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To cite this document: Marco Tieman, Jack G.A.J. van der Vorst, Maznah Che Ghazali, (2012),"Principles in halal supply chain
management", Journal of Islamic Marketing, Vol. 3 Iss: 3 pp. 217 - 243
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Halal
Principles in halal supply chain supply chain
management management
Marco Tieman
Faculty of Business Management, Universiti Tecknology MARA, 217
Shah Alam, Malaysia
Jack G.A.J. van der Vorst Received 21 October 2011
Revised 2 June 2012
Logistics, Decision and Information Sciences, Wageningen University, Accepted 3 June 2012
Wageningen, The Netherlands, and
Maznah Che Ghazali
Faculty of Business Management, Universiti Tecknology MARA,
Shah Alam, Malaysia
Abstract
Purpose – The purpose of this paper is to introduce a new framework to optimise the design of halal
food supply chains, called the “Halal Supply Chain Model”. In this research the main logistics business
processes are defined, which are the determinants for the halal supply chain performance.
Design/methodology/approach – Next to an extensive literature review, a large discussion group
and various focus group sessions conducted in Malaysia, The Netherlands and China have been used
to identify halal control activities and assurance activities in logistics business processes, with a focus
on transportation, warehousing and terminal operations.
Findings – The findings show that product characteristics (bulk versus unitised, ambient versus cool
chain) and market requirements (Muslim or non-Muslim country) determine the supply chain
vulnerability to halal contamination, for which halal control activities and assurance activities are put
in place to reduce supply chain vulnerability. More empirical research is needed to further refine the
Halal Supply Chain Model for different product –market combinations. Second, qualitative research is
recommended for halal cosmetics and pharmaceutical supply chains.
Practical implications – This study shows that halal supply chain management is different from
conventional supply chain management, which requires a halal policy and specific design parameters
for supply chain objectives, logistics control, supply chain network structure, supply chain business
processes, supply chain resources and supply chain performance metrics.
Originality/value – The Halal Supply Chain Model can be an important instrument to design and
manage halal food supply chains in extending halal integrity from source to point of consumer
purchase. As there is an evident lack of academic research in the field of halal supply chain
management, it provides an important reference for halal logistics and supply chain management. The
large discussion group and focus group sessions resulted in the publication of the International Halal
Logistics Standard (IHIAS 0100:2010) by IHI Alliance in 2010.
Keywords Halal supply chain model, Halal supply chain management, Halal logistics,
Supply chain management, Halal management system, Halal performance, Halal,
Distribution management, Malaysia, The Netherlands, China
Paper type Research paper
Journal of Islamic Marketing
Vol. 3 No. 3, 2012
The authors would like to acknowledge the contribution of IHI Alliance in facilitating the large pp. 217-243
q Emerald Group Publishing Limited
discussion group and focus group sessions. IHI Alliance and the participants have contributed 1759-0833
significantly to this paper. DOI 10.1108/17590831211259727
JIMA 1. Introduction
3,3 A significant paradigm shift of modern marketing is that companies move away from a
consumer-centric to a value-driven approach, which lifts the concept of marketing into the
arena of human aspiration, values, and spirits (Kotler et al., 2010). Halal (permissible,
lawful) is clearly based on values, namely Islamic values (Zakaria and Abdul-Talib, 2010).
As argued by Lada et al. (2009), Alserhan (2010b), Ibrahim and Mokhtarudin (2010), Wilson
218 and Liu (2010) and Tieman (2011), halal needs a supply chain approach, where the value
chain and its supply chain should be fully aligned (Christopher, 1998; van Amstel and van
Goor, 2001; van Assen et al., 2010) to fulfil the promise of halal to the end-consumer: that the
food they consume is a true manifestation of Islamic principles (World Halal Forum, 2009).
The integrity of halal food supply chains is becoming an increasing concern (Zailani et al.,
2010; Lam and Alhashmi, 2008). There are a number of reasons why the halal industry is
increasingly occupied with the integrity of halal food chains. First, halal integrity issues are
more likely to occur than before, because of increasing complexity of supply chains (Lam
and Alhashmi, 2008) and focus on cost reduction in the logistics industry (Wilson and Liu,
2010). Second, the complexity of today’s supply chain is making integrity issues harder to
detect (Zakaria, 2008; Shafie and Othman, 2004; Talib et al., 2008; Abdul et al., 2009). Third,
the consequences of halal integrity issues in the supply chain have arguably become more
costly than before for brand owners and retail chains to repair (Waarden and van Dalen,
2010; Zakaria and Abdul-Talib, 2010; New Straits Times, 2005).
