Blockchain-Based Vendor Onboarding and Sanction Screening System for SAP Procurement Modules

Abstract

Traditional vendor onboarding processes within enterprise procurement ecosystems often suffer from
delays, inconsistencies, and compliance vulnerabilities due to manual documentation checks, fragmented KYC
procedures, and siloed AML screening workflows. These inefficiencies increase operational overheads and expose
organizations to regulatory risks, especially when integrating with enterprise resource planning (ERP) systems such
as SAP Materials Management (MM). This paper proposes a blockchain-enabled vendor onboarding framework that
automates credential validation, enhances transparency, and ensures immutability of compliance events. Smart
contracts are utilized to authenticate identity attributes, enforce onboarding policies, and execute automated sanction
screening by interfacing with global watchlists. The architecture enables seamless synchronization with SAP MM
modules for vendor creation, approval workflows, and procurement-related data flows. Furthermore, the
decentralized ledger ensures tamper-proof storage of vendor risk profiles, audit logs, and KYC artifacts, reducing
dependency on centralized repositories. Experimental validation highlights improvements in onboarding speed,
reduction in redundant verification cycles, and enhanced traceability for AML/KYC compliance. The proposed
model demonstrates how blockchain, coupled with SAP MM integration, can streamline compliance-driven
procurement processes and minimize fraud, enhancing trust and security in enterprise supply chains.