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Blockchain: On the road to a faster, fairer, and greener procurement process for our industry


By Emery Roosburg

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Over the past few years, Lynch Plant Hire has been working closely with our clients’ Innovation Teams to collaborate on future projects that have long term benefits for our industry.

Subsequently, our introduction to Blockchain started earlier this summer when we were invited to collaborate with Costain Group, Deloitte, HS2 and Skanska Costain STRABAG Joint Venture (SCS JV) on their innovative Blockchain/IICC proof of concept. The aim was to create a shared ecosystem across the supply chain to drive a faster, fairer and greener procurement process.

What is Blockchain Technology?

As stated by Rob Hakimian, ‘Blockchain is a form of cryptography that links together blocks of information in a secure chain, where each piece of information is given a specific timestamp and transaction data that is practically impossible to hack or alter. This means that any data being input to the blockchain only has to be inserted once and it can never be altered again, preventing any tampering or human error as the information gets shared throughout the network of parties who need to access it.'

What is its use in our industry?

Alexander Marx, one of the main project leaders, identified three key benefits of blockchain in the construction industry.

The first is to identify bottlenecks in the supply chain where information or processes are held up. Secondly, we can start using smart contracts and payment automation due to an increase in trust in data accuracy. Lastly, blockchain will allow us to track material origination.

Our role as a UAT (User Acceptance Testing) participant:

In UAT there are three types of events that a tester can observe: Bugs, Enhancements and Clarifications. Therefore, our role was to:

  • Verify from an end user’s perspective that the system is working as expected
  • Verify that the system enables you to perform the critical steps required for the business process
  • Identify any bugs and retest the fixes

Results:

At the end of the first phase, HS2 has successfully implemented blockchain in a section of its procurement pipeline to increase trust, efficiency, and value. Using blockchain has reduced the total number of business processes for timesheets and invoices from 24 to 11. This increased speed of payments by 50-60%. Over the lifetime of [HS2’s] SCS sections 1 and 2 main works, this amounted to quite considerable savings. They now envision expanding this much further.

In conclusion, this collaborative project has emphasised the potential for blockchain to bring a new level of standardisation to the construction industry and will help us to move to more of an ecosystem driven approach. Lynch Plant Hire is looking forward to the second phase of the programme.

We hope that others will also join in to adopt this new mindset to drive productivity forward.

Our work on HS2

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