Halal food supply chains are vulnerable due to their credence quality attributes (Bonne
and Verbeke, 2008), importance of maintaining halal integrity throughout the supply chain
(Tieman, 2011; Bahrudin et al., 2011), essence of avoiding doubt in halal food (Kamali, 2010),
lack of control of halal food norms (Waarden and van Dalen, 2010; Berger, 2011;
Pointing et al., 2008; Norman et al., 2009; Zakaria, 2008), and sensitivity of the Muslim
consumer towards halal (Havinga, 2011, Wilson and Liu, 2010). These vulnerabilities make
halal supply chains complex to design and manage. These vulnerabilities cannot be
reduced through conventional supply chain models. Conventional models recognise the
importance of efficiency, but are inadequate for considering other aspects such as ethics,
sustainability and human values (Milestad et al., 2010) that are critical for halal supply
chains.
The vulnerability of halal food supply chains, the large size and growth of the halal
market (Alam and Sayuti, 2011; Solsis, 2010) and more stringent requirements in halal
standards, forces brand owners to extend halal towards supply chain management (SCM).
Important questions halal certified food manufacturers have today are whether and how
to start with halal SCM in protecting the integrity for the Muslim consumer and protecting
their brand. Food manufacturers need a reference on how to design and manage halal food
supply chains in order to provide credibility and trust to the Muslim consumer.
This paper defines the principles in the design and management of halal food supply
chains. It introduces the halal supply chain model as a framework to design and manage
halal food supply chains. This framework is based on a large discussion group and
focus groups and serves to provide the halal industry with practical guidance on the
functional requirements and design parameters (Schnetzler et al., 2007) for halal food
supply chains. Next section will discuss the literature review and research framework.
Section 3 will share the research methodology in greater detail. Section 4 presents the
results of the large discussion group and focus groups. Section 5 covers the concluding
section, which is followed by a section on the suggestions for further research.
2. Literature review and research framework Halal
Allah has revealed the code of law for the Islamic way of life and commanded people to supply chain
follow, also knows as Shariah (Islamic law) (Hussaini, 1993; Doi, 1984). The
consumption of halal (lawful) and toyyib (wholesome); and abstaining from haram management
(unlawful) are essential according to Shariah in protecting Islamic faith, life, dignity or
lineage, intellect and property (IHI Alliance, 2009; Laldin, 2006). The grounds of haram
in food according to Kamali (2010) are: 219
.
manifest of harm;
.
intoxication (alcohol and narcotics);
. filth, impurity and natural revulsion (such as carrion, spilt blood, pig meat); and
.
unlawful acquisition.
However, according to the author there are grey areas (matters that fall between halal
and haram), which is due to the sources evidence of the Shariah is not free from doubt
or its application to a particular subject or case uncertain. In these cases the Islamic
school of thought, local fatwas (religious rulings) and local customs play a key role in
judging if it is to be avoided or recommended. Therefore, an important function of
halal SCM is to ensure that a halal product does not move into the grey area or haram
state.
Riaz and Chaundry (2004), Bonne and Verbeke (2008), Abdul et al. (2009),
Muhammad et al. (2009) and Department of Standards Malaysia (2010a, b, c), apply a
hazard analysis and critical control points (HACCP) approach to halal food supply chains.
HACCP is a systematic way of analysis the potential hazards in a food supply chain,
identifying the critical control points in the supply chain where the hazards may occur and
deciding which are critical to food safety (Mitchell, 1992). According to Pun and
Bhairo-Beekhoo (2008) key factors affecting HACCP practices are: food regulations; role of
the industry; government policies and interventions; training on food safety and hygiene;
and food contamination and/or poisoning. Fotopoulos et al. (2011) shows that knowledge,
skills and staff commitment are critical for an effective implementation of HACCP. Similar
to a food safety management system with its food safety control activities and assurance
activities (Lunging et al., 2008), a halal management system is needed with its halal
control activities and assurance activities in logistics business processes.
Halal SCM can be defined as the management of a halal network with the objective
to extend the halal integrity from source to the point of consumer purchase. In order to
ensure that the product is truly halal at the point of consumer purchase it is critical to
define what are principles in the management of halal supply chains. Tieman (2011)
argues that the foundation of halal SCM is determined by three factors, namely: direct
contact with haram (prohibited), risk of contamination and perception of the Muslim
consumer. In his model, risk is based on the product characteristics, such as dry versus
wet products and bulk versus unitised products. Perception is based on the market
requirements, such as Islamic school of thought, local fatwas and local customs.
