Babbitt column | Blockchain + Construction: Lubricants for urbanization machines?

1. Industry Overview: Large-scale collaboration in hundreds of industries

The construction industry is a production department specializing in civil engineering, housing construction and equipment installation, as well as engineering survey and design work. Its products are buildings, structures and facilities in a variety of factories, mines, railways, bridges, ports, roads, pipelines, residential and public facilities. According to the current classification of the economic industry, the construction industry can be divided into four major blocks: one is the housing construction industry, the other is the civil engineering construction industry focusing on the construction of the main body of transportation, water conservancy, energy and other facilities; the third is to focus on the medium-term water, The construction and installation industry installed in facilities such as electricity and gas; the fourth is the decoration industry that processes the formed buildings, and other related fields.

The construction industry is a multi-intensive industry of labor, resources and capital. Due to the many fields involved, for many developing countries in the process of urbanization, the construction sector will often become the leading industry for economic development. Statistics show that only the housing construction industry can drive the development of hundreds or even hundreds of sub-sectors. Throughout the decade, many popular positions, from architectural design, civil engineering, engineering supervision, to horticultural design, masonry, and real estate sales, have more or less relationships with the construction industry. So in reality, many people will equate the Kuznets cycle that measures the economic cycle directly with the construction industry cycle, but it is precisely because the construction industry involves too many stakeholders, and many links have not been Can form a brand effect, so there is a high internal coordination and trust costs.

Specifically look at the industrial chain of the construction industry. At the macro level, the industrial chain of the construction industry is relatively simple. The core interests of the project are generally the project owners. The income is the cost obtained by selling/renting the building. The cost paid covers the entire life cycle of the project subject: In the early stage, land and design drawings need to be purchased. In the middle of the project, the construction team needs to be hired for construction and management of the project process, and in the later stage of the project, external sales may be required.

From the microscopic point of view, there are small links within many big links. Various kinds of collaborative frictions appear between these large and small links, which creates an opportunity for the blockchain to be implanted. Due to the limitation of space, this paper does not introduce all kinds of collaborative frictions. Only two factors that have a greater weight on building quality are selected, and the possibility of combining with blockchain technology is analyzed.

WeChat screenshot_20190505142607

2, cost side: hidden huge collaborative friction

As mentioned earlier, a major industry pain point in the construction industry is the high cost of coordination within it. Due to the participation of many stakeholders and the low penetration of additional technologies, the complexity of the construction industry collaboration network far exceeds the general commodity and service transactions. It is easy to generate high collaboration costs due to information asymmetry.

To give a simple example: Assume that the project is inconsistent with the drawings during the construction process, and it is often after a period of time that it is possible to be perceived by the supervisor and then reintroduced. For example, at the beginning of a certain design, a more unique style was adopted. Unexpectedly, after the construction reached a certain level of progress, it was discovered that this architectural style had potential safety hazards under the existing material conditions, and the result had to be returned to the design institute. Re-planning involves a lot of stakeholders, and the parties are suffering.

Faced with this situation, since the 21st century, the construction industry has used computer technology to give a solution called BIM. The program is called Building Information Modeling, and the Chinese translation is “Building Information Modeling”. The technical principle behind it is not difficult to understand: traditional architectural design drawings are presented in 2D flat form, while BIM presents architectural models in 3D form. If supplemented by the timeline, it can also present the dynamic construction process of the building in 4D.

It first appeared in the architectural design process. Because it can present the state of the building more accurately, after years of development, the BIM technology has gradually penetrated from the design link to the planning, construction, operation and maintenance of the project. Article industry chain. In addition to allowing the design team to improve the quality of the design, it also allows the cost team to calculate the material cost, the construction team to simulate the construction process, etc. Due to this comprehensive penetration, the current BIM application model is also called "BIM2." 0 times."

