How can Blockchain improve Procurement & Supply in the Construction industry
When large developments are built they have to navigate a host of issues. Projects can be hard to manage. They often contain fractured sub-contracting & Procurement practices and a distinct lack of Supply Chain transparency. This along with inflation in building materials means that innovation through digital transformation must be explored.
Such innovation that could bring multiple benefits to this industry is adopting Blockchain & Automation to its Procurement & Supply Chain management. Utilising such technology creates efficiency by providing a level of transparency and communication that does not existing in common, linear supply chain management. Each supplier agrees to a consensus agreement with each then set up as a node on the blockchain. Having a permissioned based platform ensures suppliers are able to share data in a secure and digitalised manner, this can be done in a real time manner and at the point of raw materials or required deliveries leaving their origin. Doing so enables more secure, efficient and transparent lines of communication with an additional benefit being authenticity of provenance. Provenance is important in this industry as material quality and origin can be confirmed and authenticated which drives confidence and trust in an industry that is challenging and often deals with a fragmented supply base.
In utilising Blockchain a supporting technology is Smart Contracts, Smart contract automate payments or processes once certain stages or obligations have been fulfilled - utilising such a process means that late payments, remediations and disputes can largely be avoided (When X happens then Y is initiated).
At a time of challenging inflation in an industry that traditionally operates on tight margins utilising digital transformation can build a better supply chain and improve margins via automation. The industry needs to explore and adopt.