PROPOSAL

HTC: BLOCKCHAIN-BASED HALAL DIGITAL TOKEN TRACEABILITY

SYSTEM FOR FOOD SUPPLY CHAIN MANAGEMENT

AQIL IMAN BIN BAHARIN

012021091348

BACHELOR IN COMPUTER SCIENCE (HONS)

MANAGEMENT & SCIENCE UNIVERSITY

For office use only (leave this blank)

Approved Rejected

Approved with changes

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Date:
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Contents

CHAPTER 1 : INTRODUCTION ........................................................ 3

1.1 Project Background .................................................................................. 3

1.2 Problem Statement.................................................................................... 4

1.3 Aim and Objectives of the Project ........................................................... 5

1.4 Definition of Terms .................................................................................... 6

1.5 Significance of the Project ....................................................................... 7

1.6 Scope of the Project.................................................................................. 8

1.7 Assumptions and Limitations .................................................................. 9

CHAPTER 2 : LITERATURE REVIEW ............................................ 10

2.1 Introduction ............................................................................................. 10

2.1.1 Understanding the Fundamentals of Blockchain Technology ................... 11

2.1.2 Exploring Halal Certification Standards in the Food Industry .................... 12
2.1.3 Digital Tokens and their Role in Financial Transactions.............................. 14
2.1.4 Importance of Traceability in Ensuring Product Safety and Quality ......... 15
2.1.5 Key Components of Efficient Food Supply Chain Management ................ 17
2.2 Review of Current Situation ................................................................... 19

2.2.1 Lack of Product Information ................................................................................ 19

2.2.2 Authenticity of Halal Products............................................................................. 19
2.2.3 Maintaining Halal Product Integrity .................................................................... 20
2.3 Review of Previous Work/Studies.......................................................... 21

2.4 Review and Comparisons of Related System ....................................... 25

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2.4.1 SmartHalal ................................................................................................................. 25

2.4.2 TRADE ........................................................................................................................ 27
2.4.3 Food Quality Traceability Prototype for Restaurants using Blockchain
and Food Quality Data Index.......................................................................................... 28
2.4.4 Blockchain-based Framework for Supply Chain Traceability in the Textile
and Clothing Industry ...................................................................................................... 29
2.4.5 Comparison of Related System........................................................................... 30
2.5 Summary .................................................................................................. 32

REFERENCES ................................................................................ 35
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CHAPTER 1 : INTRODUCTION

1.1 Project Background

Halal food is an essential aspect of the Islamic faith, and its consumption is growing

worldwide (Iner & Baghdadi, 2021). However, ensuring food products' authenticity and

halal compliance can be challenging, particularly in the context of complex and fragmented

food supply chains (Kadir et al., 2016). According to Zhao et al. (2019), blockchain

technology has emerged as a promising solution for enhancing food supply chains'

transparency, traceability, and security. It has been increasingly applied in the food

industry.

This project proposes a blockchain-based halal digital token traceability system

(HTC) for food supply chain management. The proposed system aims to improve halal

compliance with food products (Bansal et al., 2022), which can be done by enabling end-

to-end traceability of ingredients and products across the supply chain. The system will

leverage blockchain technology to create a decentralized and immutable record of all

transactions and activities related to halal food product production, processing, and

distribution (Chandra et al., 2019). The HTC system will use digital tokens to represent

halal compliance certificates and other relevant product information. These tokens will be

tracked and verified at each supply chain stage, offering real-time visibility of halal

compliance. The system provides a secure and transparent record of halal compliance,

aiding consumers in informed food choices, ensuring regulatory compliance, and reducing

the risk of fraud and adulteration in the food supply chain.

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1.2 Problem Statement

• Halal Product Information: Lack of product information about the origin and

manufacturing process of Halal products in the food industry (Haleem et al., 2018).

This can make it difficult for consumers to make informed choices about the food

they consume and for regulators to ensure compliance with halal standards.

• Authenticity of Halal Product: The difficulty in determining the authenticity of

halal food products and the risk of fraudulent products entering the market (Ng et

al., 2021). This can erode consumer trust in the halal certification system.

• Halal Product Integrity: The challenge of ensuring that halal products are

produced and distributed with full integrity and compliance to halal standards (Tan

et al., 2020).
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1.3 Aim and Objectives of the Project

Aim:

The project aims is to design and implement a blockchain-based halal digital token

traceability system that enhances the transparency and traceability of halal food products

across the supply chain, ensuring compliance with halal standards, reducing the risk of

fraud and adulteration and building consumer trust in the halal certification system.

Objectives:

• To enable the transparency of halal information using blockchain. This will involve

researching existing blockchain-based solutions in the food industry and analyzing

their effectiveness in providing transparency.

• To authenticate halal compliance visibility and user interface through a digital token

in real time. This will require developing a smart contract on the blockchain that

can store and update the compliance status of each product and designing a user

interface for consumers and regulators to access this information.

