By Construction Tech Review | Wednesday, August 05, 2020
Blockchain has always been a significant part of the construction process. However, what role can it play if it is combined with the supply chain?
FREMONT, CA: Blockchain has made significant contributions in transforming the processes in the construction industry as the technology potentially offers greater transparency and oversight across payments and projects. However, there has always been less attention paid to the behavioral and cultural changes that it can foster.
The technology is capable of storing the transaction details in real-time within logical blocks that are linked together cryptographically to generate a verified, chronological record of action that is effectively not possible to tamper with once created.
Technology and trustworthiness
Any claims or disputes in which the stakeholders are interested can be verified against the data held on each block in the digital chain. This single source of data offers an immediately accessible chronology of time-stamped data, thus getting a crystal clear record of cause, effect, and ownership. Besides, this process can provide a real-time audit trail with enhanced management of expenses.
Increased accountability for parties results in better supply chain performance.
The usage of ‘smart contracts’ in construction projects can foster positive changes in the client-contractor relationship. These smart contracts offer automation for the complete breadth of the contracting procedure, i.e., from planning and tendering, via creation and negotiation, and in use from initiation to execution.
Personal relationships are one of the important elements in the foundation of the construction industry. However, by applying the usage of blockchain-based smart contracts to their own operations, contractors and clients can improvise existing relationships.
Apart from payment transparency, the technology can give better clarity about roles and responsibilities during the process of construction and push project partners, i.e., from material suppliers to surveyors in order to perform better.
Besides, the technology is also useful in sending crucial updates to everyone in real-time automatically, such as the delivery of materials on-site, which helps in preventing project delays and the need for rework.
It will not be correct to say that blockchain is a solution to all the challenges faced by the construction industry. However, it can help in driving cultural and behavioral shifts in the sector if it is adopted by contractors and clients alike in real-time. The only hurdle can be the appetite for change.
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