The halal supply chain model should be adapted from existing (food) supply chain
models that most closely facilitate the Islamic values of halal supply chains. Existing
SCM models like the management paradigm (de Leeuw, 1988), Integral customer service
concept (van Goor, 1991), SCM framework (Cooper et al., 1997), supply chain operations
reference-model (Supply Chain Council, 2011), integral demand and supply chain model
JIMA (van Amstel and van Goor, 2001) and the framework for chain/network development for
3,3 food supply chains (van der Vorst and Beulens, 2002) provide many common
components as shown in Table I.
Although the above models do not contradict Shariah (Islamic law),
important aspects of halal in the design and performance measurement of halal
supply chains are not addressed in these models. The core of the supply chain model is
220 amended from the framework for chain/network development for food supply chain
networks, which was developed by van der Vorst and Beulens (2002), based on Cooper’s
SCM framework (Cooper et al., 1997). This model provides a sound basis, which has been
further amended for the halal supply chain model. The proposed halal supply chain
model is shown in Figure 1.
Logistics control
Logistics control is the heartbeat of the halal supply chain model, which provides the
foundation for effective decision-making and management of a supply chain
(van Damme, 2000). van Amstel (2002) defines logistics control as the organisation, the
planning and control of goods flows, from the development, the purchasing, via
manufacturing and distribution to the end-customer with the aim to satisfy the needs
of customers at low cost and with controlled use of capital. Amongst others, important
elements in logistics control are (van der Vorst, 2000): hierarchy in decision levels
(Hofmann, 2010), type of decision-making (Manuj and Sahin, 2011), positions of the
customer order decoupling point (CODP) (Olhager, 2010; Sun et al., 2008) and level of
coordination (Naspetti et al., 2011). According to Seuring (2009) and Peterson (2002) an
integrated supply chain can only be optimised when the chain participants function
together to improve the overall supply chain. This requires coordination. Aken (1994)
distinguishes four coordination forms, based on leverage (power, influence) and impact
(direct, indirect). Resulting in four quadrants:
(1) regulating coordination (indirect impact and power);
(2) conditional coordination (indirect impact and influence);
(3) conducting coordination (direct impact and power); and
(4) inducing coordination (direct impact and influence).
Halal
Key performance
SCM model Components External factors indicators supply chain
management
Management paradigm Environment, Customer Not identified
(de Leeuw, 1988) managing system,
managed system,
information system 221
Integral customer Competitive Product-market Product availability,
service concept strategy, logistics combination lead-time,
(van Goor, 1991) objectives, logistics reliability, information,
structure, control, ICT, flexibility, post-
organisation, logistics transactional support
performance indicators
SCM framework Supply chain network Customer Not identified
(Cooper et al., 1997) structure, supply chain
business processes,
SCM components
Supply chain operations Plan, source, make, Industry (1) Customer-facing:
reference-model (Supply deliver, return reliability,
Chain Council, 2011) responsiveness,
flexibility;
(2) internal-facing:
costs, assets
Integral demand and Demand and supply Marketing, IT, Quality orders,
supply chain model chain strategy, purchasing, and availability, on-time
(van Amstel and van competitive strategy, logistics delivery, in full delivery,
Goor, 2001) logistics objectives, shelf availability,
demand and supply correct invoiced
chain structure, supply
chain control, chain
ICT, chain organisation,
demand and supply
chain performance
indicators
Framework for chain/ Chain objectives, chain Competitive strategy, (1) Supply chain
network development management, network market characteristics, network level: product
(van der Vorst and structure, chain product characteristics, availability on shelf,
Beulens, 2002) resources, chain and production product quality,
business processes, characteristics responsiveness,
chain performance delivery reliability, total
supply chain costs;
(2) organisation level:
inventory level,
throughput time,
responsiveness,
delivery reliability,
total organisation’s
costs;
(3) process level:
responsiveness,
throughput time,
process yield and Table I.
process costs Existing SCM models
JIMA
Halal Policy
3,3
222
Logistics
Control
P
M
R
A
O
SC SC Business SC Network R
D
Resources Processes Structure K
U
E
C
T
T
Figure 1. Halal SC
Halal supply chain model Performance
As can be deducted from the strategies for each quadrant as described by Kraljic (1983),
halal leads to stronger partnerships for strategic and leverage supply chain partners;
and adopting various strategies to secure continuity of supply, if necessary against at
additional costs, for bottleneck supply chain partners.
