The procurement function is now at the heart of performance, risk management and responsibility challenges. Procurement departments and managing directors are looking for solutions capable of automating low value-added tasks whilst securing commitments with suppliers. This is precisely where smart contracts come into their own.
What is a smart contract in procurement management?
A smart contract is an intelligent contract coded as software that executes automatically as soon as predefined conditions are met without the need for human interaction. Rather than relying on paper or PDF document exchanges, commitments between customer and supplier are translated into logical rules: if a certain condition is met, then a certain action is triggered.
In a procurement process, this means that:
- Price, delivery time or penalty clauses can be configured directly in the smart contract;
- Operational events (goods reception, quality validation, service provision) automatically trigger subsequent stages;
- Stakeholders have a shared vision of commitments, without re-entry or interpretation.
Smart contracts extend this logic by directly integrating the rules of the game into the information network.
What blockchain properties secure smart contracts?
Smart contracts most often rely on distributed ledger technology, the blockchain. Three major properties of this technology reinforce the security and reliability of procurement transactions.
Controlled transparency
Each transaction recorded in the blockchain is visible to authorised parties. This enables sharing a single source of truth on contractual commitments, issue dates, delivery or settlement dates. This transparency reduces grey areas: data is no longer dispersed across multiple systems or files.
End-to-end traceability
The blockchain technology records the complete history of events, from the creation of the smart contract to its closure. In the event of a dispute, it is possible to trace precisely:
- The initial contract conditions;
- The contract execution stages (receptions, checks, validations);
- Any amendments made.
This traceability strengthens the procurement function's ability to manage risks, document supplier relationships and meet compliance requirements.
Data immutability
Once recorded in the blockchain, a transaction cannot be modified without leaving a trace. This immutability protects both parties against subsequent manipulation or errors. The smart contract becomes a reliable reference, on which procurement, finance and operations teams can align.
How are smart contracts transforming the digitalisation of transactions?
The digitalisation of procurement is no longer limited to dematerialising purchase orders or invoices. Smart contracts add an additional dimension: automating the contractual reasoning itself.
In practical terms, smart contracts transform procurement transactions in several ways:
- Automatic orchestration of key stages: once the smart contract is in place, the order, delivery, quality validation and invoicing are linked without re-entry;
- Reduction in processing times: moving from one stage to another no longer depends on dispersed manual validations but on events traced in the system (reception, control, approval);
- Securing exchanges: price, discount or penalty conditions are integrated into the smart contract, which limits subsequent disagreements;
- Improved visibility for stakeholders: finance and operations departments have reliable data that can be used for management and forecasting.
For companies already engaged in procurement digitalisation via electronic catalogues, EDI solutions or e-procurement platforms, smart contracts will be an additional step: moving from the digitalised transaction to the automated contract.
What benefits do smart contracts bring to procurement management?
Procurement departments expect concrete, measurable benefits from these innovations, aligned with their performance objectives. Smart contracts respond precisely to these expectations.
Task automation and error reduction
A large part of the administrative burden of the procurement function still comes from repetitive tasks: checking amounts, monitoring deadlines, reconciling orders and invoices, follow-ups. By translating some of these rules into a smart contract, the company can:
- Reduce the risks of data entry or calculation errors;
- Limit manual control tasks to exceptional cases;
- Free up time for analysis, supplier strategy and innovation.
Procurement teams focus more on value creation than on file management.
Security and trust in transactions
Smart contracts make the rules of the game explicit and shared from the outset. Supplier and customer know which conditions will trigger a delivery, payment or penalty. This transparency strengthens the climate of trust:
- Disputes related to contract interpretation decrease;
- Evidence is easily accessible in the event of disagreement;
- Supplier relationship governance gains maturity.
This securing of transactions is an important lever for controlling operational and financial risks associated with procurement.
Financial gains and cost optimisation
Beyond technical aspects, the digitalisation of transactions addresses a strong economic challenge. As Aurélie Wendling, European Key Account Sales Manager at Manutan Group, points out: "when this process is carried out in the traditional way, costs amount to an average of 95 euros per transaction. On the other hand, when a transaction is fully digitalised – that is, with the implementation of a punch-out and the dematerialisation of orders and invoices via EDI – the cost per transaction is estimated at 19 euros. This therefore represents up to 76 euros in savings per transaction."
Smart contracts fit into this dynamic: they enable further reduction of hidden costs related to contract and dispute management, by automating entire sections of the chain.
Acceleration of procurement workflows
When contractual conditions are coded into a smart contract, moving from one stage to another becomes smoother:
- Validations are triggered based on objective events (quantity delivered, compliance, deadline);
- Processing times are shortened;
- Teams can monitor the progress of transactions in real time.
Smart contracts extend this vision by strengthening the robustness and speed of procurement workflows.
How to deploy a smart contract in a procurement process?
Moving from idea to implementation requires a structured approach. Successful deployment of smart contracts in procurement management relies on several stages.
Firstly, the procurement department identifies the most relevant use cases: types of recurring contracts, product categories with high volumes, strategic supplier relationships. The objective is to target situations where automation will bring real gains.
Next, it involves defining contractual rules precisely: price conditions, tolerance thresholds, performance indicators, payment deadlines. The clearer these rules, the more faithfully the smart contract can execute them.
Lastly, the smart contract must be integrated with existing tools: ERP, procurement solution, the electronic invoicing platform. It is at this stage that collaboration with experienced partners becomes essential.
What concrete use cases for businesses?
Smart contracts can be applied to many scenarios in procurement. A few examples illustrate their potential.
Automated supplier contract management
For recurring product categories (consumables, supplies, regular services), the smart contract can integrate:
- Pricing grids and discounts;
- Expected delivery times;
- Penalty conditions in case of non-compliance.
With each order, the smart contract verifies that conditions are met and automatically triggers the next stage of the process.
Automated conditional payments
The smart contract can stipulate that payment will only be triggered when certain conditions are fulfilled: delivery confirmation, quality validation, no declared dispute. This mechanism secures the supplier, who knows the rules in advance, and protects the customer company, which better controls its commitments.
Service level agreement (SLA) monitoring
For service provisions, smart contracts can integrate performance indicators (SLA): solution availability, response time, service quality. If indicators meet defined thresholds, the contract continues automatically; otherwise, specific actions (penalties, amendment) can be triggered.
Automatic order/invoice reconciliation
Thanks to smart contracts, reconciliation between orders, goods reception notes and invoices can be largely automated. The smart contract compares data and only escalates to procurement teams discrepancies requiring human intervention. Time spent on manual checks decreases, in favour of higher value-added tasks.
Manutan's role in procurement digitalisation and automation
To fully benefit from smart contracts, companies need a solid digital ecosystem: electronic catalogues, ERP integration, online procurement solutions, dematerialised data exchanges. It is with this perspective that Manutan supports its clients.
Thanks to its Integration / eProc / Savinside service, Manutan handles integrations with ERPs and e-procurement platforms, with rapid connection, dedicated training and assistance to optimise procurement and improve efficiency. This digital foundation then facilitates the implementation of more advanced processes, such as contractual automation.
By combining a comprehensive service offering and in-depth knowledge of procurement challenges, Manutan positions itself as a trusted partner for companies wishing to accelerate the digitalisation of their transactions and prepare for the arrival of new levers such as smart contracts.
