According to the CEO and co-founder of Tradeshift Christian Lanng blockchain technology is not yet mature enough to fully support the global supply chain.
In an interview at the World Economic Forum in Tianjin, China, Lanng highlighted the use cases for blockchain in areas such as identity and certifications but argued supply chains were too much of a challenge for the technology in its current state.
“[Supply chains]…often have many different stakeholders touching goods, moving them around,”
he said. Adding,
“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. The problem is just it's not a high-performance technology.”
Tradeshift is a start-up in the supply chain payments and marketplaces space. The company helps other businesses send and pay invoices using software, instead of using traditional offline methods that are often costly and inefficient. As of July, the company raised more than $400 million in funds and was valued at $1.1 billion.
One of the main problems is that existing supply chains were not built for change, according to Lanng. To solve the issue, companies need technologies that can digitize their supply chains so that they can respond to change quickly, he said.
Talk of the promise of enhancing supply chain performance using distributed ledger technology has become commonplace across the global economy this year. For Lanng, however, the optimism is premature.
“Whenever people say blockchain, I think what they're really saying is they would like to connect things digitally,”
he continued, noting,
“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.”
Though, Lanng is one of the outliers to have this stance on blockchains. The revolutionary technology has previously seen some progress, as a joint shipping supply chain product from IBM and Maersk received recognition from logistics partner CEVA. Following the news, UK’s leading port operator, Associated British Ports (ABP), confirmed an agreement with digital logistics enabler Marine Transport International to develop blockchain use for port logistics.