3. Methodology
According to de Ruyter (1996), Hines (2000), Stokes and Bergin (2006), Sekaran (2007),
and Walden (2006) focus groups are an effective instrument in order to obtain a rich
understanding of a new phenomenon, such as halal SCM. Focus groups envision
obtaining a better understanding of the logistics business processes involved in halal
food supply chains for Muslim and non-Muslim countries. We have followed the
following four step approach (McClelland, 1994; Walden, 2006):
After this first session the group was split into smaller homogeneous focus groups
(McClelland, 1994; Kitzinger, 1995; Grudens-Schuck et al., 2004; Walden, 2006;
JIMA
No. Measurement Definition References
3,3
1 Effectiveness
1.1 Process quality:
1.1.1 Brand The strength/trust of a brand Christopher (1998), Grunert et al.
(2004), D’Souza et al. (2009),
226 Wilson and Liu (2010), Alserhan
(2010a)
1.1.2 Credibility of The level of trust in the halal Claro and de Oliveira Claro (2004),
halal certificate certification authority and the Brunso et al. (2002), Grunert et al.
standard (2004), Jahn et al. (2005), Giannakas
(2002)
1.1.3 Halal customer The number of complaints received Beamon (1999b), Shepherd and
service in a month regarding the halal status Gunter (2006), Department of
complaints of a product Standards Malaysia (2010a, b, c),
Bigliardi and Bottani (2010)
1.2 Waste:
1.2.1 Waste in the The reject rate as a percentage of the Al-Hakim (2005), Brewer and Speh
supply chain total units produced (2000)
1.2.2 Carbon footprint The amount of greenhouse gas (CO2 Coley et al. (2011), Svensson and
and other gasses converted to CO2) Wagner (2011), Wiedmann and
emissions of supply chains Minx (2008), Lee and Cheong (2011)
1.2.3 Resources used Total energy consumed Beamon (1999a), Aramyan et al.
(2007), Paquette (2005), van Assen et al.
(2010), Abdul-Matin (2010)
2 Efficiency
2.1 SCM costs Logistics and SCM costs as Beamon (1999b), van der Vorst
percentage of the product value (2000), Shepherd and Gunter (2006),
Aramyan et al. (2007), Supply Chain
Council (2011)
2.2 Utilisation:
2.2.1 Utilisation of Capacity spent on halal storage as Gunasekaran et al. (2001),
halal storage percentage of the total capacity van Berg (2007), Bhagwat and
facilities Sharma (2007)
2.2.2 Utilisation of Capacity spent on halal transport or Gunasekaran et al. (2001),
halal transport/ containers as percentage of the total van Berg (2007), Bhagwat and
containers capacity Sharma (2007)
3 Robustness
3.1 Halal rejects The number of rejects by a company van Goor et al. (1999), van Amstel
in the supply chain through damage, and van Goor (2001), Bhagwat and
contamination, spoilage, leakage and Sharma (2007)
theft or tempering
3.2 Availability:
3.2.1 Halal storage Number of on time halal van Berg (2007), Lammers et al.
availability storage services as percentage of the (2009)
total required halal storage services
3.2.2 Halal transport/ Number of on time halal transport or van Berg (2007), Lammers et al.
Table II. container container services as percentage of (2009)
Halal performance availability the total required halal transport or
indicators container services
Sekaran, 2007) on warehousing, transportation and terminals. These focus groups Halal
required 8 to 12 participants (Larson et al., 2004; Grudens-Schuck et al., 2004; Sekaran, supply chain
2007). As argued by Kitzinger (1995) and Grudens-Schuck et al. (2004), it is important to
have multiple sessions in order to get a cross section of views from a diverse population. management
For this purpose IHI Alliance had chosen the Netherlands and China to conduct review
sessions. The objective of the focus groups is to identify the halal control activities and
assurance activities in warehousing, transportation and terminal operations for Muslim 227
and non-Muslim countries, based on personal perceptions (Larson et al., 2004).
4. Results
4.1 Large discussion group
A large discussion group was conducted to build consensus (Larson et al., 2004) on the:
.
scope of halal logistics;
.
principles in halal logistics; and
.
foundation of halal logistics for Muslim and non-Muslim countries.
For a proper scoping, both the width and depth of halal logistics has been agreed upon.
