Blockchain technology and smart contracts: A potential tool for improving operational profit margin
DOI:
https://doi.org/10.18559/ref.2025.2.2022Keywords:
blockchain, smart contracts, COGS, EBIT, procurement, inventory, profit margin, corporate operationsAbstract
This study presents a practical framework for implementing blockchain technology, specifically smart contracts, to optimise operations and enhance financial performance in the Consumer Packaged Goods (CPG) sector. It identifies best practices for operational efficiency and outlines the structural flow and challenges of implementing smart contracts in a small-scale CPG company. While blockchain is often associated with cryptocurrency, its value lies in enhancing core business processes such as vendor selection, procurement and legal compliance monitoring. The framework integrates blockchain-enabled smart contracts with project management lifecycle updates to streamline operations, enhance cash flow and reduce the Cost of Goods Sold (COGS). It highlights how procurement processes, legal requirements and vendor management can be streamlined through smart contracts, providing transparency, reducing delays and ensuring regulatory compliance. Blockchain is a decentralised database, and its applications span procurement, production processes and inventory management. However, leveraging blockchain effectively requires smart contracts. Integrating these contracts with project management tools ensures efficient operations and measurable financial metrics. This interdisciplinary approach combines technology, business law and project management to deliver actionable insights. The study highlights how modest operational efficiencies can drive profitability in low-margin industries, such as CPG, and establishes a foundation for future implementation studies across other sectors.
JEL Classification
Capital Budgeting • Fixed Investment and Inventory Studies • Capacity (G31)
Innovation and Invention: Processes and Incentives (O31)
Open Innovation (O36)
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Copyright (c) 2025 Ameeta Jaiswal-Dale, Romain M. Lorentz, Ernest L. Owens, Bhuvanesh Singh
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