Request for Quotation on the Blockchain
In our blog post about “Blockchain enabled business processes” we showed how and why business processes can make use of blockchain technology using the Unibright Framework. In our series of business processes that can make perfect use of blockchain technology, we today want to elaborate a bit on a Request For Quotation Process (RFQ).
A request for quotation is a document that an organization submits to one or more potential suppliers demanding quotations for a product or service. Typically, an RFQ seeks a list of prices for something that is well-defined and quantifiable, such as hardware. Another type of document, called a request for proposals (RFP), is used when the requesting organization’s requirements are more complex and not standardized in a way that the items can be named, for example by a material number.
Without blockchain being involved in the process it might look like the following:
- The person responsible for requirement planning in a company monitors the ERP system constantly or gets alerts when items are running low and need to be procured
- After having identified those materials / articles, possible suppliers have to be figured out and quotes are to be requested for the needed amounts and delivery dates
- After getting those quotes from the various suppliers, these have to be consolidated, compared and rated
Here the normal RFQ-process ends. What happens afterwards is:
- Based on that list, the suitable quotes are turned into orders placed with the related supplier
- With the order placed, the shipping and delivery from the supplier has to be monitored to keep track on when the ordered items will arrive and can be used in production or put into stock.
By using the Unibright Framework and the “Request for Quotation”-Template, this process can be put “on the blockchain”:
- The person responsible for requirement visually defines the workflow for his process, based on the template. He puts in all the logic needed, for example setting a maximum for accepted delivery periods, price limits and so on.
- Based on that workflow, a smart contract containing this logic is generated automatically by Unibright’s Lifecycle Manager and can be published into a Blockchain - let’s suggest Ethereum here.
- Additionally, the needed SmartAdapter is generated automatically to connect the ERP-System to the SmartContract in Ethereum via the Unibright Connector
Now the process ist setup, integrating the Ethereum Blockchain with the company’s ERP System. The Smart contract deployed now starts (based on the implemented logic and data) to query the relevant suppliers about quotes for the items to be purchased. The suppliers may be using SmartContracts too that get queried or they may use Off-Chain systems, that get triggered by the published SmartContract using the Unibright Connector. If designed that way, the SmartContract can even start negotiating with the supplier side, based on the quotes received.
After finalization, the results from the suppliers, are pushed back by the SmartContract into the Company’s ERP System by raising an event for example.
With this process running on a blockchain, all the communication with the suppliers, negotiations and querying quotes that had to be done manually before, now can be done automatically by a Smart Contract.
The person responsible for requirement planning can monitor the ongoing process in the ERP system that has been automatically connected to the SmartContract. This example demonstrates the possibilities, blockchain offers for some business processes. Based on that finding, Unibright offers ready-to-use templates for setting alive business processes that can make us of blockchain technology.