A Smarter Way to Procure: Exploring the Use of Smart Contracts

Abstract

Purpose:This article delves into the transformative potential of smart contracts in revolutionizing procurement within supply chain management, with a special focus on the healthcare industry. In line with the challenges posed by complex procurement processes, the study explores how self-executing digital contracts can enhance efficiency, security, and transparency. Theoretical framework:The article is grounded in the concept of smart contracts and their applications in procurement, serving as a bridge between emerging technology and supply chain management innovation. It draws upon an extensive body of literature and research related to smart contracts, supply chain management, and technology adoption. The study is designed to build upon this theoretical foundation, using two comprehensive case studies to provide real-world insights and practical applications. These case studies, situated within the healthcare industry, serve as tangible examples of how the theoretical concepts surrounding smart contracts manifest in actual procurement processes. Design/methodology/approach:To investigate the application of smart contracts in healthcare procurement, we employed a qualitative research approach. This encompassed an extensive literature review of academic papers, industry reports, and relevant articles, uncovering the unique advantages and challenges in procurement & supply chain management. Building upon these findings, we developed a groundbreaking smart contract-based procurement system, presented through sequence diagrams. To validate our solution, we implemented and rigorously tested it within a real-world Ethereum environment. Findings:Our research reveals that integrating smart contracts into procurement processes results in streamlined operations, diminished reliance on intermediaries, and heightened transparency and traceability. Moreover, the proposed solution showcases significant potential for enhancing procurement efficiency in the healthcare sector.  Research, Practical & Social Implications: These findings present valuable insights with far-reaching implications and hold substantial implications for stakeholders. Healthcare organizations can harness smart contracts to optimize their procurement procedures, yielding improved efficiency, transparency, and security. In a rapidly digitalizing landscape, our research empowers companies to maintain their competitive edge while delivering enhanced value to partners and customers. Originality/value:This article contributes significantly to the existing literature by offering a comprehensive examination of smart contract integration within procurement function, set within the broader context of supply chain management. It introduces a pioneering solution and provides a validated methodology, paving the way for in-depth exploration of smart contracts' impact on diverse stakeholders across healthcare supply chains