Blockchain Technology and Smart Contracts for Operational Excellence: Smart Sourcing Process Model for the Automotive Supply Chain

Abstract

The automotive supply chain (ASC) in Northern Africa faces many challenges related to traceability, trust deficits, data integrity, heavy workloads and intermediary involvement in its sourcing process (SP). These challenges can hinder this process’s efficiency and sustainability while sourcing suitable suppliers for the supply chain (SC). Thus, digitalization stands as a powerful facilitator in managing complex processes and blockchain technology (BT) is promoted to effectively address similar issues. In this regard, this article aims to build a smart SP model guided by lean practices and green principles using BT and smart contracts to achieve operational excellence (OE) in the automotive SP in the Northern Africa context. To do so, this study conducts interviews with experts to investigate contextual issues and identify the main challenges faced by the current automotive SP. Then, it proposes the smart SP as a solution for these challenges. The proposed solution uses an algorithmic approach to develop the smart contract algorithms for six sub-processes of the smart SP. Furthermore, the study offers multiple business implications on the digitalization of the SP to reduce higher workloads of the sourcing team, cost related to intermediary elimination and decentralized data management to deal with integrity, traceability and trust challenges while searching for potential partners.