Blockchain could unlock desperately needed modernisation in Australias construction industry, according to Professor Srinath Perera from Western Sydney Universitys Centre for Smart Modern Construction.

Blockchain, or distributed ledger technology, shot to mainstream fame around five years ago as the technology underpinning cryptocurrencies such has Bitcoin. It wasnt long before other industries, including construction, recognised the value of secure, transparent transactions that Perera says are almost impossible to fool.

The blockchain buzz has since subsided but R&D continued in promising streams, with the technology underpinning many of the research projects underway at Western Sydney Universitys c4SMC.

Perera, the centres director, told The Fifth Estate that the technology is particularly useful for eradicating supply chain issues.

Construction has long, complicated supply chains. Each precast panel, for example, might be manufactured with cement from one place and aggregates from another place.

Its not easy to keep track of what came from where and, importantly, who has been paid for what. Perera says delayed payments to suppliers adds up to massive overheads that are typically passed on to the client.

Construction companies are known to add on around 20 per cent extra to the construction cost to finance unexpected delays, with building clients unknowingly picking up interest on delayed payments.

Thats why the centre has been working on a blockchain enabled payment system, with each payment captured on a transparent, sequential ledger thats stored on multiple computers rather than a centralised spot. If a payment is missed, the system wont be able to proceed.

Everyone can see what is happening and who is doing what, we can hide identity but show the transaction. That way nobody can cheat in the system.

Perera is confident that such a system can eliminate these extra costs.

He also says managing the supply chain this way will unlock opportunities to monitor embodied carbon extremely accurately.

Using this kind of automated, accurate record will take the guess work out of measuring the distance each element of the supply chain travels, with time spent on trucks, ships or planes making up a significant proportion of a building materials carbon footprint.

We just hit a 45 degrees plus heatwave, [climate change] is a concern for everyone. Going forward, more people will be asking how to reduce carbon emissions.

The next step will be integrating this sort of information into the building management system (BIM) so that its all readily accessible in a neat, central spot. With all this information at hand, it will be easier to make decisions that reduce emissions and costs.

The team of about 15 researchers is also looking to use the technology to monitor compliance by using a distributed ledger to track certification, and for managing property, with a ledger used to capture all the activities involved with buying a property, such as land registration.

Perera is confident the technologies developed by his team can be rolled out fairly quickly. The modelling has been done and the software prototypes have been built. Now its just a matter of commercialising them.

He says the centre has several partnerships and commercial arrangements in the works, and its still too early to say exactly what these will look like.

Blockchain might sound complicated but the user is unlikely to even know they are using it. Perera expects it will be technologies like this that enable rather than burden workers that will fuel the sectors much-needed digital revolution.

He is, however, realistic about the size of the challenge at hand, with construction the second least digitally-enabled sector after agriculture.

Manual, inefficient procurement practices are the thorn in the industrys side, Perera explains.

Procurement is still done in a traditional way, where the subcontractor takes a quote on the telephone and brings things together in an ad hoc way.

He says this is a primitive way of doing things that could be easily resolved with digital procurement technologies.

Digitisation will come hand-in-hand with what he calls the industrialisation of construction. By this he means the shift to more offsite construction, taking advantage of the economies of scale that can be achieved in a factory as opposed to onsite, as well as the improved efficiencies of working out of the weather and in a controlled environment.

Construction costs have plateaued at the same level, he explains, because the volume is unable to increase. When the volume comes up, the costs should come down.

The shift to high tech manufacturing offsite will likely be supported by other innovative technologies, such as robots and exoskeletons, which are Ironman-like suits that people wear to increase their strength and carrying capacity.

He suspects this technology will be useful onsite for a few minor applications but potentially game changing within a production line.

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Why blockchain just might be the answer to better construction - The Fifth Estate