Written By: Amit Boparikar (DGM-P&C)

In this segment of blockchain 2.0, we will talk about how blockchain can address the payment & procurement issues along with BIM to enhance project management effectiveness.

Transparency in Payment & Project Management through Blockchain: At project level, sluggish payments cause risk to suppliers which result indelayed payments.  The cash flow problem in the construction industry hasan ill impact on many established and dependent small-scale industries causing a downfall for them.

While payment processes are significantly escaping from thumb era, digitally permitted work can pledge payments with predetermined terms and smart contract arrangements, to effectively progress many aspects of construction projects.

We will refer to hypothetical example of blockchain governed site working hours register and payment system:A construction laborer enters the site with its ID card for security& HSE reasons.  The evidence about who come in and how much period they worked on site is recorded on a blockchain enabled distributed ledger between the stakeholders.

Thus, no supplementary documentation needed (though work supervision need be implemented stringently) to validate this information, as it has already logged on the Blockchain. Based on the approved terms with regards to the number of worked hours on site, a smart contract can pledge payment and send payment accreditations for all parties if needed.

Blockchain Administered work ledger and Payment System

Blockchain-Enabled Procurement: The prospects of blockchain technology does not just stop at the payment application. It can also transform the current supply chain management of the construction industry, like, safeguarding derivation for structural/construction materials and creating a verified chain of custody transparent for all stakeholders in the supply chain.

Imagine a blockchain application where the explicit construction materials are recorded and traced along the supply chain until the completion of the construction. For instance, as a client, all information on the materials purchased is evident, such as manufacture and quality certificates, together with logistics track until delivery to construction location. Through this unassailable chain of custody, stakeholders can have confidence in the quality, safety specifications and standards of materials. This process is easier, quicker, and less bureaucratic.

Through a blockchain powered platform, instead of manual paper-based credentials and wet signatures, digital tamper-proof approvals can administrate the activities of goods. Moreover, the status of the shipment is reorganized continuously and communicated across all parties involved by the blockchain.

BIM (Building Information Modeling) &Blockchain: While BIM implementation has come a long way in the past decade, it is yet to swing to its full potential. The level of evidence in a model or its development varies from projects to different sectors in the construction industry. The modelling levels are generally designated ‘D = dimensions’ to diversify information classes based on the type of information used/received. It goes from 3D geometry to, in recent years, 7D. Proudly in the Pune Metro project, the BIM is getting utilized to a 5D extent. 

The concept that permit the grouping of BIM and blockchain would result in a combined source of truth that covers all aspects of the project while putting the audit trail of design endorsements, data corroboration, and project management decisions on a blockchain.

Hence, we can distinguish two major ways of utilizing BIM and blockchain collectively:

BIM can syndicate information from the blockchain, such as procurement, particularly during construction.

BIM can assign information to the blockchain such as design, source of data or model modification orders. This information can be used ahead by smart contracts to initiate further action, such as payments or material orders.

Blockchain-Enabled BIM Operational Model

We have previously discussed that by enabling blockchain solutions, the provenance of materials is properly recorded on the blockchain. The BIM model also gets updated during construction to ensure everything is put-up, as planned. If there are necessary modifications, then they are implemented in the model and remain till the end of the life cycle. Smart Asset Management (SAM) systems obtain even more traction in the industry.

To conclude, the construction and infrastructure sector have passed through a series of revolution. This renovation is moderately digital to improve productivity and digital workflows. The current rank-order based status quo model is not sustainable. Blockchain technology has the latent to change and simplify this modernization.