Halal blockchains to boost supply chain transparency

A series of high profile halal issues and scandals in recent years with top brands have shown that halal reputation and loyalty from the Muslim consumer can change very quickly. Transparency of halal supply chains is needed in order to ensure trust and authenticity of a halal brand. The principle of a shared database that is safe, open and verifiable without a central operator is an attractive proposition.


What is a halal blockchain?

Blockchain is the main technology behind Bitcoin. Blockchain is already called the fourth industrial revolution. It is a digital public ledger containing stringed data blocks with information, similar to our DNA. It is not stored somewhere centrally, but distributed on many servers throughout the world. Blockchains are encrypted and automatically synchronised in the distributed blockchains and makes them a trusted public ledger that everyone can inspect, but no single user controls.

A halal blockchain is a digital ledger of all halal supply chain transactions that have ever been executed. It is constantly growing as ‘completed’ blocks are added to it with a new set of recordings. The blocks are added to the blockchain in a linear, chronological order. Each node in the halal supply chain network gets a copy of the blockchain, which gets downloaded automatically upon joining the halal supply chain network. The halal blockchain has complete information about the addresses and their supply chain path right from source to the point of consumer purchase. As the halal blockchain database is shared by all nodes participating in a halal supply chain network, information is easily verified by just scanning the QR-code (a two dimensional barcode) on a product.

Blockchains pre-program the halal requirement for the destination market, halal storage-transportation-terminal handling terms, coding of halal on freight documents, and many more.

In a blockchain you can easily identify the parties that committed fraud, as this remains visible. This discourages the industry to commit fraud in halal supply chains. At the same time it allows rating of halal logistics service providers based on the performance of their services.


The urgency

Robust, effective, and efficient halal supply chains are only possible with more intensive collaboration between companies in the supply chain. Blockchain technology allows halal networks to better use available halal assets, like halal warehouses & distribution centres, halal transport & containers, and halal compliant sea & air terminals.

At this moment we see that brand owners have difficulty in dealing with halal issues and a halal crisis, as they are highly dependent on the speed of the halal certification body to verify possible claims of a halal integrity breach. As this verification might take a week, the damage is already done. Blockchains allow for instant verification in a transparent way and effective isolation of the issue.


Halal Blockchain industry innovation project

Brand owners are concerned how best to organise their halal supply chains in the most effective and efficient way. However, I see too many examples of halal supply chains that are not well organised and unnecessary complex.

Universiti Malaysia Pahang is leading research on halal blockchains, lead by Adj. Prof. Dr. Marco Tieman. On Monday 15 May, the faculty of Industrial Management of the Universiti Malaysia Pahang organised the kick-off of the halal blockchain innovation project with the captains of industry. Halal blockchains provide a chance to design halal processes better and more efficient.

For more information visit www.halalsupplychainmanagement.com or contact marco@lbbinternational.com.