The Application of Blockchain-Based Crypto Assets for Integrating the Physical and Financial Supply Chains in the Construction & Engineering Industry
This work addresses the problem of fragmented supply chain integration for the construction and engineering industry by proposing a novel payment settlement mechanism.
This paper explores the integration of physical and financial supply chains in the construction and engineering industry using blockchain-based crypto assets. It demonstrates how conditioning the flow of funds on the flow of products via crypto assets can address the fragmentation caused by reliance on third-party financial institutions, validating this approach with construction progress payments using Ethereum blockchain.
Supply chain integration remains an elusive goal for the construction and engineering industry. The high degree of fragmentation and the reliance on third-party financial institutions has pushed the physical and financial supply chains apart. The paper demonstrates how blockchain-based crypto assets (crypto currencies and crypto tokens) can address this limitation when used for conditioning the flow of funds based on the flow of products. The paper contrasts the integration between cash and product flows in supply chains that rely on fiat currencies and crypto assets for their payment settlement. Two facets of crypto asset-enabled integration, atomicity and granularity, are further introduced. The thesis is validated in the context of construction progress payments. The as-built data captured by unmanned aerial and ground vehicles was passed to an autonomous smart contract-based method that utilizes crypto-currencies and crypto tokens for payment settlement; the resulting payment datasets, written to the Ethereum blockchain, were analyzed in terms of their integration of product and cash flow. The work is concluded with a discussion of findings and their implications for the industry.