• To evaluate the functionality and security of the blockchain-based digital token and

its ability to reduce the risk of fraud and adulteration in the food supply chain. This

will involve testing the system in a real-world environment and analyzing its

performance in terms of transparency, security, and effectiveness in building trust

in the halal certification system.

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1.4 Definition of Terms

Term Definition
Adulteration The addition of inferior or harmful substances to a product, often for
the purpose of reducing costs or increasing profits.

Blockchain A decentralized, distributed ledger technology that enables secure,

Technology transparent, and tamper-proof record-keeping and transactions.

Decentralized A system or network that is not controlled by a single entity or

authority, but instead distributed among multiple nodes or
participants.
Digital token A digital representation of a physical or digital asset that is stored
and managed on a blockchain network.

Food Supply The network of organizations and processes involved in the

Chain production, processing, distribution, and consumption of food
products.
Halal Adherence to Islamic dietary laws in the preparation and
Compliance consumption of food products.

Halal Documents or records that attest to the halal compliance of a food

Compliance product or ingredient.
Certificates
Halal food Food that is prepared and consumed according to Islamic dietary
laws.

HTC Halal Token Chain which is an acronym for the proposed blockchain-
based halal digital token traceability system for food supply chain
management.
Immutable A record or data that cannot be altered, deleted, or tampered with
Record once it has been recorded.

Regulatory Adherence to laws, regulations, and standards set by governing

compliance bodies or authorities.

Transparency The quality of being open, honest, and easily understood.

Traceability The ability to track and verify the history, location, and movement of
products through the supply chain.
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1.5 Significance of the Project

As the demand for halal food continues to grow worldwide, ensuring the

authenticity and halal compliance of food products is becoming increasingly challenging

(Randeree, 2019). The proposed project on blockchain-based verification and tracking of

halal compliance in the food industry has significant contributions to the field.

Firstly, it addresses the research gap of the lack of transparency and trust in the

halal certification system by developing a new approach using blockchain technology. This

approach provides real-time visibility and verifiability of the halal compliance status of food

products, which can increase consumer confidence and trust in the halal certification

system.

Moreover, the project has practical implications for the food industry by reducing

the risk of fraud and adulteration in the food supply chain (Tsoukas et al., 2022), thereby

improving accuracy and reducing costs associated with regulatory compliance. The

project's impact extends beyond the field, as it can benefit society by improving public

health and safety and promoting ethical practices in the food industry.

Finally, the innovative use of blockchain technology also opens up possibilities for

future research in the area of supply chain transparency and verifiability (Kayikci et al.,

2020), potentially inspiring others to explore related topics in the field and apply the

blockchain-based solution to other domains beyond the food industry.

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1.6 Scope of the Project

This project's scope is to develop a blockchain-based halal digital token traceability

system that enhances the transparency and traceability of halal food products across the

entire supply chain. The system will enable real-time tracking of halal compliance status

and product information from farm to fork. The technical consideration is implementing an

existing mobile application feature (such as a QR code scanner) for end-users to access

product information quickly. The primary users of the system will be consumers, halal

certification bodies, regulators, and food producers. Consumers will have access to

transparent and reliable information about the halal compliance status of food products.

Halal certification bodies, the Department of Islamic Development Malaysia (JAKIM) and

regulators will monitor compliance with halal standards and identify potential fraud or

adulteration.

The project will be subject to several constraints, including budget constraints of

RM700, time constraints of 12 months, and resource constraints of limited access to

specialized equipment and only one developer. The project's geographical scope will

focus on Malaysia's halal food industry. The expected outcomes of the project include

enhancing transparency and traceability of halal food products across the supply chain,

increasing consumer confidence in the halal certification system, reducing the risk of fraud

and adulteration in the halal food industry, enabling halal certification bodies and

regulators to monitor compliance with halal standards, and improving the brand reputation

and competitiveness of halal food producers.

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1.7 Assumptions and Limitations

Assumptions:

• Implementing the blockchain-based halal digital token traceability system will be

feasible and effective in ensuring halal compliance and reducing fraud and

adulteration in the food supply chain.

• The target users of the system will have access to the necessary technology and

infrastructure to interact with the system, such as smartphones or computers with

internet connectivity.

• Assumption that the users will have basic knowledge of blockchain technology and

its applications.

Limitations:

• The project budget and timeline are limited, and any delays or changes may impact

on the delivery of the project.

• The system may not address all issues related to halal compliance and food supply

chain management and may require additional measures or complementary

systems to address all concerns fully.

• The accuracy and completeness of the information recorded on the blockchain

may depend on the reliability and honesty of the parties involved in the supply

chain.

• The development and implementation of the system may face technical challenges

or limitations, such as scalability, security, or interoperability with existing systems.

