Driving resiliency and digitalization in the sourcing process: integration of blockchain technology and smart contracts

Abstract

PurposeUnder the current untrusted business environment, digital technologies, such as blockchain technology (BT), show the potential to digitally transform SC processes particularly the sourcing process (SP). Indeed, this process suffers from a lack of digitalization, a lack of trust and a high workload in the automotive supply chain (ASC). Therefore, BT coupled with smart contracts can deal with such issues by fostering trust, transparency, reliability and traceability as a digital solution.Design/methodology/approachThis paper conducts multiple case studies in the automotive sector and interviews 11 managers from two firms. It follows the managers’ perspective to identify and analyze the main issues that occurred while conducting this process using the existing technology.FindingsIt proposes a new architecture for the smart sourcing process (SSP) that uses BT & smart contracts to mitigate the identified issues, enable traceability, improve resilience, eliminate intermediaries, automate tasks, and enhance trust and data management. Also, the paper provides a decision tree to help determine which blockchain platform is needed for adopting the SSP solution.Practical implicationsThis study is useful for both academics and practitioners as it demonstrates the digitalization of one of the SC processes using BT and smart contracts, as well as develops a roadmap for digitalizing the SP of the ASC, and solves its vulnerabilities.Originality/valueBT has been used by researchers to digitalize the sourcing process only in the public procurement area. Considering all the faced challenges by the private procurement area, this paper aims to present a new architecture for the digitalization of the SP using BT and smart contracts in the ASC as a private SC.