Leveraging blockchain technology for halal supply chains

Halal supply chains have inherent problems or flaws, namely in traceability (ability to verify the location of a product) and in organising product recalls; transportation and warehousing (storage) compliance downstream the supply chain in accordance to halal requirements; end-to-end chain integrity (unbroken chain): from source to point of consumer purchase; different halal systems and interpretations of different markets; and lack of integration of information technology systems.

Transparency of halal supply chains is needed in order to ensure trust and authenticity of a halal brand. Halal blockchains combine the distributed ledger technology with smart contracts, having the potential to create high performance halal supply chain networks.

The main objectives to be achieved with halal blockchains are reliable data and trust of halal supply chains; seamless and efficient halal process from source to point of consumer purchase; sustainability of halal supply chains; consumer confidence in halal brands; and globally recognition of halal blockchains.

The main principles of halal blockchains are first of all that halal blockchain incorporates different Mazhabs of the destination market, in particular the Islamic school of thought, fatwas (religious rulings), and local customs. Halal blockchains should be relevant for both Muslim and non-Muslim countries. Halal certification requirements of the destination market and mutual recognition are hereby critical design principles for halal blockchains. Supply chain participants are automatic aligned and informed on process compliance based on the specific product-market scenario. Authenticity and security of halal blockchains are a priority to protect confidential information and minimise chance and impact of cyber attacks.

Halal blockchains provide clear advantages for manufacturers, brand owners, retailers, logistics service providers, distributors, and halal certification bodies. For a better trust and authenticity of country’s halal brands, halal certification bodies should embrace this new technology to support the halal industry in case of a halal issue, or worse a halal crisis. Halal certification bodies should support the halal certification of logistics service providers, distributors and retailers in order to facilitate a higher compliance in transportation and warehousing downstream the supply chain. Harmonising of halal supply chain standards in different countries will be essential in the coming years to better support halal industries and their global supply chains.

This article is a first article written on an academic research project by the Universiti Malaysia Pahang on the application of blockchain technology for halal supply chains.

For the full article, please visit: http://www.icrjournal.org/icr/index.php/icr/article/view/675