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CHAPTER 2 : LITERATURE REVIEW

2.1 Introduction

The blockchain, initially conceptualized by Satoshi Nakamoto, emerged as a

solution to tackle the issue of double spending in electronic transactions. Nakamoto's

groundbreaking work laid the foundation for a decentralized and transparent ledger

system. Schmidt and Wagner (2019) emphasize that blockchain technology reduces

transaction costs by enabling transparent and valid transactions. Furthermore, blockchain

operates on a distributed, robust, secure, and immutable record framework, which

Khurshid (2020) argues has the potential to revolutionize trust, value sharing, and

transaction processes. The advent of blockchain technology gave rise to Bitcoin, a

decentralized digital currency that operates on a peer-to-peer network, eliminating the

need for intermediaries. As highlighted by Rejeb, Keogh, and Treiblmaier (2019),

blockchains possess distinct features, such as the ability to transfer ownership, implement

access control, and maintain comprehensive activity logs. These characteristics enable

the tracking of product and service movement across enterprises and borders, thereby

enhancing supply chain management.

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2.1.1 Understanding the Fundamentals of Blockchain Technology

Blockchain technology has emerged as a decentralized and distributed ledger

system that facilitates secure and transparent recording of transactions among multiple

participants or nodes. Operating through a chain of interconnected blocks, each containing

a list of transactions or data, blockchain networks offer key properties of immutability,

decentralization, and transparency, ensuring the integrity of data and providing a highly

secure platform for accessing information and conducting transactions (Shah et al., 2018).

Compared to traditional centralized systems, blockchain operates on a decentralized

network of computers or nodes. This architecture enables data distribution through a peer-

to-peer network, eliminating the need for intermediaries or central authorities (Esmat et

al., 2021). This decentralized structure not only enhances security but also makes

blockchain more resistant to single points of failure and censorship, ensuring its

robustness in various applications (Al-madani et al., 2020). The foundation of blockchain

technology lies in peer-to-peer network computing and cryptography. By leveraging

cryptographic algorithms, particularly public-key cryptography, blockchain ensures the

confidentiality, authenticity, and non-repudiation of transactions (Le et al., 2018). Public-

key cryptography guarantees secure and private data transfer within the network,

enhancing the overall trust and integrity of the system (Zhai et al., 2019).

Furthermore, consensus mechanisms play a vital role in determining the validity of

transactions and the addition of new blocks in the blockchain. Mechanisms like Proof of

Work (PoW), Proof of Stake (PoS), and Practical Byzantine Fault Tolerance (PBFT)

enable participants to reach an agreement, ensuring the accuracy and integrity of the

recorded information (Kamaruzaman et al., 2018). Smart contracts, a key feature of

blockchain technology, enable the automation, trust, and transparency of various tasks.

These digital protocols are programmable and execute predefined actions when specific
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conditions are met. Smart contracts eliminate the need for third-party intervention and

enable automatic payments, quality control, and the establishment of trust between

stakeholders, contributing to the efficiency and reliability of blockchain-based applications

(Kumar et al., 2019). The immutable and transparent nature of blockchain technology

significantly enhances tracking capabilities throughout supply chains, including processes

such as manufacturing, delivery, and payment. By providing increased transparency,

flexibility, and trust, blockchain utilization has been shown to improve the integrity and

reliability of recorded information, making it a valuable tool in supply chain management

(Meidutė-Kavaliauskienė et al., 2021).

2.1.2 Exploring Halal Certification Standards in the Food Industry

Halal, derived from an Arabic term meaning "permissible" or "lawful" according to

Islamic principles, holds significant importance in the context of food and beverages. It

signifies that products are prepared, processed, and produced in adherence to Islamic

dietary laws, encompassing religious, social, cultural, political, and economic aspects

(Masruroh, 2020). Islamic dietary guidelines distinguish between halal, permissible foods,

and haram, prohibited or forbidden foods. Initially, halal food was understood to be free

from alcohol and pork, but the concept of halal extends beyond specific ingredients to

encompass the methods of preparation, handling, and slaughter (Alzeer, Rieder, &

Hadeed, 2018; Bujang, Noor, & Abdullah, 2018).

Halal food preparation requires the use of ingredients permissible according to

Islamic dietary laws. A study by Putri (2021) reveals that in Islam, halal food refers to food

that is allowed to be done, used, or cultivated while being free from harmful or prohibited

substances. For instance, substances derived from haram animals, such as pork or

alcohol, are strictly prohibited in halal food (Al-Teinaz, 2020). Additionally, halal food
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should be free from other prohibited substances or additives. Meat and poultry must

adhere to specific halal slaughter methods, performed by a knowledgeable and mentally

sound Muslim who swiftly cuts the throat and major blood vessels of the animal while

reciting the name of Allah (Abdullah, Borilova, & Steinhauserova, 2019; Abd El-Rahim,

2020).

