Prov Prod Application of AI and

ider user Blockchain for Halal Supply

Chain
Proc
Reta
essi Prof. Dr. Ir. Yandra Arkeman, M.Eng.
iler
Distr ng Department of Agroindustrial Technology
Head of Agro-Maritime Logistics Study Program
BRAIN (Blockchain, Robotic and Artifical Intelligence Networks)
ibuti Halal Science Center
IPB University
on
 Yandra Arkeman

• PhD in Intelligent Manufacturing Systems, Australia

• Post Doctoral in Artificial Intelligence, Japan and USA
• Professor of Agroindustrial Technology, IPB University

• Member of HIPI (Himpunan Informatika Pertanian Indonesia)

• Board Member of APFITA (Asia Pacific Federation of Information
Technology in Agriculture)
• Member of ISLI (Institute of SupplyChain and Logistics Indonesia)
• Lecturer in Department of Computer Science, IPB University
Key Points of Presentation 1/2

• Importance of the Halal Industry

• Weaknesses in the current Halal Logistics
and Supply Chain Systems
• The absence of a good traceability
system
• The information system is still manual
or semi-automatic
• The degree of automation and
digitalization is still low
 Key Points of Presentation 2/2

• Therefore, a digital transformation is

needed along the Halal Supply Chain
• Three important things that need to be
implemented at this time are:
• To improve traceability system using
blockchain
• Integration of blockchain with
Artificial Intelligence (AI) to increase
the capability of the system →
Smart Blockchain
1. Importance of the Halal Industry
 Indonesia's Potential as a Developer of
the Halal Industry
• Indonesia only ranks 10th in the halal food production

• With the largest Muslim population in the world, Indonesia has

the potential to become a major player in the world's halal
products
• The development of the halal industry has actually become
one of the focuses of development in Indonesia
Issuance of Presidential Regulation No. 28/2020 on the National
Committee on Sharia Economics and Finance (KNEKS)
 Weaknesses of the Current Halal Industry

The current halal industry still

has drawbacks and
weaknesses:
❖The absence of a good, reliable and
trustworthy traceability system

❖The current system is still manual or

semi-automatic using simple computer
programs
 Solution
Digital technology that can be used in the
halal industry to improve the traceability
Salah satu system
teknologiisdigital
blockchain
yang dapat digunakan
industri halal untuk meningkatkan sistem
Blockchain alone
ketertelusuran is not
adalah sufficient to build
blockchain. a
robust halal system, so it needs to be
synergized with Artificial Intelligence (AI)

Smart Blockchain
2. Blockchain
Blockchain

• Peer to peer distributed general ledger

• Revolution in data storage and recording technology (Data Base)

• Centralized vs Distributed (Decentralized) general ledger

• See next Figures
 Why Blockchain? 13

Transparency

Immutability

Authentication/Provenance

Reduced Transaction Costs

Centralized General Ledger
Distributed General Ledger

1 2 3 1 2 3

1 2 3 1 2 3
Block
• "Block" consists of 3 main
Data components:
• Data
Hash • Hash
• Hash from the previous block
• Cryptography

Hash from the previous block

Block
• Data in a block
• Can contain anything depending on needs
• Hash
• Hash is unique, similar to a fingerprint
• Hash functions to identify blocks and their contents
• Hash is calculated after the block is created
• Changing the contents in the block, the hash will also be changed so it is
useful for detecting changes of the contents in a block
• Hash from the previous block
• The hash from the previous block will be linked to the next block to form a
"chain" → Blockchain
Example of a Blockchain

1 2 3

Hash: 3L3H Hash: 5B7C Hash: 3R4N

Previous Hash : 0000 Previous Hash : 3L3H Previous Hash : 5B7C

The 1st Blok

“Genesis Block”
Unilateral Data Change

1 2 3

Hash: 3L3H Hash: 5B7C Hash: 3R4N

3R0R
Previous Hash : 0000 Previous Hash : 3L3H Previous Hash : 5B7C

?
 http://ipb.ac.id 20

3. Blockchain Application

• The use of blockchain was originally for peer to peer purchase

transactions using digital money (crypto currency) such as
bitcoin, ethereum, etc.
• Bitcoin uses blockchain but blockchain is NOT bitcoin
• In today’s economy, blockchain is used in logistics and supply
chain system especially for traceability
 http://ipb.ac.id 21

Blockchain Applications

Supply chain management Quality assurance  carry

 track the movement of out investigations and
goods, their origin, quantity execute the necessary
and so forth actions

Smart contracts
Accounting  Incorruptible
 validated, signed and
bookkeeping platform or
enforced agreements
ledger
automatically