In theory, if BIM technology can be integrated into the whole process of project construction, multiple stakeholders including design institutes, supervisors, and owners will be able to more fully understand the progress of the project and effectively improve the system. s efficiency. Relevant information shows that applying BIM technology to engineering construction can improve the efficiency of the project by 10%, greatly reduce the rework of the project, and significantly improve the management ability of the project quality. For example, the China Zun Building, which is known as the “Beijing's tallest building”, is precisely because of the use of BIM for project management, which saves costs under the conditions of large engineering volume, tight construction period, complex engineering form and limited space. It has achieved faster construction speed in the industry.

However, due to a series of practical reasons, the current promotion of BIM in the industry is not very smooth. Just as we are in the "blockchain technology how to transform the "big move to cloud" system? As mentioned in the article (below) , like all digital technologies, the promotion of BIM faces two bottlenecks, one of which is the issue of trust. At present, most of the architectural drawings are provided by the design institute. However, due to the fact that providing too detailed information may lead to the loss of intellectual property rights, the design of the drawings can be considered with caution. For example, when using 2D drawings, many units only provide paper versions instead of electronics. The version, even if it is available in electronic format, is the one that cannot be edited and modified.

However, the value of BIM in the entire industrial chain is to coordinate various interest groups to actively add more data to the model. For example, the design team actively adds equipment parameters to the materials, and the cost team actively adds the loss, the construction team. Actively add sources of materials, etc., so that the upstream and downstream can make better use of BIM, if you can not edit the drawings on the drawings, the role of BIM will be greatly reduced.

Figure: BIM model has a big advantage over traditional 2D drawings

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In this context, you can consider applying blockchain technology to BIM. By deploying the BIM model usage and modification records, liability risk clauses, and intellectual property attribution information on the blockchain, it is possible to identify and understand the building model in the absence of a third-party intermediary in an authoritative industry. In addition to the source of the information modification, in addition to other encryption techniques, the request to copy the drawing model is rejected to avoid information plagiarism. In this way, there is an opportunity for the design institute to generate trust in other stakeholders, and finally agree to release a modifiable BIM building model.

However, due to a series of reasons, in addition to trust, BIM is faced with many constraints on the channel, which is commonly known as building informationization in the industry. Among the various disturbances, there are reasons for the subjective attitude, the construction industry is more conservative, and the relevant personnel are not willing to learn. On the objective conditions, the BIM software market is still immature, the industry standards are not uniform, and the traditional projects Factors such as incompatibility of management modes have also hindered the landing of BIM. From this situation, the condition of BIM in terms of channel is not a problem at a certain point, but a problem at the system level. In the final analysis, the construction industry in China is still at a development stage compared with other countries. In the early days, only after the industry matured, the related problems will be solved in a timely manner.

3. Revenue side: quality loss in the flow of value chain

It is worth noting that although the construction industry has paid a relatively high coordination cost in the operation process, in many cases, the quality of the project has not improved. When the relevant technology is relatively mature, this quality bottleneck is obviously It cannot be attributed to objective factors. In fact, the current unsatisfactory quality of some buildings is largely caused by human factors, that is, the subcontracting of construction projects.

As mentioned above, because the construction industry involves more collaborators, it is difficult for a single company to complete all tasks. Therefore, the winning bidders often outsource some work, which is also in line with the principle of social division of labor – such as some large projects. The project's high-qualified winning bidders have great advantages in technology management. Companies with lower qualifications have the advantage of integrating mechanical equipment and labor resources. However, the outsourcing of the project is not unlimited. According to the provisions of the Construction Law, the Tendering and Bidding Law and the Contract Law, in the current construction project, the main part cannot be subcontracted and must be operated by the winning bidder. If other parts are to be subcontracted, the owner's consent is required. However, in reality, in order to increase the output value, some enterprises with higher qualifications often subcontract the main project and even all the projects of the winning project after being packaged (commonly known as “big bag”). Make yourself enjoy the benefits without violating current policies.

[Note] Subcontracting refers to the contractor transferring the contracted construction task to a third party after the contracting project, and the assignor withdraws from the on-site contracting relationship, and the assignee becomes the other party's behavior of the contract.