To maintain the integrity of halal food, measures must be taken to prevent cross-

contamination with non-halal substances during processing, storage, and transportation

(Supian, 2018). This involves implementing separate equipment, utensils, and storage

facilities for halal and non-halal products. Halal certification, issued by recognized Islamic

authorities or certification bodies, plays a crucial role in ensuring compliance with halal

requirements (Al-Teinaz & Al-Mazeedi, 2020). Certification processes often include

inspections, audits, and ongoing monitoring to uphold compliance standards (Sulaiman et

al., 2018). Nowadays, halal certification is a necessity for producers to differentiate their

products in the market (Asa et al., 2018). It is worth noting that the scope of halal extends

beyond food and beverages to encompass personal care products, cosmetics,

pharmaceuticals, and other aspects of life (Azam & Abdullah, 2020). Thus, halal principles

aim to promote ethical consumption, cleanliness, and adherence to Islamic teachings

among Muslims.
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2.1.3 Digital Tokens and their Role in Financial Transactions

Digital tokens, also referred to as digital assets or digital currencies, are electronic

or digital units of value that can be owned, stored, or exchanged. These tokens leverage

blockchain or distributed ledger technology for their creation, recording, and transfer

(Goodell, 2022). They serve as representations of value and encompass various types of

assets, including cryptocurrencies, utility tokens, security tokens, or virtual assets within

specific ecosystems (Benedetti, Caceres, & Abarzúa, 2023). Blockchain networks play a

pivotal role in the establishment of digital tokens, capitalizing on the decentralized and

transparent nature of the technology. By utilizing blockchain, these tokens are securely

recorded, allowing for verifiable transactions without the need for intermediaries (Chen &

Bellavitis, 2020). Utility tokens, a specific category of digital tokens, grant access to

particular products or services within blockchain-based platforms or ecosystems (Drasch

et al., 2020). These tokens facilitate interactions and transactions within the platform,

enabling features access, service payments, and participation in governance mechanisms.

Cryptocurrencies, such as Bitcoin and Ethereum, are notable examples of digital tokens

that can function as mediums of exchange, stores of value, or units of account (Gurguc &

Knottenbelt, 2018). Operating independently of traditional banking systems,

cryptocurrencies often embody decentralization and cryptographic principles.

Security tokens, on the other hand, represent ownership or investment in specific

assets or entities (Gupta et al., 2020). These tokens adhere to securities regulations and

offer rights to dividends, profit sharing, voting rights, or other financial benefits. Security

tokens aim to digitize traditional financial instruments, including equities, bonds, or real

estate, presenting enhanced liquidity and accessibility. Tokenization encompasses the

process of transforming real-world assets or rights into digital tokens (Garcia-Teruel &

Simón-Moreno, 2021). By tokenizing physical or intangible assets, such as intellectual

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property or loyalty points, these assets can be divided into smaller units and traded on

blockchain platforms. Interoperability among different tokens and platforms is facilitated

by token standards like the ERC-20 standard on the Ethereum blockchain, enabling

seamless integration and exchange across multiple blockchain networks (Wang & Nixon,

2021). This fosters a cohesive ecosystem for the interaction of tokens. The integration of

smart contracts further enhances the capabilities of digital tokens. Smart contracts are

self-executing agreements written in code, automatically executing predefined conditions

or actions when specific criteria are met (Wöhrer & Zdun, 2020). By interacting with smart

contracts, digital tokens enable programmable and automated transactions based on

predetermined rules. This empowers efficient and secure execution of transactions within

blockchain networks.

2.1.4 Importance of Traceability in Ensuring Product Safety and Quality

Traceability, which involves tracking and tracing the history, location, and journey

of a product within a supply chain, plays a critical role in ensuring transparency and

visibility (Roy, 2021). It entails the documentation and recording of relevant information

related to the production, processing, handling, and distribution of a product (Liu et al.,

2020). Unique identifiers or codes, such as serial numbers, barcodes, QR codes, or RFID

tags, are assigned to products at different stages of the supply chain to facilitate

traceability (Agrawal et al., 2021). These identifiers are associated with essential details,

including the origin, quality, quantity, and characteristics of the product (Olsen & Borit,

2018).
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Throughout the supply chain, the movement of products is recorded and tracked,

capturing data on locations, dates, and parties involved in each transfer or transaction

(Dujak & Sajter, 2019). Tracking mechanisms range from manual record-keeping to

automated systems utilizing technologies like IoT sensors or blockchain (Li et al., 2020).

The primary objective of traceability is to provide stakeholders, such as manufacturers,

suppliers, retailers, and consumers, with access to reliable information about the product's

origins, processing methods, and handling conditions (Roy, 2021). This information is

crucial for recall and risk management purposes, enabling swift identification and isolation

of affected products in cases of quality issues or safety concerns (Stranieri et al., 2018).