Sumber: Tran Chau Anh & Le Thi Ngoc Anh


Blockchain Applications
Voting  diminish electoral
fraud
Energy supply  track
renewable energy through
tradable certificates
Sumber: Tran Chau Anh & Le Thi Ngoc Anh
http://ipb.ac.id 22
Stock exchange  reduce
the high costs while
speeding the process for
fast transactions.
Peer-to-peer global
transactions  Bitcoin and
every other cryptocurrency
fast, secure and cheap
transfer of funds
 Industry Use Cases 23

Food Safety:

• IBM, Walmart, Kroger, Dole, McCormick & Company, Golden State Foods, Driscoll’s Inc, McLane
Co.
• Cargill created a distributed ledger for key stakeholders in the supply chain to track Honeysuckle
White brand turkey from family farm to table with a blockchain-based solution

Mining: BHP Biliton will use blockchain to record movements of wellbore rock and fluid samples and
better secure the real-time data that is generated during delivery

Sweetbridge (AZ): Aims to unlock asset liquidity by creating an economy based on its digital tokens,
Bridgecoin and Sweetcoin

IBM and Maersk: Announced a joint venture to deploy a blockchain-based electronic shipping system
that will digitize supply chains and track international cargo in real time
 Real Examples of Blockchain Applications
for Halal Supply Chain
(IPB University)

Designing a Transparent Distributed Systems for Halal Supply Chains

using Blockchain Technology

(Desi Novianti, Yandra Arkeman, Muhammad Nabil Almunawar,

Liesbetini Haditjaroko and Andes Ismayana)
 Smart Contract
Smart Contract Automatic Smart Contract
Transfer to Logistic
Automatic Transfer
Automatic Transfer to Request Received Manufacture
Request Received to Wholesaler
Halal Organisation Raw Material sent
And Sent to
to Manufacture Wholesaler Request Received
and Sent to Reseller

Wholesaler Retailer
LPPOM MUI Supplier/Raw Material Warehouse/Storage
Manufacture
Enter Retailer Information
Enter Warehouse Information
Enter Certification Information Enter Raw Material Information Enter Manufacture Information Enter Wholesaler Information Submit Requests Product
Submit Raw Material Requests Submit Requests for Processed Food
Detail Information
Logistic Saved
Payment Detail
Saved Smart Contract
Smart Contract Smart Contract Smart Contract Smart Contract Smart Contract
Manufacture and submit Material Warehouse
Raw Material Information Saved Information Saved Information Saved
Wholesaler and Request for
Certification Information Saving Payment Detail Processed Food Saved
Saved Retailer and Submit Request
PUBLIC BLOCKCHAIN Product Saved
Detail Information
Logistic Saved

Payment Detail Saved

Halal Supply Chain Design

Smart Contract

Mobile App
Customer
Scans barcode and back trace the quality of the food items
The Best Paper Award

International Conference On Business

Economics And Finance -
Universitas Brunei Darusalam
ICBEF 2019
Designing a Transparent Distributed Systems for Halal Supply
Chains using Blockchain Technology
(Desi Novianti, Yandra Arkeman, Muhammad Nabil Almunawar,
Liesbetini Haditjaroko and Andes Ismayana)
Integration of Blockchain and ERP for Halal Beef Product Traceability
System
Design A
Halal Product
Profile

Halal Product halal

Customer Scan slaughterhouse

Halal Product with

QR Code H H

Blockchain

H H
Store Smart Contract
Halal transportation

H H

Distributor

Transportation
Adhi Kusnadi, S.T, M.Si production Halal Warehouse
Prof. Dr. Ir. Yandra Arkeman, M.Eng. warehouse
Industry
Prof. Dr. Ir. Khaswar Syamsu, M.Sc
1
9
Dr. Sony Hartono Wijaya, S.Kom, M.Kom
METHOD Design Explanation

Every actor in the supply chain of halal beef products except consumers:
1. Have Data :
- Halal Certificate, Halal Assurance System
- Data Product, including Lot number.
2. Enter to ERP (Enterprise Resource Planning) system
- Data from actors are inputted into ERP.
- ERP generates QR Code to be pasted on the product.
3. Input Data to Blockchain
- ERP data output sent to Blockchain
- Blok data is secured by cryptograph.
- Blok data can be used by client/another ERP system
Every actors can trace the products via QR Code using a smartphone or computer

2
9
METHODS
Detail A
Traceability
System
Halal
Certificate

Halal
Product

Product
Data

Another actor in
Supply Chain

3
9
METODOLOGI
Detail A Explanation

▪ The Halal Assurance System (SJH MUI) and product data are integrated into
the ERP system.
▪ The ERP system will generate or update QR Code data to be pasted on halal
beef products.
▪ Data from ERP adapted to smart contracts:
- If pass halal criteria, beef products will be forwarded to the next supply
chain process.
- if it does not match the process is terminated. The data then inputted into
the Blockchain.
▪ Consumers can view the profile of halal meat products, including sources
and additives.

