1.

Challenges towards Company to adopt Halal Logistics

Perishable commodities and raw materials as well as food products are protected from
contamination by halal logistics. (Scientific American, August 4, 2014; Science Direct
Publishing Business). As a massive undertaking, Halal Logistics' principal purpose is to ensure
the integrity of Halal products for the benefit of Halal consumers. According to MITRANS
(2012) in order to maintain Halal status within the supply network, Halal Logistics is defined as
"the command and control of products flows in a value system". Therefore, logistics is
described as "the process of regulating the flow of resources (both food and nonfood),
components (livestock) semi-finished products and finished goods in accordance with broad
Shariah principles, as well as the final inventory (both food and nonfood) in the supply chain."
As part of the supply chain activities for halal products, it is required to distinguish between
halal and non-halal commodities to ensure compliance. On the other hand, Halal products
should be stored in a separate place. Numerous research studies have demonstrated that while
the field of halal logistics is expanding, it faces a number of obstacles to further. The halal
certification authority's inefficiencies, concerns with halal integrity, and lack of openness limit
halal logistics service providers (LSPs), according to Tieman (2011) and Wilson (2012).
To classify these challenges further, Talib et al. (2013) identify five major sub-areas:
Halal industry/business, LSP integration, JAKIM/HDC collaboration, financial ramifications,
and government promotion and assistance. A number of factors pose challenges to adopt halal
logistics. JAKIM only accepts a small number of halal certifying bodies around the world, yet
both production and commercial cargo might originate from anywhere in the world (Talib et al.,
2010). Tieman (2013) proposes Halal certification around the world in order to address this
problem. A halal logistics system that is built on equitable and realistic principles is being
developed now. Two reasons for the greater costs associated with Halal logistics
implementation are: (1) an inefficient system and (2) a lack of qualified Halal logistics
professionals (Talib et al., 2013). Inefficient and ineffective results might be caused by a lack of
understanding about contamination sources and recommended measures to avoid them. A global
standard guideline is required to accurately discern between halal and haram cross
contamination, according to Tieman (2013). Logistics infrastructure such as Halal warehouses,
storage units, containers and transportation (as well as Halal-only handling equipment) have
already been priced for implementation. Given the limited resources as well as the fact that the
majority of Malaysia's logistics companies are small and medium-sized enterprises (SMEs), not
all LSPs can provide full-service halal logistics. According to Tieman, et al. (2013), high
logistical expenses can be passed on to customers and halal methods should not considerably
raise logistics costs (Tieman et al., 2012). Due to the demand for Halal logistics is modest, the
establishment of a Halal logistics centre is not justified. As a result, LSPs now have to worry
about additional costs associated with Halal logistics.
Therefore, most logistics businesses do not adhere to Halal norms and non-halal
products are nevertheless carried or housed in the same warehouses as Halal products (Talib et
al., 2013). Internal and external constraints to halal logistics operations were categorized by
Talib et al. (2015) as such. Halal logistics adoption is hindered by internal factors such as
budgetary restrictions, aversion to change and underutilized services. A total of three groups of
barriers were identified: barriers between firms (standardization), barriers between governments
(lacking halal facilities, lack of support and traceability) and barriers between businesses and the
government (insufficient halal training and promotion). The barriers between firms and
authorities were divided into three categories: (Strict halal standards, lengthy certification
processes, and official communication impediments). A new empirical investigation conducted
by Ngah et al. (2014), looked into factors that influence the uptake of halal warehousing. A lack
of readily available halal warehouse suppliers hampered the uptake of the service, as did lack of
knowledge, complexity and top-level assistance.

References

Suhaiza, Z., Mohammad, I., Azmin, A., Aziz, Kanagi, K., (2017),"Halal logistics opportunities
and challenges", Journal of Islamic Marketing, Vol. 8.

Syuhaida et al. (2018). Issues, Challenges and Strengths of the Halal Logistics in Malaysia.
https://www.researchgate.net/publication/327645266_Issues_Challenges_and_Strengths
_of_the_Halal_Logistics_in_Malaysia