Investigating the Impact of Blockchain Technology in Solving the Challenges of the Halal Food Supply Chain

Subject Areas : Management (Operations Research)

Mojtaba Farrokh ¹ , Mohammad Mehrabioun ² , Amirhosein Mashayekhi ³

1 - Assistant Professor, Department of Information Technology and Operations Management, Faculty of Management, Khwarazmi University, Tehran, Iran
2 - .Assistant Professor of Information Technology, Faculty of Management, Kharazmi University, Tehran, Iran
3 - MSc.Department of Industrial Management, Khwarazmi University, Tehran, Iran

Received: 2023-01-07 Accepted : 2023-07-01 Published : 2024-07-03

Keywords: blockchain technology, halal food supply chain, smart contracts, ISM,

Abstract :

The main concern in the halal food supply chain is its halal integrity. Tracking systems based on emerging technologies are now used in the halal food supply chain to gain consumers' trust. To reduce the challenges of the halal food supply chain, blockchain technology is being used to improve its transparency and greater integrity. In the present research, by reviewing the related literature and experts' opinions, after identifying the challenges, functions, and technical requirements of blockchain in the halal food supply chain, the relationships among these have been determined through Interpretive Structural Modeling (ISM), and a procedure for its application has been provided. The results of this study show that if the decision makers want to apply blockchain technology in the halal food supply chain, they should first select and improve the tools and technical requirements of blockchain as an infrastructure and then, reduce the challenges based on the relationship between them, which can lead to an increase in customer satisfaction.

 

Key Words:

blockchain technology, halal food supply chain, smart contracts, ISM

 

 

 

 

 

 

1. Introduction

Halal supply chain consists of stages from the beginning of production and procurement of halal materials to the delivery of the final product to consumers. This process encompasses the entire supply chain during slaughter, production, storage, and transportation. In addition to using halal raw materials and producing halal products, halal integrity must be ensured throughout the value chain (Zailani et al., 2017). The blockchain technology contributes to improving the halal supply chain from business, technical, and informational perspectives. However, there is a research gap in identifying the capabilities, requirements, and technical specifications of blockchain technology for addressing the challenges of halal food supply chain. Furthermore, there is a lack of modeling the relationship between these capabilities and functions for various decision-making and strategy development in the past research. Hence, the identification and modeling of capabilities, functions, and technical specifications for blockchain acceptance in the halal food supply chain are deemed a research necessity. Given the above, the aim of this study is to investigate the application of blockchain technology in addressing the challenges of the halal food supply chain. To achieve this goal, after identifying these capabilities and functions, we will seek to determine the role of blockchain in addressing these challenges. Additionally, a framework for the application of blockchain in this industry's supply chain will be proposed by interpretive structural modeling (ISM) method.

2.Literature Review

The halal industry faces issues of inaccuracy and lack of authenticity due to the difficulty of controlling the entire system. Additionally, not all players in the halal supply chain have access to information, which can significantly reduce supply chain integrity (Abidin & Perdana, 2020). In this section, we review the literature on research regarding the halal food supply chain and the role of blockchain in it. Chandra et al. (2019) addressed various challenges in the halal food industry by examining the halal food supply chain and conducting empirical studies in this area, investigating how the emerging technology of blockchain can redefine the current system and product tracking. Rejeb and Bell (2019) proposed a food tracking system in the halal meat supply chain based on Islamic food law using blockchain and the Internet of Things, by examining the risks of the halal food supply chain such as meat. Azzi et al. (2019) explained how to integrate blockchain into the supply chain structure to create a reliable, transparent, credible, and secure system. Azmi et al. (2020) introduced nine significant risks in the halal food supply chain literature, including human resources, processing risks, logistics risks, raw material risks, halal certification issuance, traceability capabilities, market specifications, outsourcing methods, and product features.

3.Methodology

To identify the capabilities, functions, and technical specifications of blockchain in addressing the challenges of the halal food supply chain, a structured questionnaire was used to collect the expert opinions which were analyzed using ISM. Four stages can be envisioned for this research, as outlined below.

First Stage: Identifying the capabilities of blockchain for addressing the challenges of the halal supply chain through a review of past research.

Second Stage: Identifying the functions and technical specifications of blockchain in managing the halal supply chain through a review of past research.

Third Stage: Designing and validating an expert questionnaire to identify the relationships among capabilities, functions, and technical specifications of blockchain in relation to the challenges of the halal food supply chain.

Fourth Stage: Identifying direct and indirect relationships among capabilities, functions, and technical specifications of blockchain in relation to the challenges of the halal food supply chain and categorizing these variables to better understand their interactions using ISM.

4.Results

In the present study, a review of the related literature regarding the challenges in the halal food supply chain, blockchain technology, its capabilities, and applications was conducted. This study is one of the first researches examining the relationship among challenges in the halal food supply chain, technical specifications, and functions of blockchain using ISM, and their impact on the performance of the halal food supply chain. The findings offer recommendations for decision-makers and managers in supply chains, especially in the halal food industry, regarding the use of blockchain technology to increase collaboration and trust among partners in the supply chain, improve product quality, and consequently enhance customer satisfaction. Through the literature review, it was identified that the halal food supply chain faces numerous challenges that can be addressed using blockchain technology. The study focused on examining and identifying the capabilities of blockchain in addressing the challenges of the halal food supply chain, its functions, and technical specifications. Additionally, the application of blockchain to overcome challenges was explored, and some criteria were classified using ISM to propose a model based on this classification. Rarely has previous research categorized and prioritized the capabilities and functions of blockchain in relation to the challenges of the halal food supply chain. In this study, we identified these capabilities and examined the role of blockchain in addressing them.

5.Discussion

According to the findings of this research, when the decision to implement blockchain in the supply chain is made, special attention to the tools and technical specifications of blockchain as the infrastructure becomes vital to improve the needs of the blockchain and gain greater flexibility in the supply chain. Since one of the most important features of blockchain is its public and private key-based encryption, the use of this encryption can serve as a foundation for validating the credibility of a transaction in various networks, thereby, increasing the accuracy of information and access to them across the entire network and among organizations. As the accuracy of information such as information related to compliance with halal standards, raw material information, and production process information can be a significant step in increasing trust in the supply chain, fundamental blockchain technologies such as hashing, consensus algorithms, and public and private key variables can play a crucial role in building trust and ensuring information accuracy, which ultimately can lead to trust and cohesion in the food supply chain. Additionally, a smart contract is another fundamental blockchain technology that plays a crucial role in streamlining the halal supply chain. The use of smart contracts in the supply chain reduces costs and delays, automates parts of organizational processes such as confirming compliance, and automates confirmation of raw material information, leading to improved efficiency, cost savings, increased productivity, and labor savings. Additionally, the organization's move towards implementing fundamental blockchain technologies can accelerate the integration of blockchain technology with emerging technologies such as AI and IoT. Different types of "hash" and "consensus algorithms" make information more accessible in the supply chain, leading to increased transparency in halal food supply chain activities and real-time visibility of all activities. "Transparency" and "visibility" are two key variables in the supply chain that, with direct and indirect effects on other elements, help manage the challenges of the halal food supply chain more effectively. Visibility provides greater control, flexibility, and optimal product flow throughout the supply chain. Visibility can also indicate product quality parameters at each stage, ensuring product quality at the end of production.

 

 

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