The Fourteenth IEEE International Conference on e-Business Engineering
A Blockchain-based Supply Chain Quality Management Framework
Si Chen Rui Shi
School of Information Management School of Information Management
Nanjing University Nanjing University
Nanjing, China Nanjing, China
si.chen@nju.edu.cn 141070049@smail.nju.edu.cn
Jiaqi Yan Yani Shi
School of Information Management School of Economics and
Nanjing University Management
Nanjing, China Southeast University
jiaqiyan@nju.edu.cn Nanjing, China
yanishi@seu.edu.cn
Abstract—Recent quality scandals reveal the importance of
quality management from a supply chain perspective.
Although there has been many related studies focusing on
supply chain quality management, the technologies used still
have difficulties in resolving problems arising from the lack of
trust in supply chains. The root reason lies in three challenges
brought to the traditional centralized trust mechanism: self-
interests of supply chain members, information asymmetry in
production processes, costs and limitations of quality
inspections. Blockchain is a promising technology to address
these problems. In this paper, we discuss how to improve the
supply chain quality management by adopting the blockchain
technology, and propose a framework for blockchain-based
supply chain quality management.
Keywords- supply chain quality management, smart contract,
smart inspection, blockchain.
I. INTRODUCTION
The continuous emergence of counterfeit products and
product quality scandals has revealed the importance of
quality management from a supply chain perspective.
According to "The Economic Daily", China's manufacturing
industry suffers a direct loss of over 170 billion RMB yearly
from quality problems in supply chains [1]. There is also an
indirect loss of more than 1 trillion RMB due to their
negative influences on downstream supply chains, including
loss of market share and costs on pollution controls. How to
solve the problems of products qualities in supply chains has
become a key issue in acquiring manufacturing power from
strategy implementation in China, and has drawn attention of
scholars in various fields recently. Although there have been
many related research projects and studies, to resolve the
series of problems in supply chain quality management
arising from the lack of trust is still a difficult problem for
the technology used nowadays. The root cause is that the
traditional centralized trust mechanism cannot completely
solve these three challenges: 1) the self-interests of the
supply chain members [2][3]; 2) the information asymmetry
in the production process [4][5][6][7]; 3) the cost of quality
testing and technical limitations [8][9] [10][11].
978-1-5386-1412-9/17 $31.00 © 2017 IEEE 172
DOI 10.1109/ICEBE.2017.34
Zhuangyu Ren
School of Information Management
Nanjing University
Nanjing, China
renzy1996@163.com
Jinyu Zhang
Software Institute
Nanjing University
Nanjing, China
zhjinyu@nju.edu.cn
The emergence of blockchain technology has brought
innovative possibilities to Supply Chain Quality
Management (SCQI). In a Bitcoin system, blockchain
demonstrates the characteristics such as trust machine [12],
decentralized governance [13], traceable transactions [14].
The applications have been extended from financial services
to supply chain management, intelligent manufacturing and
Internet of Things (IoT), etc. How to use the technology of
blockchain to solve the problems caused by distrust in supply
chain quality management and to achieve the intelligent
management of products qualities has become a feasible
research proposition. Firstly, blockchain is a kind of new
Information Technologies (IT) used in supply chain quality
management. It solves the issues of distrust on the basis of
unchanged information and traceable records through
standardized norms and agreements. By setting up automatic
executions of quality management contracts, it is possible to
develop an auto-run intelligent system. Secondly, blockchain
has brought a new mechanism and ways of thinking to
supply chain quality management. Blockchain technology
adopts the governance model of human society in IT systems,
and further develops the traditional centralized system to a
multi-centered or decentralized system that enables different
interest groups to share power in the same IT system. This
system also improves the qualities of products and services
in supply chains by contracts. These two aspects of IT and
management mechanisms are exactly the two domains in
which management science and information management
systems are exploring in supply chain quality management,
and also interprets the value of blockchain in the research of
this field.
In order to improve supply chain quality management
with the blockchain technology, this study proposes the
