Decentralized Procurement Framework for Smart SupplyChain System Using Blockchain

Abstract

In recent years, blockchain technology has emerged as a transformative force across various industries, offering enhanced transparency, security, and decentralization. Supply chain management, a vital component in both manufacturing and retail sectors, stands to benefit significantly from these capabilities. This paper presents a Smart SupplyChain System that leverages a decentralized procurement framework based on secure, automated smart contracts to improve inventory management and purchasing operations. At the core of this system is a proposal-based procurement mechanism that enables seamless, trustless interaction between retailers and suppliers. Retailers maintain real-time inventory logs, and when stock levels fall below a predefined threshold or upon manual trigger, the system initiates procurement by automatically generating a proposal request. These requests are recorded on a permissioned blockchain and are visible to all authorized suppliers.Suppliers respond with structured offers detailing pricing, availability, and delivery timelines. All proposals and responses are immutably logged on the blockchain to ensure accountability and transparency. Retailers evaluate these offers based on defined criteria—such as cost, speed, and reliability—and confirm orders via smart contracts, which autonomously handle order execution and tracking. This decentralized procurement framework replaces manual negotiations and centralized approval delays with an efficient, secure, and data-driven system. By minimizing human intervention and enabling transparent multi-party coordination, the solution enhances trust, reduces procurement lead times, and improves decision-making. Prototype implementation and simulations validate the system’s feasibility, scalability, and resilience across typical supply chain use cases.