In terms of width it has been agreed to cover warehousing, transportation and terminal
operations. In terms of depth, the following topics should be addressed in halal
logistics, namely: definitions, process requirements, procedures, tracking and tracing,
clean(s)ing (as corrective measure), packaging and labelling, organisation, and
certification. For warehousing, transportation, and terminal operations, dedicated
focus group sessions have been held to address these topics in greater detail. Halal
logistics has been defined as the process of managing the procurement, movement,
storage and handling of materials, parts, livestock, semi-finished or finished inventory
both food and non-food, and related information and documentation flows through
the organisation and the supply chain in compliance with the general principles of
Shariah.
During the large discussion group five principles of halal logistics have been
formulated and agreed upon:
(1) intention to create a global halal logistics system;
(2) minimise hardship for the halal industry;
(3) define cross contamination between halal and haram and how to avoid it;
(4) create an evolution of a complete halal value chain and supply chain; and Halal
(5) benchmark with existing halal standards, best practices, and international supply chain
standards. management
The intention is to create a global halal logistics system, regardless of the Islamic school of
thought, that is Shariah compliant and sets the best practice for ensuring halal integrity
throughout the supply chain to protect the halal integrity for the end-consumers. This is 229
by itself already an important measurement for the validity of this action (Laldin, 2006).
To minimise hardship for the halal industry is in line with Al-Qaradawi (2007) and Laldin
(2006). During the large discussion group it was mentioned and stressed by multiple
participants, that a halal logistics system should be fair and practical. Also a halal
logistics system should not significantly increase the cost of halal products, as this would
be an important determination for the global acceptance of a halal logistics system. One of
the participants also mentioned that safety should come first, which for example applies to
the loading of vessels and aircrafts. Another important principle is to define
contamination between halal and haram and how to avoid it. A little bit haram makes
a product non-halal (in case of cross contamination) and in case of doubt, the product
should be avoided (Al-Qaradawi, 2007). It is extremely important that halal products are
segregated from non-halal products, to avoid cross contamination, mistakes and to ensure
that the operations are consistent with Shariah and the expectations of the stakeholders.
As halal logistics and SCM is a new discipline in halal, an evolution is needed of a complete
halal value chain and supply chain. The integrity of a halal product for the consumer
(and therefore the halal supply chain) is a function of the integrity of the various links in a
supply chain (van der Vorst, 2006). As conventional halal standards are traditionally
focused on the slaughtering and production, the integrity of the entire halal supply chain
has not been controlled. Also recognising the challenge of introducing halal logistics in
non-Muslim countries, where the halal (certified) volumes are much smaller than in
Muslim countries, halal logistics will need to go through an evolution. It was therefore
suggested to establish a minimum standard (applicable to non-Muslim countries) and a
preferred standard (applicable to Muslim countries and to non-Muslim countries over
time). Finally, a benchmark with existing halal standards, best practices and international
standards is important as foundation of a halal logistics system.
During the large discussion group, three levels have been identified in relation to the
foundation of halal logistics in Muslim and non-Muslim countries, which is based on
direct contact with haram, risk of contamination and perception of the Muslim
consumer. Recognising that a supply chain perspective to halal is new, it was decided
to create a minimum level of compliance, which is addressing direct contact with
haram as well as the risk, and a preferred level, which is addressing also perception.
The minimum level should be irrespective of the different Islamic schools of thought
and not contradicting Shariah, whereas the preferred level should amongst others
address the sensitivity of Muslims: the particular Islamic school of though, local fatwas
and local customs. If possible for Muslim countries, it should be envisioned to meet the
preferred level of a halal logistics system, whereas for non-Muslim countries a
minimum level could be more practical or feasible. However, in time also a preferred
level could be achieved by certain non-Muslim countries. For exports the
standard applied should match at least the requirements by the importing country.
Figure 3 shows an overview.
JIMA
3,3
Perception
Preferred level
230
Risk
Minimum level
The large discussion group allowed achieving consensus on various more key principles
in halal logistics. It was first of all confirmed that halal requires a supply chain approach
and logistics is critical in ensuring the halal integrity for the Muslim consumer. Halal
logistics requires also a process approach, where processes and procedures have to be
clearly documented as proof of a halal logistics system. Although a halal logistics
system should prevent contamination to occur, also corrective measures will need to be
defined to limit the risk of contamination of other halal cargo as well as to “repair” the
perception/sensitivity of the Muslim consumer. It has also been agreed by all that there
are different levels of najs (filth), which might be more practical to consider for the level
of segregation. For this the MS 1500:2004 (Department of Standards Malaysia, 2004)
would be used as a benchmark. Consensus was formed that the halal integrity is
confined to a container or transport vehicle. Therefore, it does not matter what is on top,
below, or next to a halal container/transport vehicle. In terms of tracking and tracing, it
has been agreed by all to cover only tier one customers and suppliers (Lambert et al.,
1998; Lammers et al., 2009) as the width of traceability; and second, to limit the
traceability depth to the chain of custody. This is in line with the EU regulations for food
supply chains. The technology for tracking and tracing has not been specified, as it
should be open, and not create any thresholds for small players without advanced
information and communication technology to comply with.