4
9
 Department of
Computer Science
http://cs.ipb.ac.id/

Model design dengan teknologi blockchain pada sistem

penelusuran rantai pasok produk halal daging ayam

Blockchain for Halal Chicken Supply Chain Traceability (Meidhianto Usman, Yandra Arkeman, Irman Hermadi

33
 Pemodelan sistem informasi penelusuran rantai pasok produk halal daging ayam ini akan dilakukan dalam dua tahap

Tahap pertama yaitu dengan membuat sebuah aplikasi Tahap kedua yaitu dengan menambahkan blockchain pada
sistem informasi penelusuran rantai pasok produk halal sistem informasi penelusuran produk halal daging ayam
daging ayam dengan menggunakan android tersebut

Tahap pertama Tahap kedua

34
“
E A S Y TO CHA NG E CO L O RS , P HO TO S .
With a blockchain-based digital
system, if consumers want to track
the transaction history and product
halalness, it can be done in just a
few seconds”
 36
How It Works
 Portfolio of Blockchain Research at BRAIN©, IPB
RESEARCH TITLE
Design of a blockchain-based academic records application

Design of a Supply Chain System for Processed Beef Products using Blockchain Technology

Traceability System in the Supply Chain of Red Chili Commodities Based on Blockchain Technology

Design of a halal supply chain for processed beef agroindustry using blockchain technology

A blockchain-based spatial information system on hotspot points and the location of independent smallholder farmers in
Bangka Regency

Design of a blockchain-based cocoa supply chain

Blockchain-based Agroindustry Supply Chain Ecosystem Model 4.0
Global Blockchain
Networks need to be
Established for Halal
Products
• With global blockchain networks for
the halal industry, it is very easy for
the government to guarantee the
availability of halal products, both for
domestic and foreign consumers.
 4. Innovation

• The ability of blockchain can be synergized with AI to

present a more reliable system called smart blockchain

• AI can be used to help blockchain detect the substance

content of food and agroindustrial products without
damaging them

• IoT can be used to monitor the quality of food and

agroindsutrial products during production, collection,
transportation, processing, inventory and distribution
 Integration of AI and
Blockchain
for Halal Supply Chain

AI & Blockchain = Smart Blockchain

 Blockchain Development to Become
a Smart Blockchain

Designing a Smart and Transparent Distributed Systems for Halal

Supply Chains using Artificial Intelligence and Blockchain

(Yandra Arkeman et al., 2020)

News Article (Republika),
Wednesday, 8 July 2020
Page 5

Synergy between
Blockchain and AI

Smart Blockchain
Blockchain is the secure distributed platform
and AI is the smart device in today’s and
tomorrow’s Halal Supply Chain

System + Device Integration

 Artificial Intelligence

Learning and Adaptive System

Ability to adapt behavior and develop general
rules based on the experiences. Language Understanding
Ability to "understand" and respond to
natural language.

Computer Vision
Ability to analyze perceived scenes by
relating them to internal models that
represent "world knowledge". Problem Solving/Expert System
Ability to formulate problems in appropriate
representations, plan solutions and know when
and how to obtain new information.
Robots and Sensors
A combination of most or all of the
above abilities with the ability to move
around the terrain and manipulate
objects. Speech Recognition
Users can communicate with computers using
voice. An example is the voice search feature
provided by Google.

44
 Tools of Artificial Intelligence
➢ Neural Networks
➢ Fuzzy Logic
➢ Expert Systems
➢ Genetic Algorithms
➢ Cellular Automata

45
 Synergy of Blockchain and AI

✓Identification of substances in food and medicinal

products simply by using a photo or image of the
product (Deep Learning).
✓This tool works great with biscuits, cakes and
some other foods. However, this tool still has
difficulty identifying the content of sushi and
seafood so that until now, this tool is still being
perfected.
✓Once the content of a non-halal substance is
detected, the blockchain tracking system checks the
product travel history. Thus, the source of mixing,
adulteration or contamination by non-halal
materials can be quickly traced and found.
5. Other Innovations?
Figure of Food Logistics System
Application of Advanced Digital Technology

✓In principle, advanced digital technologies

such as AI and blockchain can be used
along the halal supply chain and logistics
systems (from A to Z).
✓However, of course digitalization cannot
be implemented all at once, it must be
employed in stages.
✓For this reason, it is necessary to select the
most important and priority areas first.
 Priority Areas?
• Halal Certification Process
• Halal Audit
• Demand Prediction
• Warehouse Automation
• Office Automation
• Document Processing
• X
• Y
• Z
• (Everything is related to information management and smart tools)
 “Everything that can be digitized in our
industry will be digitized.”
–
Jakob Stausholm, Chief Strategy, Finance
and Transformation Officer, Maersk.
In conclusion, with
DINNERthe development of
SPECIAL

blockchain technology and AI,

we can innovate a trusted smart tools
for the halal industry
Thank you