s only a matter of time until they are no longer considered experimental.”