October 27

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Technology To Improve the Supply Chain And Much More

By Robert Salvador

October 27, 2021


Construction brings together large teams to deliver the built environments, and although the industry is constantly riddled with complexity, regulations, and slow response with change, the tide is finally turning.  

These large teams are beginning to embrace technology and are finding it harder than ever to work without it.  Their openness to collaboration is becoming increasingly widespread. Specifically,  blockchain technology is what’s coming to the forefront.

The Challenge

Over the past year, construction costs have increased dramatically across the country, up to 15%.   With unemployment rising and then dropping again and creating new demand for workers, supply chains breaking, and the rise in energy prices, everything is affected from material costs to transportation.  

Construction businesses are becoming more and more concerned.  It’s clear we need a more resilient supply chain that can readily adapt to future times of crisis and stress.  

The supply chain industry has been doing business in the dark for decades, and to tap into these growth opportunities in such challenging and evolving times, construction businesses are finally focusing on software and encouraging greater use of digital technologies.

What Is Blockchain?

Blockchain is a linked series of “blocks” of data that form a distributed ledger all existing on a decentralized database which chronologically and securely records transactions.”   a fancy name for a collection of accounts—like a checkbook that automatically balances itself. This ledger is home to transactions or contracts that define a project.

Here are the steps simplified

  • Transaction - A data request begins the process
  • Verification - Nodes automatically validate the request
  • Block Addition - A verified block is added to the chain
  • Continuation - The new block is a base for future blocks

Now let’s look at an outline of the construction process

  • Client employs consultants/representatives to create and tender documents
  • Tenders are called and a main contractor engaged
  • The GC then engages multiple sub-contractors to carry out the work
  • A building contract is entered into, administered and monitored by consultants

To complete a project requires that various sign offs, certifications and warranties are checked and confirmed to be in order.

Each consultant has a contract, the client and main contractor have another contract, and it’s the main contractor’s responsibility to manage all the supplies, goods, and subcontractors.  There are many middlemen involved.  Within this hierarchy, there are many various functions that happen, from payment, project handover, damages, disputes, and more.  

With blockchain technology, all the management of the key personnel and the functions can be managed under one location.  

The three principles of blockchain: 

  1. Secure: Multilayer encryption using mathematical functions hides data in a coded string of characters that are difficult to crack
  2. Decentralized: Connections called “nodes” automatically check transactions, leading to a digital paper trail of verified records
  3. Scalable: Because the information isn’t stuck on a central server, blockchain can be scaled to fit very large projects

There are six immediate benefits to the construction industry that blockchain technology provides: 

  1. Predictive asset maintenance
  2. Smart contracts that stay on track
  3. Proactive third-party oversight
  4. Accelerated payment processing
  5. Instantaneous collaboration
  6. Streamlined supply chains

This brings us to DigiBuild, where the blockchain technology platform can bring all parties involved in a project to congregate and collaborate throughout the facilitation of the build.  This is resulting in reduction of costs and allowing the client to have more control and transparency of cost, time, and the overall scope of the project. DigiBuild is a data engine that allows more automation of workflows, transparency of data, and unmatched data insights.

Robert Salvador

About The Author

Rob Salvador is the visionary driving force behind DigiBuild, an experienced builder, project manager and construction technologist. Since the age of 10, Rob has witnessed what it was like, firsthand for his Dad struggling to run his construction company. He eventually started his own construction company and those experiences and the lack of change over that time span led to his mission of creating a better way to operate construction projects and the construction community. Rob’s passion and previous cryptocurrency startup experiences are what led to him becoming a blockchain expert. In 2017 he had his ‘aha moment’ and the idea of 'how to' apply blockchain to construction took form and DigiBuild was born.

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