Written by: Amit Baporikar (DGM- P&C)
Blockchain for Construction/Infrastructure: Construction and Infrastructure is a project-based industry that plays a major role and contributes greatly to the national economy and socio-economic development of every nation. With complex (execution) chain of operations including procurement, supply chain, payments/accounts settlement, and record-keeping under the project management umbrella. The industry has seen a growing number of new technologies for design and database management but ‘fintech’ applications are not yet discovered to its potent.
Primarily, blockchain is a distributed leger of information, such as transactions, contracts, and agreements, which is recorded in form of database information, this technology is effectively successful in cryptocurrency and can offer an enormous chance of perfection for the construction and infrastructure sector.
A distributed ledger is a simple database but with special properties. It is distributed, meaning that the database is scattered around multiple locations in a shared manner, thus, each participant can interact or transact with one another and eliminates the need for any intermediaries. These interactions are then cryptographically secured and added to – and in the case of a blockchain system – an immutable chain of records.
Presence of Blockchain in Other Industries: The blockchain which is also known as a disruptive technology has already paved its way in many other sectors like banking, healthcare, politics, real estate, legal industry, security, government, rentals, charities, and education.
IBM & SONOCO are successfully using the blockchain for safer vaccinations and safeguard medication efficacy, which was precisely efficacious in COVID vaccination. Whereas, IBM’s Blockchain solutions are already in use for Automotive Industry, Intellectual Property (IP) and Patents Industry, Freight Carriers, and Logistic Industry and Manufacturing.
Blockchain’s prospect for Construction and Infrastructure: The construction industry has regularly been mentioned as one of the world’s most scrappy, high-impact sectors. The best examples for this phenomenon are all those capital infrastructure projects around the world that have a highly fragmented, dispersed, and complex supply chain.
For example, BurjKhalifa is truly the product of international collaboration; over 60 consultants including 30 on-site contracting companies from around the world were involved in the project. At the peak of construction, over 12,000 professionals and skilled workers from more than 100 countries were on site every day.
To manage such an extended supply chain, keep track of work in progress, schedule, cost, and payments, massive determination, and possessions are needed. On top of these challenges’ construction projects experience different systems of mistakes, delays, and accidents at various stages and to varying degrees in itself a greater task. The lack of answerability in the construction industry has been a continuing issue for years and with extremely clasped profit limits, firms are dignified to find ways to cut corners and deflect blame from the resulting fiascos.
These are exactly the main ‘suffering points’ and zones where blockchain can help and make the process more well-organized, because of its crystal clear and accountable technology between all participants tangled in the project. There are potential blockchain applications that have already been made known to and had inspiration on the economy. Some of them can be unswervingly applied to the construction industry and some of them can assist as a basis for a more custom-made application for capital construction projects with regards to the below listed latent applications on an immediate basis:
- Payment
- Procurement
- BIM (Building Information Modeling)
(Interplay of technology and above application to be continued in next episode of BRICK TO BLOCK)