Traceability systems often align with industry standards, regulations, or

certifications that require specific documentation and tracking practices (Katsikouli et al.,

2021). Compliance with these traceability requirements ensures product authenticity,

quality control, and regulatory compliance (George et al., 2019). Moreover, traceability

systems generate valuable data and insights that can be leveraged to optimize supply

chain processes (El Maouchi et al., 2018). Analyzing the collected information allows

businesses to identify bottlenecks, inefficiencies, or areas for improvement in their supply

chain operations, ultimately leading to enhanced productivity, reduced costs, and

increased customer satisfaction. Traceability serves as a critical enabler for maintaining

consumer trust, managing risks, and driving supply chain efficiency and effectiveness.
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2.1.5 Key Components of Efficient Food Supply Chain Management

Food supply chain management involves the coordination, control, and

optimization of activities throughout the entire journey of food products, from production

to consumption (Bhattacharya & Fayezi, 2021). It requires collaboration among various

stakeholders to ensure a smooth flow of products and minimize disruptions. Planning and

forecasting are essential components of food supply chain management, enabling the

anticipation and fulfillment of consumer demand (Seyedan & Mafakheri, 2020). This

involves analyzing market trends, monitoring inventory levels, and coordinating production

schedules to minimize waste and excess inventory. The sourcing of raw materials and

ingredients from suppliers is another important aspect of food supply chain management

(Fox et al., 2018). It includes evaluating suppliers, negotiating contracts, and maintaining

relationships to secure a reliable and sustainable supply of inputs. Quality and safety

assurance are paramount in food supply chain management (George et al., 2019).

Implementing food safety standards, conducting inspections, and implementing proper

handling and storage practices are necessary to prevent contamination, spoilage, or

adulteration.

Efficient inventory management and warehouse operations are crucial for

optimizing storage capacity and ensuring timely order fulfillment (Jaigirdar et al., 2023).

This involves inventory tracking, stock rotation, and maintaining appropriate temperature

and handling protocols. Transportation and logistics are key considerations in food supply

chain management to maintain product integrity and freshness (Tien, Anh, & Thuc, 2019).

Selecting suitable transportation modes, monitoring conditions during shipping, and

ensuring timely delivery are essential in this process. Traceability plays a vital role in food

supply chain management, enabling the tracking and tracing of food products from farm

to fork (Moysiadis et al., 2022). It involves capturing and recording information about the
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origin, processing, and handling of food products to ensure transparency, quality control,

and compliance with regulations. Increasingly, sustainability, ethical sourcing, and social

responsibility are integrated into food supply chain management practices (Marshall et al.,

2019). This includes adopting environmentally friendly practices, minimizing food waste,

supporting fair trade initiatives, and promoting ethical treatment of workers and animals

throughout the supply chain.

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2.2 Review of Current Situation

2.2.1 Lack of Product Information

The halal food industry faces a significant issue with the lack of comprehensive

product information (Hader et al., 2022). This means that consumers and regulators do

not have access to detailed and accurate information about the origin and manufacturing

process of halal products. The absence of transparency makes it challenging for

consumers to make informed choices about the food they consume and for regulatory

bodies to ensure compliance with halal standards (Sayogo, 2018). Without clear

information, consumers may feel uncertain about the halal status of the products they

purchase, leading to a loss of trust in the halal certification system. Addressing this issue

requires establishing mechanisms that provide transparent and accessible product

information, enabling consumers to make informed decisions and regulators to enforce

halal compliance effectively.

2.2.2 Authenticity of Halal Products

Ensuring the authenticity of halal food products is a significant challenge in the

halal food industry (Rejeb et al., 2021). There is a risk of fraudulent products entering the

market, where non-halal or incorrectly labeled products are sold as halal. This poses a

serious threat to consumer trust and confidence in the halal certification system. The

current processes for verifying the authenticity of halal products are inadequate and lack

effectiveness, failing to provide sufficient assurance to consumers and regulatory bodies

(Brooks et al., 2021). To address this challenge, there is a need for robust measures and

systems that can accurately verify the authenticity of halal products throughout the supply

chain. This can help establish trust among consumers and strengthen the integrity of the

halal certification system.

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2.2.3 Maintaining Halal Product Integrity

The production and distribution of halal products with full integrity and compliance

to halal standards present significant challenges (Ab Rashid & Bojei, 2020). The complex

and fragmented nature of the food supply chain makes it difficult to ensure that every stage

of production, processing, and distribution adheres to halal requirements (Rejeb, 2018).

Without robust traceability mechanisms and transparent documentation, there is a risk of

non-compliance or unintentional contamination, compromising the integrity of halal

products. To overcome this challenge, it is essential to establish effective traceability

systems that track the journey of halal products from farm to fork. This can help ensure

that each step in the supply chain follows halal standards and enable quick identification

and resolution of any non-compliance issues. By enhancing traceability and implementing

comprehensive quality control measures, the halal food industry can maintain the integrity

of its products and meet the expectations of consumers and regulatory bodies.
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2.3 Review of Previous Work/Studies

Numerous studies have investigated various aspects of blockchain technology,

halal certification standards, digital tokens, traceability, and food supply chain

management within the context of developing a blockchain-based halal digital token

traceability system for food supply chain management.

