As mentioned, the construction industry has historically been one of the industries with the lowest levels of digitalization. However, improved digitalization could be used to increase the traceability which will improve the transparency, and thereby the supply chain visibility. Thus, digitalization and information technologies have been pointed out as key enablers for implementing CE business models in supply chains (Christopher, 2016; Kouhizadeh et al., 2019; Demestichas & Daskalakis, 2020; Mastos et al., 2021). We will therefore go through how digitalization could improve visibility and the potential challenges in the construction industry.
3.5.1 Improving Visibility
Leading firms and their network have accepted that the key to successful supply chain management is a well-functioning information system (Christopher, 2016).
These firms recognise information technologies are key to improve responsiveness and efficiency, and understand that information systems are changing firm structures and reducing cost and risk in the supply chain (Nooraie & Parast, 2015;
Christopher, 2016). As the digital transformation has gained considerable attention within the construction industry recently, there are now multiple options for how to
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capture information about the construction components. Computational devices enabled to collect information are now used in all aspects of a construction project.
Therefore, there is a new focus on looking at the projects not only as deliverable physical products, they are also digital information platforms (Whyte, 2019).
In accordance with this research topic, several researchers highlight the emergence of new information technologies and the importance of improved information technologies as an enabler for CE (Whyte, 2019; Kouhizadeh et al. 2019;
Demestichas & Daskalakis, 2020; Mastos et al., 2021). New technologies could help improve the supply chain traceability and thereby transparency which will lead to improved supply chain visibility. This way it could be possible to get improved and updated information about materials and products used, and use them in a circular system for reuse or recycling. Demestichas and Daskalakis (2020, p. 1) states that;
“Cutting-edge technologies, such as big data, cloud computing, cyber- physical systems, internet of things (IoT), virtual and augmented reality, and blockchain, can play an integral role in the embracing of CE concepts and the rollout of CE programs by governments, organizations, and society as a whole.”
Demestichas and Daskalakis (2020) did a review of different technologies which could function as enablers for CE, and some of the identified were smart tags, digital twins and IoT. Radio-frequency identification (RFID) and smart tags are some of the more widely used technologies. Smart tags gives each product a unique identification and improves tracing of the product itself, but also the environmental status. BIM is a digital twin technology which creates accurate virtual building models (Demestichas & Daskalakis, 2020). BIM has the potential to improve visualisation, identification, construction and operational issues. Swift, Ness, Kim, Gelder, Jenkins and Xing (2017) underlined that the combination of RFID and BIM could make construction products and materials more traceable, adaptable and reusable. Another major facilitator for CE which was identified in the study was IoT. This is a global network of interconnected objects with unique identifier codes and standard protocols for communication (Demestichas & Daskalakis, 2020). BCT has also raised attention among CE researchers recently due, among other, its traceability and transparency and security aspects (Kouhizadeh et al. 2019;
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Demestichas & Daskalakis, 2020; Mastos et al., 2021). This we will come back to in section 3.6 Blockchain Technologies.
3.5.2 Challenges with Digitalization
Even though there has been a considerable focus on digitalizing the construction projects recently, the industry is still in its infancy compared to other industries when looking at the level of digitalization (Alaloul, Liew, Zawawi & Mohammed, 2018). The low levels of technology in the industry could create problems with visibility as information is still heavily reliant on manual collection of data on resources. When crucial material and building information is collected manually, errors are inevitable (Young, Haas, Goodrum & Caldas, 2011). In addition, the industry has often utilized new digital tools to optimize one specific task, in a specific part of the supply chain, instead of looking at the whole picture (Digitalt Veikart 2.0, 2020). This implies that there is a need for a better way of transferring information, in order to improve visibility in terms of transparency and traceability.
Whyte (2019) states that as digitalization opens up for new and improved ways of collecting and storing information, and project information grows, it is important to establish common standards for which information platforms to use, and how to
“sorting, analysing, storing and retiring” the information. This is in order to enable efficient information flow between the different supply chain actors within every new construction project (Whyte, 2019). Without information being sorted, analysed and stored in an orderly way, increased material information could potentially create more troubles with visibility in the supply chain. There have been substantial efforts in trying to standardize information data and reach a shared platform (Whyte, 2019; Digital Veikart 2.0; 2020), however, due to the previously mentioned problems connected to industry structure, complexity and the competitive environment it is difficult.
Furthermore, as there might be multiple different versions of digital information connected to one project, it is important to ensure that the latest version is always used, and that it is possible to trace decision making processes. Digital Veikart 2.0 (2020) concludes that to enable a seamless and digital flow of information in the construction industry, the industry needs to develop a shared platform for
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collaboration where the different parties “talk the same language”. The industry needs to agree upon how they are going to digitalize to avoid unoptimized solutions, where all companies utilize different technologies for information sharing.