framework and system architecture for blockchain-based
supply chain quality management. The rest of the paper is
organized as follows: we introduce the framework in Section
2, and use a case to illustrate the framework in Section 3. We
conclude the target contributions and future research
directions in the final section.
 II. A BLOCKCHAIN-BASED SCQI FRAMEWORK
In this section, we propose a blockchain-based SCQI
framework. Based on blockchain technology [15], a new
supply chain system can be built in which information
sharing and quality control are assured. Apart from
enterprises on the supply chain, this framework consists of
blockchain, smart contracts and various IoT sensors.
blockchain provides safe distributed ledger with various
quality information, assets information, logistics information
and transaction information. Smart contracts bring privacy
protection, automation and intelligence into this system,
while IoT sensors gather various data from the real world.
The framework and the corresponding system
architecture are composed of four layers based on different
functions, as seen in Figure 1. The bottom layer is IoT
Sensor Layer. In this layer, GPS is used to locate the
products in logistics process. Quality information, assets
information and transaction information is recorded with
RFID technology. Considering the relatively higher cost of
RFID, barcode can be used alternatively in some processes
when the standard of accuracy is not very strictly required
and the kinds of data is not a lot. In addition, various sensors
will be used to gather the information about temperature,
vibration, humidity and so on [16][17]. Last but not least,
considering many enterprises and numerically controlled
machines have their own information systems, it is more
efficient to develop some interfaces for acquiring
information from these different information systems [18].
The second layer is Data Layer, including blockchain and
safe distributed ledger. In blockchain, there are four kinds of
data: quality data, logistics data, assets data and transaction
data. Furthermore, all the enterprises keep a copy of data on
Logistic
Supplier Manufacturer
Operator
Real Time Quality
Digital Identity Logistics Planning
Monitoring & Control
澸濝濧濨濦濝濖濩濨濙濘澔 Quality Data Logistics Data
激濙濘濛濙濦
Physical
Product, Time,
Quality,
Temperature,
Service
Route …
Quality
GPS RFID Sensor
Logistics Process Selling Process
Figure 1. system architecture diagram
supply chain including supplier, manufacturer, logistic
operator, retailer and financial institutes. With these data or
information, smart contracts are used to execute quality
control and improve the efficiency of supply chain.
The third layer is Contract Layer. Only data sharing is
not enough. Data gathering in the layers above not only
facilitate data sharing but also aims to assist quality control
and improve efficiency of supply chain. The first concern
about the data sharing may be the privacy issues. Privacy
issues need to be considered for data sharing. Because
competitive enterprises are operating on the same supply
chain, some information needs to keep confidential for their
own competitive advantages. Therefore, digital identity is
used to control the access authority to the data. With the real
time data about qualities, smart contracts can execute real
time quality monitoring and control. With the logistics data,
smart contracts are able to plan logistics automatically.
Moreover, commercial contracts can execute automatically
and efficiently with transaction data and smart contracts.
Smart contracts also facilitate requirements of customers
transmit from retailers to manufacturers and then to suppliers.
There are many functions that smart contracts can achieve
with the data in blockchain. For example, with the retailers'
transaction data, smart contracts analyze the ultimate
customers' demands automatically and provide suggestions
about purchasing and producing to manufacturers and
suppliers.
The top layer is Business Layer. This lay includes
various business activities in enterprises. Each enterprise on
supply chain is able to control and manage the products
qualities with the support of blockchain and smart contracts.
They also make decisions on purchasing and manufacturing
activities based on the suggestions provided by the smart
Financial
Retailer Institutions
Business Layer
End Customer
Contract
Demand Analysis &
Automation Feedback
Contract Layer
Transaction
Assets Data
Data
Date, Money, Product,
Participants, Equipment,
Contract … Capital …
Data Layer
Barcode Other IS
Manufacture & Quality Inspection Process IOT Sensor Layer
173
contracts. In this way, efficiency and profits are improved in 澶濠濣濗濟濗濜濕濝濢澡澸濝濧濨濦濝濖濩濨濙濘澔激濙濘濛濙濦
these enterprises.
濉濤濠濣濕濘澔濘濕濨濕