1. In the area of blockchain technology, Schmidt and Wagner (2019) have highlighted

its potential in reducing transaction costs and enabling transparent transactions in

the context of food supply chain management. Khurshid (2020) argues that

blockchain has the capacity to revolutionize trust, value sharing, and transaction

processes specifically in the halal food industry. Rejeb, Keogh, and Treiblmaier

(2019) have emphasized the distinct features of blockchain, such as transfer of

ownership and comprehensive activity logs, which enhance supply chain

management and can be leveraged for traceability in halal food supply chains.

However, there is a need for additional research on the practical implementation

and scalability of blockchain solutions in the development of a halal digital token

traceability system.

2. Regarding halal certification standards, Masruroh (2020) explores the significance

of halal principles in the context of food and beverages, specifically focusing on

their relevance to a blockchain-based halal digital token traceability system. Asa,

Rokshana Shirin, and Azmi (2018) discuss the concept of halal food certification

in Malaysia and associated issues and concerns, providing insights into the

challenges that need to be addressed in the development of a traceability system.

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Bujang, Noor, and Abdullah (2018) examine the "toyyib" aspect of halal food

production in meat and meat products, highlighting the importance of quality

assurance and integrity throughout the supply chain. However, there is a scarcity

of studies examining the challenges faced by halal certification bodies specifically

in implementing a blockchain-based traceability system, the consistency of

certification practices across different regions, and the potential impact of

emerging technologies like blockchain on halal certification processes and

standards.

3. Digital tokens have been the subject of extensive research, with Benedetti,

Caceres, and Abarzúa (2023) discussing the different types of digital tokens,

including cryptocurrencies, utility tokens, and security tokens, and their relevance

to financial transactions within a blockchain-based halal digital token traceability

system. Chen and Bellavitis (2020) highlight the disruptive potential of blockchain

and decentralized finance in the context of halal food supply chains, emphasizing

the role of digital tokens in enabling transparent and efficient transactions. Gupta

et al. (2020) explores the tokenization of real estate using blockchain technology,

providing insights into the potential application of digital tokens in asset traceability

within the halal food supply chain. However, more research is needed to

understand the regulatory frameworks and legal implications surrounding digital

tokens specifically in the context of halal certification and their potential impact on

traditional financial systems and market dynamics within a blockchain-based

traceability system.
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4. Traceability in supply chains has been recognized as a critical aspect of ensuring

product safety and quality, particularly within the context of developing a

blockchain-based halal digital token traceability system. Roy (2021) emphasizes

the importance of traceability in maintaining transparency and visibility in the halal

food supply chain, underscoring its relevance to the development of a traceability

system. Liu et al. (2020) discuss the components of a traceability system and its

benefits, providing insights into the key features and functionalities that need to be

considered in the design and implementation of a blockchain-based traceability

system. Katsikouli et al. (2021) examine the benefits and challenges of blockchains

in managing food supply chains, specifically focusing on their potential

contributions to traceability and transparency in the context of halal food. However,

there is a need for further research on the integration of traceability systems across

different stakeholders, the standardization of traceability practices, and the

development of interoperable traceability solutions specifically within a blockchain-

based halal digital token traceability system.

5. Food supply chain management has been extensively studied in the context of

developing a blockchain-based halal digital token traceability system.

Bhattacharya and Fayezi (2021) discuss the importance of multi-stakeholder

collaboration in achieving efficiency and transparency within the halal food supply

chain, highlighting its relevance to the development of a traceability system.

George et al. (2019) explores the role of blockchain in food quality traceability,

providing insights into how blockchain technology can enhance product integrity

and authenticity within the halal food supply chain. Jaigirdar et al. (2023) examine

multi-objective distribution planning in perishable goods supply chains, specifically

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focusing on its applicability to the efficient management of halal food products.

However, there is a lack of comprehensive studies that compare and evaluate

different food supply chain management practices, technologies, and strategies

within the context of a blockchain-based halal digital token traceability system, and

their impact on efficiency, cost reduction, and customer satisfaction.

Therefore, this project aims to address these gaps by developing a blockchain-

based halal digital token traceability system for food supply chain management, which

includes the development of a website and a QR code integrated halal logo. The review

of previous work and studies provides valuable insights into the current state of research

and practice in blockchain technology, halal certification, digital tokens, traceability, and

food supply chain management within the specific context of developing a traceability

system for halal food products.

In the next section, a review and comparison of related systems will be conducted,

providing insights into the current state of research and practice in these areas.
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2.4 Review and Comparisons of Related System

This section presents a review and comparison of several related systems that aim

to enhance transparency and facilitate information access in different industries. These

systems utilize innovative technologies to address specific challenges and improve

processes within their respective domains. While not all of these systems explicitly

incorporate blockchain technology, they share a common goal of leveraging advanced

solutions to enhance efficiency and trust in their operations.