According to the large discussion group an important determinant for the
vulnerability of halal food supply chains is the product characteristics. Refrigerated
products, like fresh meat, are found to be more sensitive for contamination as compared
to dry products, such a canned fish, packed chocolate cookies and a bottle of cola
(ambient environment). Second, bulk products have a higher perceived risk than
unitised products, as bulk products directly touch the container or transport vehicle. The
level of segregation is therefore determined by both product characteristics as well as
market requirements.
4.2 Focus groups Halal
There are significant differences between Muslim and non-Muslim countries from the supply chain
focus group sessions held in Malaysia, the Netherlands and China. In Muslim countries,
toyyib (wholesome) can be seen as a component of halal, whereas in non-Muslim management
countries halal can be seen as a component of toyyib. Although in non-Muslim countries
non-Muslims understand that direct contact with haram should be avoided, the risk and
perception factor is not well understood. From the focus group discussions it followed 231
that perception is very important for Muslim countries. For logistics, perception in a
Muslim country can be regarded as a homogeneous factor. However, in non-Muslim
countries, with Muslims from diverse Islamic schools of thoughts, this is not the case.
This results in a more heterogeneous and therefore more complex perspective on
perception. The focus group sessions in Rotterdam and Hong-Kong showed that in
non-Muslim countries the halal goods flows are small, which do not allow for dedicated
halal infrastructure as it would increase the cost of halal products dramatically and
would result in certain countries or parts of a country halal products are not available. As
this would incur hardship for Muslims living in non-Muslim countries, it was clear that
two levels of segregation were needed, a minimum and a preferred level. For non-Muslim
countries this is based on the minimum level: direct contact with haram and risk of
contamination. For Muslim countries this is based on the preferred level: direct contact
with haram, risk and the perception of the Muslim consumer. During the focus group
session on the warehouse it was stressed that it is critical to maintain consistency in the
minimum integrity level throughout the supply chain: transportation, warehouse and
terminal. In transportation, loading and stuffing is the most critical activity. As a
dedicated halal terminal is difficult, segregation is critical through coding, marking and
identification. The discussions in Malaysia emphasised on the importance of the
competency in halal for the people involved in the halal logistics operations. As Europe
is exporting to many Muslim countries in the Middle East and Asia it has a preference to
comply with the most stringent level for its export to Muslim countries, which is
accepted by all Muslim countries worldwide, instead of the need to modify processes and
procedures depending on the specific Muslim country. The Netherlands halal
certification body suggested differentiating between haram (clearly prohibited) and
non-halal (not certified halal). It was argued by the various parties present that halal
and haram should not be put together in cold chain environment, whereas halal and
non-halal slaughtered meat (from a halal livestock) could for example be very well stored
in the same cold room or transported in the same container/transportation vehicle, which
would benefit the utilisation of cold rooms and transport of halal products.
Halal assurance activities have been assessed for warehousing, transportation,
terminal operations and clean(s)ing (as corrective measure). A warehouse has the
following logistics processes (Frazelle, 2002; van Berg, 2007; The Singapore Logistics
Association, 2008; Engelbregt and Kruijer, 2009): receiving, put-a-way, storage,
cross-docking, value added logistics (VAL), replenishing, order picking and shipping.
The halal control activities and the corresponding assurance activities for the
warehouse as identified, reviewed and agreed upon are shown in Table III.
Tables IV-VI show the halal control activities and assurance activities for transport,
terminals and clean(s)ing as identified, reviewed and agreed upon.
From the focus groups it follows that the major obstacles of halal food supply
chains are:
JIMA
Halal control
3,3 activity Minimum (non-Muslim country) Preferred (Muslim country)
.
the level of segregation required at the last mile to retail in non-Muslim countries;
.
the level of segregation required at cold rooms in air terminals in non-Muslim
countries;
.
consolidation on air cargo pallets at airports;
. stuffing of less-than-container load containers;
.
understanding of halal in non-Muslim countries; and
.
the lack of protection of halal in non-Muslim countries.