III. CASE STUDY 澸濕濨濕澔濫濝濨濜澔

濕濗濗濙濧濧澔濗濣濢濨濦濣濠

In this section, we will use a laptop supply chain for a 激濣濛濝濧濨濝濗澔

濃濤濙濦濕濨濣濦 濆濙濨濕濝濠濙濦濧
case study. Based on blockchain and RFID, a system for 澷濣濡濤濙濨濝濨濝濣濢
濇濩濤濤濠濝濙濦濧
agri-food traceability is proposed in China, in which the 激濣濛濝濧濨濝濗澔
澷濣濡濤濙濨濝濨濝濣濢 澵濗濗濙濧濧澔濘濕濨濕
澸濝濛濝濨濕濠澔澽濘濙濢濨濝濨濭
logistics data of agri-food is shared among farmers, plants, 濃濤濙濦濕濨濣濦 澷濣濡濤濙濨濝濨濝濣濢
濆濙濨濕濝濠濙濦濧
warehouse centers, sales markets, transport vehicles and 濇濩濤濤濠濝濙濦濧 澺濝濢濕濢濗濝濕濠
澽濢濧濨濝濨濩濨濝濣濢
regulatory agency [5]. Suppliers on the supply chain provide
components and parts to the manufacturers. When these 濁濕濢濩濚濕濗濨濩濦濙濦

components are produced, based on the data collected from

IoT Sensors and their numerically controlled machine tools Figure 3. Digital Identity
system, the qualities of processes and products are monitored There are also contracts between manufacturers and
in real time. In this way, suppliers and manufacturers are suppliers. For example, if the smart contracts detect that
able to find errors in time and control it timely. As shown in some products are not able to fulfill the standards requested
Figure 2, quality data in production processes and inspection by the manufacturers, these products would be rejected and
processes would be uploaded to and stored in blockchain. the payment will be returned back to the manufacturers
With the real-time quality data, process quality and product automatically. As shown in figure 4, contracts are deployed
quality are evaluated in smart contracts and the results are on both sides in the partnership. The contracts would be
sent back to suppliers, manufacturer and retailers. executed automatically and the execution results are sent to
stakeholders on both sides when some unexpected errors
澶濠濣濗濟濗濜濕濝濢澡澸濝濧濨濦濝濖濩濨濙濘澔激濙濘濛濙濦 happen.
澸濕濨濕澔濚濣濦澔
濙濪濕濠濩濕濨濝濢濛澔
濥濩濕濠濝濨濭 濉濤濠濣濕濘澔 澶濠濣濗濟濗濜濕濝濢澡澸濝濧濨濦濝濖濩濨濙濘澔激濙濘濛濙濦
濉濤濠濣濕濘澔 濉濤濠濣濕濘澔 濥濩濕濠濝濨濭澔
濥濩濕濠濝濨濭澔 濆濙濕濠澔濈濝濡濙澔濅濩濕濠濝濨濭澔 濚濙濙濘濖濕濗濟澔
濥濩濕濠濝濨濭澔
濘濕濨濕 濁濣濢濝濨濣濦濝濢濛澔澚澔 濘濕濨濕 濘濕濨濕 濉濤濠濣濕濘澔 澷濣濢濨濦濕濗濨濧澔 濉濤濠濣濕濘澔
澷濣濢濨濦濣濠 濗濣濢濨濦濕濗濨濧 濨濣澔濙濬濙濗濩濨濙 濗濣濢濨濦濕濗濨濧
澺濙濙濘濖濕濗濟 濉濤濠濣濕濘澔 濉濤濠濣濕濘澔
濗濣濢濨濦濕濗濨濧 濗濣濢濨濦濕濗濨濧
澷濣濢濨濦濕濗濨澔
澺濙濙濘濖濕濗濟 濆濙濨濕濝濠濙濦濧 澵濩濨濣濡濕濨濝濣濢
濇濩濤濤濠濝濙濦濧 澺濙濙濘濖濕濗濟 濇濩濤濤濠濝濙濦濧 澹濬濙濗濩濨濝濣濢澔濆濙濧濩濠濨澔 澹濬濙濗濩濨濝濣濢澔濆濙濧濩濠濨澔 濆濙濨濕濝濠濙濦濧

