Preparing construction supply chains for blockchain technology: An investigation of its potential and future directions

Abstract

Blockchain, a peer-to-peer, controlled, distributed database structure, has the potential to profoundly affect current business transactions in the construction industry through smart contracts, cryptocurrencies, and reliable asset tracking. The construction industry is often criticized for being slow in embracing emerging technologies and not effectively diffusing them through its supply chains. Often, the extensive fragmentation, traditional procurement structures, destructive competition, lack of collaboration and transparency, low-profit margins, and human resources are shown as the main culprits for this. As blockchain technology makes its presence felt strongly in many other industries like finance and banking, this study investigates the preparation of construction supply chains for blockchain technology through an explorative analysis. Empirical data for the study were collected through semistructured interviews with 17 subject experts. Alongside presenting a strengths, weaknesses, opportunities, and threats analysis (SWOT), the study exhibits the requirements for and steps toward a construction supply structure facilitated by blockchain technology.

Insights into Blockchain Implementation in Construction: Models for Supply Chain Management

“…The need for upscaling the legacy IT systems in the sector for blockchain, which is highlighted in the literature (Tezel et al, 2020), was also identified from this study. The sector practitioners emphasized that validating the real-life data to be recorded on blockchain is necessary.…”

“…Blockchain research in the BE is progressing over seven strands (Li et al, 2019a) business models and organizational structures. Despite blockchain's potential, various general challenges and requirements for blockchain have been identified for the construction sector such as identifying high-value application areas (Wang et al, 2017), developing practical implementation strategies and plans, ensuring resource, process and workforce readiness (Li et al, 2018), compliance with regulations and laws (Li et al, 2019b), upscaling the legacy IT systems, and capturing and documenting benefits and issues in practice (Tezel et al, 2020). The potential blockchain benefits and challenges outlined for construction supply chains are in line with the blockchain discussions in the general SCM literature (Heiskanen, 2017;Perera et al, 2020).…”

Facilitating Digital Transformation in Construction—A Systematic Review of the Current State of the Art

“…This corresponds to value capture and can be achieved by developing business cases that specify the value added by using digital technologies in construction (Winch and Cha, 2020). Therefore, strategic consideration for implementing digital technologies should incorporate business case development (Tezel et al, 2020;Winch and Cha, 2020). The business case of digital technologies reveals benefits and/or value added in the short and long terms.…”

“…With digital technologies, the construction skill-base is digitally empowered (Craveiroa et al, 2019), and construction processes are transformed (de Soto et al, 2018). Studies have identified the emergence of new construction skills (e.g., construction informatics and block chaining) (Tezel et al, 2020), displacement of jobs such as traditional cost quantification (de Soto et al, 2018), and the evolution of new tasks such as sensor monitoring (Woodhead et al, 2018) as transformations that emerged following the use of digital technologies in construction. The enthusiasm for such transformations is greater among the young generation of construction employees who are keen to use new technologies and deploy new ways of working (Pham et al, 2020;Soman and Whyte, 2020).…”

“…Regardless, a study on blockchain application in construction speculated that external legitimation through the government's role would continue with increasing attention on digital technologies in construction (Chen, 2019a;Tezel et al, 2020).…”