The major success factors of halal food supply chains found are:
.
communication of “halal supply chain” code through freight documents and ICT
systems;
Halal
Halal control activity Minimum (non-Muslim country) Preferred (Muslim country)
supply chain
1. Cleaning of bulk tanker/ Cleaning according to prevailing Ritual cleansing (if applicable management
container/transport hygiene standards in case of an to the Islamic school of thought,
vehicle before use earlier non-halal or unknown otherwise cleaning conform
previous shipment existing standards) in case of
an earlier non-halal or unknown 233
previous shipment
2. Cleaning of refrigerated Cleaning according to prevailing Ritual cleansing (if applicable
container/transport hygiene standards in case of an to the Islamic school of thought,
vehicle before use earlier non-halal or unknown otherwise cleaning conform
previous shipment existing standards) in case of an
earlier non-halal or unknown
previous shipment
3. Loading/stuffing of No mixing of halal and non-halal No mixing of halal and non-halal
tanker/container/ bulk products; no mixing of halal bulk products; no mixing of halal
transport vehicle and non-halal products on one and non-halal products in a
pallet/load carrier; no mixing of container/transport
halal and haram products in a
refrigerated container/transport
4. Transport of halal No mixing of halal and non-halal No mixing of halal and non-halal
livestock livestock livestock
5. Documentation “HALAL SUPPLY CHAIN” label “HALAL SUPPLY CHAIN” label
on pallet/load carrier; ensure on pallet/load carrier; ensure
“HALAL SUPPLY CHAIN” is “HALAL SUPPLY CHAIN” is
marked/coded on freight marked/coded on freight
documents; “REJECTED” label on documents; “REJECTED” label on Table IV.
pallet/load carrier in case of pallet/load carrier in case of Halal control activities
damage, contamination, spoilage, damage, contamination, spoilage, and assurance activities
leakage, theft or tempering leakage, theft or tempering in transport
.
capitalising on the halal product flows in non-Muslim countries that are not sold
as halal certified products;
.
the application of innovations to simplify segregation in a non-Muslim environment;
.
first-mover advantage; and
.
taking a manufacturer/brand owner perspective in halal logistics.
5. Conclusion
Through extensive literature review, a large discussion group and focus groups,
a framework has been introduced to optimise the design of halal food supply chains. The
halal supply chain model consists of the following elements: halal policy, supply chain
objectives, logistics control, supply chain resources, supply chain business processes,
supply chain network structure, and halal supply chain performance. This model is
developed through a combination of existing supply chain models, namely the integral
customer service concept (van Goor, 1991; van Amstel and van Goor, 2001), the SCM
framework (Lambert et al., 1998) and the framework for chain/network development
(van der Vorst and Beulens, 2002). Although existing (food) supply chain models do not
contradict Shariah, these models have not addressed important aspects in the design
and optimisation of halal food supply chains. First, a halal policy is the basis of a halal
JIMA
Halal control activity Minimum (non-Muslim country) Preferred (Muslim country)
3,3
1. Inspection of halal Verification of halal status through Verification of halal status through
goods freight documents, labels and marks freight documents, labels and marks
present on freight, and physical present on freight, and physical
inspection of freight and packaging; inspection of freight and packaging;
234 move halal goods to a designated move halal goods to a designated
inspection area for inspection inspection area for inspection
2. Temporary storage of Halal products have a designated No mixing of halal and non-halal
halal goods in cold (floor) storage zone or racks (no products in the same cold room
room mixing of halal and non-halal
vertically); no mixing of halal and
haram products in the same cold
room
3. Consolidation of goods No mixing of halal and non-halal No mixing of halal and non-halal
products on one pallet/load carrier; products in a container/transport
no mixing of halal and haram
products in a refrigerated container/
transport
4. Halal livestock holding No mixing of halal and non-halal No mixing of halal and non-halal
livestock in holding yards livestock in holding yards
5. Documentation “HALAL SUPPLY CHAIN” label on “HALAL SUPPLY CHAIN” label on
pallet/load carrier is a code for halal pallet/load carrier is a code for halal
certified products; ensure “HALAL certified products; ensure “HALAL
SUPPLY CHAIN” is marked/coded SUPPLY CHAIN” is marked/coded
Table V. on freight documents; “REJECTED” on freight documents; “REJECTED”
Halal control activities label on pallet/load carrier in case of label on pallet/load carrier in case of
and assurance activities damage, contamination, spoilage, damage, contamination, spoilage,
in terminals leakage, theft or tempering leakage, theft or tempering
Cleaning of severe najs (pig, and Cleaning of severe najs Cleaning of severe najs
dog and its liquid, objects according to existing cleaning according to ritual cleansing
Table VI. discharged from their orifices, standard standard (if applicable to the
Halal control activities descendants and derivatives Islamic school of thought,
and assurance activities (IHI Alliance, 2010)) otherwise cleaning conform
in clean(s)ing existing cleaning standards)
supply chain model to ensure the right intention and guide the organisation in
addressing Islamic values in its halal food supply chains. Second, a halal supply chain
model provides practical guidance on the specific design parameters, which allows
operationalisation of the halal supply chain model.
