Blockchain Procurement System Automating Contract Execution

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Solution Overview

Problem

Traditional enterprise procurement processes are time-consuming and labor-intensive, requiring multiple databases and human oversight, which complicates supplier management and makes it difficult to obtain favorable pricing and locate suppliers for less frequently needed items.

Innovation Solution

A procurement system utilizing a blockchain to create and manage immutable, self-executing contracts that automate procurement processes, reducing the need for human intervention and enabling transparent, irrevocable record-keeping of procurement obligations through a management system that intermediates between user systems and the blockchain.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Productivity

If traditional enterprise procurement systems are used with multiple databases and human oversight, then procurement processes can be managed with existing infrastructure, but the process becomes time-consuming and labor-intensive

Engineering Contradiction:

Improveprocurement process efficiencyVSAvoidtime required for procurement

Core Design Contradiction:

ProductivityVSLoss of time

Solution Approach 1:

The patent implements self-service through automated contract execution where the system automatically matches procurement requests with supplier offers, executes contracts, and records transactions on the blockchain without requiring manual human intervention for each procurement transaction, thereby dramatically improving efficiency and reducing time loss

Inventive Principle:

Principle #25Self-service

Solution Approach 2:

The patent replaces the mechanical system of manual procurement processes with an automated digital system using blockchain technology, smart contracts, and algorithmic matching, substituting human labor and traditional database systems with automated computational processes that operate continuously without fatigue or delays

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

2Device complexity

If traditional procurement systems with multiple databases are used, then existing infrastructure can be leveraged, but device complexity and difficulty in managing suppliers increase

Engineering Contradiction:

Improvesystem architecture complexityVSAvoidsupplier management ease

Core Design Contradiction:

Device complexityVSEase of operation

Solution Approach 1:

The patent merges multiple disparate databases and procurement systems into a unified blockchain-based platform where all procurement data, contracts, and transactions are stored in a single distributed ledger, eliminating the complexity of managing multiple separate databases and simplifying supplier management through a centralized interface

Inventive Principle:

Principle #5Merging (Combining)

Solution Approach 2:

The blockchain platform serves multiple functions simultaneously: it stores procurement requests, manages supplier profiles, executes contracts, records transactions, and provides verification, replacing the need for multiple specialized systems and simplifying the overall architecture while improving ease of operation

Inventive Principle:

Principle #6Universality (Multi-functionality)

3Extent of automation

If manual contract management is used, then flexibility in handling procurement requests is maintained, but automation and transparency are reduced

Engineering Contradiction:

Improvecontract execution automationVSAvoidcontract flexibility

Core Design Contradiction:

Extent of automationVSAdaptability or versatility

Solution Approach 1:

The patent replaces manual contract management with automated smart contracts deployed on the blockchain, which automatically execute procurement agreements based on predefined conditions, providing full automation while maintaining flexibility through programmable logic that can handle various procurement scenarios and requirements

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

4Reliability

If traditional procurement processes are used, then human oversight can handle complex situations, but transparency and immutability of records are compromised

Engineering Contradiction:

Improverecord integrityVSAvoidprocurement record transparency

Core Design Contradiction:

ReliabilityVSLoss of information

Solution Approach 1:

The patent introduces the blockchain as an intermediary between procurement parties, creating an immutable distributed ledger that transparently records all transactions and contract executions, ensuring record integrity and preventing information loss while eliminating the need for human oversight to maintain trust in the system

Inventive Principle:

Principle #24Intermediary (Mediator)

Data Source

PatentUS20190108576A1Blockchain systems and methods for procurement

Publication Date: 2019.04.11 CAPITAL ONE SERVICES LLC

AI summary

Computer-implemented methods and systems are provided for a procurement system. Consistent with disclosed embodiments, the procurement system may include at least one processor and at least one non-transitory memory containing instructions that, when executed by the at least one processor, cause the procurement system to perform operations. The operations may include creating, in a blockchain, a contract corresponding to a procurement request including a first procurement parameter, the contract including contract code enforcing procurement obligations. The operations may include receiving, from at least one user system, at least one additional procurement request including at least one second procurement parameter and indicating the contract. The operations may also include generating a contract execution result by executing the contract code using the first procurement parameter and the at least one second procurement parameter; and updating the blockchain based on the contract execution result.