2.4.1 SmartHalal

The SmartHalal system, introduced by the Department of Islamic Development

Malaysia (JAKIM), utilizes QR codes to enhance the verification and authentication of halal

products (Badra, 2021; "Kod QR Smarthalal Mudahkan carian status halal," 2021). This

innovative system offers several benefits and features that aim to improve transparency,

accessibility, and trust in the halal industry. One of the key advantages of the SmartHalal

system is its convenience and accessibility. Consumers can easily retrieve detailed

information about a product's halal certification status by scanning the QR code using their

smartphones. This user-friendly approach simplifies the verification process and

empowers consumers to make informed choices.

Transparency and trust are vital aspects addressed by SmartHalal. By providing

comprehensive information through QR code scanning, consumers can have confidence

in the halal certification process and trust that the products they purchase comply with

halal standards. This transparency fosters consumer satisfaction and loyalty. The

SmartHalal system also streamlines the halal certification verification process. Consumers

no longer need to manually search for halal certification information, as the QR code
 26

instantly provides access to certification details. This saves time and effort while reducing

potential confusion or uncertainty about a product's halal status.

Furthermore, the implementation of SmartHalal demonstrates JAKIM's

commitment to enhancing halal industry standards in Malaysia. By leveraging QR codes

and technology, the system offers a modern and efficient approach to halal certification

verification. This showcases the adoption of innovative solutions to meet consumer needs

and promote the integrity of the halal market. The potential impact of the SmartHalal

system is significant. It provides consumers with greater transparency and trust in the

products they purchase, contributing to their confidence in the halal industry. For

businesses, the system can enhance brand reputation and differentiation, as consumers

are more likely to choose products with easily accessible halal certification information.

Additionally, the system may encourage more businesses to seek halal certification,

further strengthening the halal industry as a whole.

 27

2.4.2 TRADE

The TRADE system, as presented by El Maouchi, Ersoy, and Erkin (2018), is a

blockchain-based platform designed to facilitate secure and efficient trade transactions.

By leveraging blockchain technology, the system offers several advantages in enhancing

trade processes and improving transparency. The TRADE system utilizes blockchain

technology to ensure secure and transparent trade transactions. With its distributed ledger,

the system securely stores transaction records in a tamper-proof manner. This

immutability of the blockchain enhances trust and provides a reliable record of trade

activities.

Security and trust are significantly enhanced in the TRADE system. The decentralized

nature of the blockchain eliminates the need for intermediaries, reducing the risk of fraud

or manipulation. The use of cryptographic algorithms ensures the confidentiality and

integrity of trade data, adding an extra layer of security. Smart contracts play a crucial role

in the TRADE system. These self-executing agreements automate trade processes,

executing predefined actions once specific conditions are met. By reducing manual

intervention, smart contracts streamline trade operations and enhance efficiency.

The TRADE system provides traceability and transparency in trade transactions.

Each transaction recorded on the blockchain is visible to authorized participants, ensuring

transparency in the trade process. The immutability of the blockchain ensures the integrity

of transaction history, facilitating traceability and auditability. The implementation of the

TRADE system has the potential to significantly impact trade efficiency. Through process

automation, reduced paperwork, and minimized reliance on intermediaries, the system

can streamline trade operations, reduce transaction costs, and enhance overall efficiency.

Furthermore, the increased transparency and traceability provided by the system can

contribute to improved supply chain management and risk mitigation.

 28

2.4.3 Food Quality Traceability Prototype for Restaurants using Blockchain and

Food Quality Data Index

George, Harsh, Ray, and Babu (2019) present a prototype system that utilizes

blockchain technology and a Food Quality Index (FQI) to enhance food quality traceability

in restaurants. By leveraging blockchain technology, the system aims to address

challenges related to food quality and transparency in the restaurant industry. The system

employs blockchain technology to enhance the traceability of food quality in restaurants.

With its decentralized and immutable nature, the blockchain ensures transparent and

secure recording of food quality data. This enables reliable tracking of food items from

their sources to the restaurant, providing increased visibility into quality-related information.

A key component of the system is the Food Quality Index (FQI), which serves as

a standardized measurement for assessing the quality of food items. The FQI captures

various quality attributes such as freshness, hygiene, and nutritional value. By assigning

a quantifiable index to each food item, the system enables objective evaluation and

comparison of food quality across different restaurants. The integration of blockchain

technology enables traceability and transparency in the food supply chain. Relevant data,

including the source of ingredients, storage conditions, and handling practices, is recorded

and timestamped on the blockchain. Authorized parties, including consumers, can access

this information to verify the authenticity and quality of food items served in restaurants.

The system offers the potential to improve consumer confidence in the quality and

safety of food served in restaurants. By providing transparent access to food quality data,

consumers can make more informed decisions about their food choices. The ability to

verify the quality attributes of food items helps build trust between restaurants and their

customers. Furthermore, the system has the potential to drive quality improvement in

restaurants. By utilizing the FQI, restaurants can track and compare their food quality
 29

performance over time. This data-driven approach enables the identification of areas for

improvement and supports decision-making to enhance overall food quality standards.