From the large discussion group and focus group sessions it can be deducted that
the product characteristics (bulk versus unitised and ambient versus cool chain) and
market requirements (Muslim versus non-Muslim country) influence the vulnerability
of halal supply chains. Vulnerability of supply chains is reduced through simplifying
the supply chain structure and establishing halal control activities and assurance
activities in logistics business processes. Vulnerability can be avoided in (parts of)
the supply chain by having dedicated logistics infrastructure, like a dedicated halal Halal
warehouse and transport, or through containerisation at a lower level. The remaining supply chain
vulnerability determines the robustness of a supply chain. As the market requirements
(Muslim or non-Muslim country) determine the level of segregation, a dedicated Halal management
Regional Distribution Centre (HRDC) can become an important CODP (Olhager, 2010)
for the last mile. A strategic fit (Hofmann, 2010; Schnetzler et al., 2007) has
been realised by the formulation of a halal policy and supply chain objectives 235
(functional requirements) that determine the design parameters. Second, an alignment
(Fisher, 1997) has been achieved by defining the relationship between product-market
combination and the design parameters.
Coordination is critical in halal supply chains to consolidate halal cargo flows. This is
especially important for non-Muslim countries in achieving efficiencies in halal supply
chains. Second, depending on the destination market a halal supply chain requires a
certain specified level of segregation throughout the supply chain. This will impact
decisions in supply chain planning and execution, which need to be well communicated
to the supply chain partners. This research confirms that in non-Muslim countries the
supply chain partners that are halal certified or compliant are much more scarce and
require an important focus in the management of halal supply chains. The use of a CODP
at a dedicated HRDC allows customising the halal segregation level from the HRDC
onwards.
This research also addressed supply chain resources. As halal logistics has implications
for the warehousing, transportation and terminal operations, extensive training is required
for the operations staff to assure the halal integrity of the logistics operations. In
non-Muslim countries there would be benefits by developing innovative logistics cargo
solutions, like containerisation at lower level, to simplify segregation for export markets.
Sharing the halal status of cargo through the “halal supply chain” code has been argued to
be one of the most important critical success factors for effective halal supply chains.
Tracking and tracing is limited to only tier 1 customers and suppliers as the width of
traceability; and second, to limit the traceability depth to the chain of custody only.
This research also addressed supply chain structure. First of all simple supply chain
structures are more effective in realising robust halal food supply chains as compared to
long and complex supply chains. The choice of a gateway is also important, as at terminals
there are a lot of supply chain vulnerabilities. International gateways that are halal certified
or understand halal would have a clear preference for the distribution of halal goods.
The focus groups allocated significant time to discuss the supply chain business
processes. The halal control activities and assurance activities identified in
transportation, warehousing, terminal operations and clean(s)ing provide practical
guidance for the industry in designing and managing logistics business processes for
certain product-market combinations. The halal control activities and assurance
activities have been reviewed by the Shariah panel of IHI Alliance and have been
amended accordingly and published by IHI Alliance as the International Halal Logistics
Standard IHIAS 0100:2010 (IHI Alliance, 2010), which can be certified globally. This
standard is also used as the reference for the halal supply chain initiative, a global
initiative to promote the integrity of halal supply chains. Figure 4 shows the results of
the large discussion group and focus groups in the halal supply chain model in realising
robust halal food supply chains.
JIMA Ensure robustness
Halal Policy through reduction and
3,3 removing of
vulnerabilities
P
M
R
A
O
SC SC Business SC Network R
D
Resources Processes Structure K
U
E
C Simple supply chain
Halal control activities T
T structure; Halal gateway
and assurance activities
partners
Halal SC
Figure 4. Bulk or unitised; Performance
Muslim or Non-Muslim
Robust halal supply Wet (chilled, frozen)
country
chain model or dry (ambient)
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