However, although this packaged bale subcontracting behavior may not literally conflict with the current rules, it will inevitably lead to a decline in the quality of the building. First of all, on the technical level, subcontracting is easy for contractors who do not have the corresponding qualifications to carry out engineering construction, which ultimately leads to low engineering quality and chaotic construction market, which is why administrative regulations prohibit it. Secondly, in the interest level, in the process of subcontracting or big package, since the winning bidder is not directly involved in the construction of the project, it has actually become a disguised information intermediary, from which the agency fee is charged in the name of management fee. . As a result, some projects that have been low-priced and have not been profitable have fallen into the hands of the construction party, and the income has become lower, especially in the current workplace to advocate green, environmental protection, civilized construction and other standardized background. The cost of subcontractors has increased significantly over the past. In order to ensure profit margins, subcontractors will use low-quality and inferior materials, cut corners during construction, and the final result of the above actions will ultimately be reflected in the quality of the building.

Under such circumstances, it is necessary for the industry to use blockchain technology to constrain the relevant behaviors. The specific method is to use the blockchain technology in the project bidding process, so that the bidding process can be extremely difficult to be tampered with in the information. The platform is recorded and supervised, greatly reducing the corners of information asymmetry and gray interest. For example, the industry may consider establishing a blockchain fund management platform to upload all of the company's labor contracts, bank transactions, and salary distribution to the blockchain system. Considering that many construction companies' capital flows are highly dependent on the construction costs of the owner's Party A, the relevant transaction records and the flow of funds can allow the licensee with the permission to clearly see whether there is any big in the process of the project. The behavior of a package or even a subcontract.

However, it should be noted that the phenomenon of large packages and even subcontracting of some construction projects is related to the fact that some practitioners are subjectively pursuing interests and not complying with industry rules, but considering that this phenomenon is not an individual behavior, Objectively speaking, the environment of the construction industry should also bear part of the responsibility. Specifically, in the value chain of “owner-winning enterprise-subcontracting enterprise”, both intermediate links may compress all the subcontracting enterprises. Benefits, and thus affect the quality of the project: First, in the "owner-winning enterprise" section, some owners have low prices and bid for the price of the bidding enterprise, so that the bid price of the project is not very high, the market plate is limited; In the "winning enterprise-subcontracting enterprise" section, some high-qualified winning bidders think that it is difficult to profit from seeing the lower bid price, thus changing the profit model and transforming from engineering to intermediary. The “hard money” obtained by the construction site has become the “information matching fee” for the drought and flood protection, which further reduces the income of the construction team.

Therefore, if you want to change the current chaos in the construction industry, the blockchain can certainly provide certain technical support, but in the end, it is necessary to start from improving the industry environment, in the "owner-winning enterprise-subcontracting enterprise" In the value chain, eliminating the industries that may affect the quality of the project, and supplementing the blockchain technology, eliminating some of the possibility of subjective evil, can fundamentally eliminate the emergence of similar phenomena. From this point of view, The improvement of the construction chain of the blockchain is similar to the “blockchain+mining industry” mentioned above. That is to perfect the rules and supplement the information chain.

4, the industry summary: the channel is weak, difficult to support

Due to channel factors (the relevant infrastructure is not mature, industry rules are not established), in the current construction industry, the blockchain is in a relatively embarrassing situation. Considering that this traditional field is not adaptable to technology, it may be difficult for us to see the blockchain technology in the Chinese construction industry for a foreseeable period of time. However, if the channel factor is removed, the construction industry is actually an ideal landing area for blockchain technology. There is not much brand service provider in this industry, and there is also a high-prestige trust intermediary, which is suitable for the block. The application of such distributed ledger technology in the chain, and such an industry, there are still many in the economic society. After all, the subdivisions of various infrastructures are complete, and the industry with a large number of authoritative vacuums is the mainstream of the current economy.

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