澷濣濡濤濣濢濙濢濨濧
濄濦濣濘濩濗濨濧
濁濕濢濩濚濕濗濨濩濦濙濦 澹濬濙濗濩濨濝濣濢澔 澹濬濙濗濩濨濝濣濢澔
濆濙濧濩濠濨澔 濆濙濧濩濠濨澔
激濣濛濝濧濨濝濗澔 激濣濛濝濧濨濝濗澔
濃濤濙濦濕濨濣濦 濃濤濙濦濕濨濣濦
激濣濛濝濧濨濝濗澔
濁濕濢濩濚濕濗濨濩濦濙濦
濃濤濙濦濕濨濣濦濧
Figure 2. Real Time Quality Monitoring and Control

There is a possibility that competitive suppliers are Figure 4. Contract Automation

providing same kind of components such as CPU or screens.
Under the control of smart contracts, every competitor has its
own digital identity with particular access authority to the
data on blockchain. For example, Intel and AMD are not
able to get access to the data from each other. Moreover, the
manufacturers are not able to get access to the data in case
they have revealed the data of suppliers to another. However,
the manufacturers rely on the smart contracts to monitor the
qualities. As shown in figure 3, enterprises on the supply
chain can upload data with no restriction. However,
accessing data is controlled by smart contracts with the
means of digital identity so that secret data can be protected.
With the data on blockchain and smart contracts, all
suppliers are able to get access to the analysis and feedback
of customers on the products so they can decide how to make
adjustment on their production.
During the logistics process, sensors detect the data of
environment, including temperature, vibration and humidity.
GPS can trace the position of the train, ship and plane.
Therefore, logistics providers are able to use smart contracts
to plan their routes and ways of transportation intelligently.
As shown in figure 5, data about transportation is uploaded
from suppliers and manufacturers. Smart contracts make
logistics plans based on the quantities and positions of
products. Digital identity helps to keep confidential for the
logistics providers from their competitors on the supply
chain as well.

174
 澶濠濣濗濟濗濜濕濝濢澡澸濝濧濨濦濝濖濩濨濙濘澔激濙濘濛濙濦
the blockchain technology. Furthermore, it provides a
澸濕濨濕澔濕濖濣濩濨澔
濛濣濣濘濧澔濨濣澔 澸濕濨濕澔濚濣濦澔 澸濕濨濕澔濕濖濣濩濨澔
foundation to develop theories about information resource
濨濦濕濢濧濤濣濦濨 激濣濛濝濧濨濝濗濧澔
濄濠濕濢濢濝濢濛
濛濣濣濘濧澔濨濣澔
濨濦濕濢濧濤濣濦濨
management in distributed, virtual organizations, especially
濇濩濤濤濠濝濙濦澔
濁濕濢濩濚濕濗濨濩濦濙濦澔 distributed, cross-organizational and decentralized
澵 激濣濛濝濧濨濝濗濧澔濄濠濕濢濢濝濢濛
濇濩濤濤濠濝濙濦澔
澸
management theory. For our future study, we will invite
澷
濇濩濤濤濠濝濙濦澔 濁濕濢濩濚濕濗濨濩濦濙濦澔 domain experts to evaluate the proposed framework. The
澶 激濣濛濝濧濨濝濗濧澔 澹
濄濠濕濢濧
濄濦濣濘濩濗濨濧
framework will be applied to design intelligent SCQI system
澷濣濡濤濣濢濙濢濨濧 for a real-world application.
濆濙濨濕濝濠濙濦澔
澺
激濣濛濝濧濨濝濗澔 ACKNOWLEDGMENT
濃濤濙濦濕濨濣濦澔澸 濆濙濨濕濝濠濙濦澔
激濣濛濝濧濨濝濗澔 濄濦濣濘濩濗濨濧
濃濤濙濦濕濨濣濦澔澹
澻
This work was supported by Natural Science Foundation
Figure 5. Logistics Planning
of China (NSFC No. 71701091, 71701043, and 71704078)
The retailers use smart contracts to monitor the processes and the Chinese Ministry of Education Project of Humanities
and products qualities during production processes. When and Social Science (No. 17YJC870020).
internal fault happens, these products are withdrawn while if
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