Gartner: Supply chain players need
to digitalize before blockchain can
take root
Blockchain may hold enormous potential for streamlining transac-
tions among supply chain partners, but the technology will largely
remain stuck in pilot programs through 2022 until companies become
more digital, a Gartner Inc. study says.
From 2020 through 2022, 80% of supply chain blockchain initiatives
will remain at a proof-of-concept (POC) or pilot stage instead of mov-
ing into wider application, the Stamford, Connecticut-based research
firm said.
The primary reason for blockchain’s
slow adoption in the supply chain world is
that early blockchain pilots applied models
that were successful in other sectors—
such as banking and insurance—instead of
fine-tuning the technology for the specific
demands of supply chain, Gartner said.
Those approaches did not transfer well
because in contrast to the fully digitalized
realm of financial technology (known as
“fintech”), many supply chain use cases
still require the capture of data and events that are rooted in the analog
world, like those associated with the movement of physical products
and transportation assets.
“Modern supply chains are very complex and require digital con-
nectivity and agility across participants,” Andrew Stevens, senior
director analyst with the Gartner Supply Chain practice, said in a
release. “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 sup-
ply chain environment.”
However, that setback should not discourage supply chain leaders
from experimenting with blockchain, the firm advised. The tech-
nology still has great potential to improve business processes once a
company has sufficiently transitioned from the physical to the digital
realm. n
GO FIGURE …
135
The percentage increase in “booked orders” of conveyor equipment reported by U.S. material handling equipment manufacturers in December 2019 compared with December 2018, the largest
increase ever recorded by the sector (surpassing its previous
record set in June 2018).
SOURCE: CONVEYOR EQUIPMENT MANUFACTURERS ASSOCIATION (CEMA)
Consumer spending is continuing to propel the industrial real estate market, with
new leasing activity driven in large part by
traditional and online retailers as well as
third-party logistics service providers (3PLs)
seeking space for e-commerce fulfillment,
according to the Chicago-based realty firm
Cushman and Wakefield.
In its North American Industrial Forecast
Report, the firm said the facility types that
will be most in demand in the industrial
world this year will include cold-storage
facilities, in-fill/last-mile facilities, and multistory warehouses. The continued strength
of industrial real estate comes on the heels
of a strong close to 2019, the firm noted in
another recent report, its Q4 U.S. Industrial
MarketBeat.
Among other findings, the North
American forecast report showed that new
supply of industrial space outpaced demand
in 2019, registering 336.3 million square
feet compared with 262.1 million square
feet. However, because 2018 was a record
year for industrial absorption, absorption
numbers for 2019 appeared low compared
with the past few years, and much-needed
industrial supply finally caught up to tenant
demand, Cushman and Wakefield said.
As for the 2020 outlook, the firm says
robust consumer spending supported by stable inflation, wage growth, and low unemployment all bode well for the industrial
property sector. However, uncertainties surrounding trade policy could have an impact
on the market in the near term, especially
since tariffs could affect critical consumer
spending levels. “As the world faces a new
decade, eyes will be on policy developments—fiscal, monetary, and trade—as well
as the health of consumers, the key pillar
of the economic engine moving forward.
Both global and North American economic growth moderated in 2019, and more
moderation in North America is expected in
2020,” Cushman and Wakefield said in the
report. n
Consumer spending,
e-commerce to drive
demand for warehouse
space in 2020