2.4.4 Blockchain-based Framework for Supply Chain Traceability in the Textile and

Clothing Industry

Agrawal, Kumar, Pal, Wang, and Chen (2021) propose a blockchain-based

framework to enhance supply chain traceability in the textile and clothing industry. The

framework addresses the need for improved transparency, efficiency, and trust in the

industry's supply chain processes. The framework leverages blockchain technology to

improve traceability in the textile and clothing supply chain. By utilizing blockchain's

decentralized and immutable nature, the framework provides a transparent and secure

platform for recording and tracking the movement of textile and clothing products. This

helps combat issues such as counterfeiting, product provenance, and supply chain

inefficiencies.

Smart contracts play a vital role in the framework, enabling automated and

enforceable business rules within the supply chain. They facilitate tasks such as product

authentication, quality inspections, and payment settlements, streamlining processes and

reducing manual interventions. Data encryption is also emphasized to ensure the

confidentiality and integrity of sensitive supply chain information. Implementing the

blockchain-based framework brings enhanced transparency and trust to the textile and

clothing industry. Real-time access to information about product origins, manufacturing

processes, and distribution channels fosters transparency, empowering consumers to

make informed purchasing decisions. It also acts as a deterrent to unethical practices and

promotes responsible sourcing.

 30

By automating tasks, reducing paperwork, and providing real-time visibility into

product movements, the framework improves supply chain efficiency. Inventory

management becomes optimized, delays are minimized, and overall coordination within

the supply chain is enhanced. Collaboration and data sharing are crucial elements

emphasized in the research paper. The blockchain-based framework enables secure data

sharing among supply chain stakeholders while respecting data privacy and ownership

rights. This facilitates better collaboration, information exchange, and coordination

between different entities in the textile and clothing supply chain.

2.4.5 Comparison of Related System

Below are some comparisons, summarizing the key features and characteristics of the

related systems regarding traceability systems for different industries.

Table 1: Comparison of Related Systems

System Key Features Technology Industry Objectives Commercial

Used Focus Availability

SmartHalal QR code-based QR codes Food Enhance Yes

system industry verification of
halal
products,
Facilitates increase
search for halal transparency,
certification and build
status consumer
trust

TRADE Blockchain- Blockchain, Trade Improve trade No

based platform smart industry transparency,
contracts enhance
security and
Facilitates trust,
secure and streamline
efficient trade trade
transactions processes
 31

Utilizes smart
contracts for
automation

Food Quality Blockchain- Blockchain Restaurant Enhance food No

Traceability based system industry quality
Prototype for traceability,
Restaurants improve
using Utilizes Food consumer
Blockchain Quality Index confidence,
and Food (FQI) support
Quality Data quality
Index for standardized improvement
quality in restaurants
assessment

Blockchain- Blockchain- Blockchain, Textile and Enhance No

based based smart clothing textile and
Framework framework contracts industry clothing
for Supply supply chain
Chain traceability,
Traceability Utilizes smart increase
in the Textile contracts for transparency
and Clothing automation and trust,
Industry improve
supply chain
efficiency

Based on the table above, each system utilizes innovative technologies to address

specific challenges within their respective industries. While SmartHalal is commercially

available and focuses on halal certification verification, the other systems are still in the

research or prototype stage. However, some systems share objectives of enhancing

traceability, transparency, and trust in their respective industries using blockchain

technology and smart contracts.

 32

2.5 Summary

The literature review provides insights into blockchain technology, halal

certification, digital tokens, traceability, and food supply chain management. It highlights

the potential of blockchain in improving transparency and traceability in supply chains. The

review explores the fundamentals of blockchain and its applications in various industries,

including the importance of halal certification and the role of digital tokens in financial

transactions. It emphasizes the significance of traceability in ensuring product safety and

quality. Related systems such as SmartHalal, TRADE, Food Quality Traceability Prototype

for Restaurants using Blockchain and Food Quality Data Index, and Blockchain-based

Framework for Supply Chain Traceability in the Textile and Clothing Industry are examined.

The review concludes that while some systems share objectives of enhancing traceability,

transparency, and trust using blockchain technology and smart contracts, further research

is needed. The findings provide a foundation for developing a blockchain-based halal

digital token traceability system for food supply chain management.

 33

CHAPTER 3 : RESEARCH DESIGN AND METHODOLOGY

3.1 Research Methodology

• Data Gathering Method and Analysis

- Document Analysis

- Data Analysis

3.2 Development Methodology

Agile (kenapa agile sesuai dengan project ni)

- Phases (lifecycle)

• Flowchart (project flowchart)

• System Architecture (contoh)

https://www.interviewbit.com/blog/system-architecture/
 34

• System Design (contoh: process)

• UML Diagram

Use Case Diagram

(tambah macam admin)

(user: macam halalcertificationbodie, suppliers, consumer)

3.3 Project Schedule

• Key Milestones

• Gantt Chart
 35

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