Smart contract are a digital contract that acts on computer coding in order to update a blockchain ledger. The contract is programmed to act on an IF; THEN; DO basis.
For example:
IF we require a purchase order for 400 units from supplier A for delivery on 01/01/19, we can raise the smart contract and issue this to the suplier for them to sign off to confirm they will deliver 400 units on that date.
THEN the supplier delivers 400 units on 01/01/19 and the goods are scanned into the warehouse.
DO class the order as complete and log to the blockchain ledger along with documentation (shipping docs, customs clearance paperwork and warehouse GRN)
OR
THEN the supplier delivers just 300 units on the 01/01/19
DO not class the order as complete and raise a query to the supplier, courier and procurement team for follow up.
Regardless of the full or partial delivery the information will be logged to the blockchain so full transparency is available.