Blockchain: Implications and Use Cases for the EPC Industry
But BitCoin and its usefulness as a currency are really a product of the technology behind it, known as “blockchain.”
The term blockchain was coined (no pun intended) after developers discovered they could use the underlying technology from the BitCoin currency for other purposes. The engineering, procurement, and construction (EPC) industry is one of many that could benefit from new applications of this innovative technology, stripped of the crypto-currency layer, and used instead as a record-keeping system. But before we get into the implications for the EPC industry, let’s clarify what exactly a blockchain is.
A blockchain is a digital ledger distributed across a peer-to-peer computer network, the content of which cannot be altered after it’s recorded. Multiple parties have access to this chain and can add to, but not subtract, from it. Each party also has a copy of the chain, which can be checked against the other copies across the network to provide multiple points of verification for transactions or exchanges between parties. These records are formed into encrypted blocks of information linked in chronological order, verified by a timestamp, and marked with a unique identifier called a hash. Much like a puzzle piece, the hash is then embedded into the next sequential block, which will eventually have its own hash, continuing the blockchain process.
These fail-safes make it nearly impossible to alter or recreate the chain. The result is a record that can serve as a sole source of truth for all participants. And because all parties have an updated and verified ledger at all times, no consolidation is needed to determine the latest status of a specific record.
So, how can this technology help the EPC industry?
Companies across multiple industries are already employing blockchain to streamline their supply-chain processes. In the context of supply chain management, a blockchain can be used for recording information on material purchased from suppliers for authenticity and verifications, keeping an accurate, real-time ledger of interactions throughout the procurement process from inception to installation. Once a predetermined number of records is reached, a block of information is created, verified by all parties, attached to the chain in an immutable way and shared with everyone involved in the procurement process. Capturing this data in an irrefutable way ensures the right equipment is ordered and paid for at the agreed-upon price. And because everyone in the supply chain always has simultaneous access to an updated copy of the ledger, duplicate transactions and other misinformation is eliminated, along with the need for time-consuming account verifications and reconciliations, further reinforcing trust between parties in the process.
A blockchain-based system can also be used by commissioning and startup teams to manage work packages required to run operational tests, ensuring that electrical and mechanical requirements are met, and providing all the necessary operating instructions and control documents. Since blockchain can capture any and all information exchanges, it can also record every task required to test equipment. The test can be sequenced accordingly, and validated results can be shared with multiple parties for their review, all before the next required test for startup is initiated.
Blockchain can also be developed into a system that ensures manufacturers’ installation manuals are provided with purchased material through the use of “smart contracts”. A smart contract is an automated workflow hosted on the blockchain technology that can define and self-execute certain terms of an agreement between parties. As an illustration, after all necessary documents are gathered and a work package is created, the smart contract can trigger a notification to the field engineer to review the package. Once reviewed, the package would then be sent automatically to the foreman, who can start building with all required information, thus expediting the installation process and ultimately accelerating project delivery.
These use cases are only a few examples of blockchain system functionalities that cut out the timely manual transaction and processing, resulting in a faster, more secure, and more easily verifiable execution of work in the EPC world. Looking to the future, blockchain’s impact on the EPC industry will surely continue to grow as new applications are explored and developed.
Read more on the Bechtel blog.