Efficiency and Transparency in Supplier Performance Evaluation: A Blockchain-Powered Smart Contract Solution

Abstract

Efficiency and transparency are crucial for successful procurement in supply chains. Buyers need to select the right suppliers to avoid wasting money on unsuitable ones. To develop a trustworthy procurement system, we envision an online purchasing platform where transactions are secure and automated, and supplier performance is evaluated using real-time data. In this setting, buyers can confidently make purchases, and selecting or assessing a new supplier becomes less time-consuming. Companies can collaborate with the best partners according to their priorities, without solely relying on information provided by suppliers. Such a system offers a fair and transparent evaluation of supplier performance, benefiting both buyers and suppliers. Blockchain technology, along with its powerful tool, smart contracts, can make this goal a reality. In this paper, we propose an online purchasing platform based on the Ethereum blockchain that utilizes smart contracts to record data and provide precise information for supplier performance evaluation (SPE) systems. This system also ensures a secure payment process, significantly reducing the role of third parties. We test our system under various potential security scenarios, demonstrating its robustness for conducting transactions. Additionally, a cost analysis shows that the proposed system is highly cost-efficient, especially for large-volume orders.

Keywords

• Blockchain
• Ethereum
• smart contracts
• supplier performance evaluation
• supplier selection
• supply chain management