Halal supply chain management is becoming important for consumer confidence in halal certified products. However, halal supply chains are complex supply chains with vulnerabilities that need to be addressed through well organised robust, effective and efficient halal supply chains. This paper sets out to argue that new innovative solutions are needed for better optimisation of halal supply chains that exploit collaboration, both vertically with supply chain partners and horizontally among companies in the same industry. Methods in vertical collaboration proposed are halal clusters and a halal supply chain orchestrator. Possible methods in horizontal collaboration are direct collaboration models and collaboration through an intermediary. Governments are recommended to stimulate vertical and horizontal collaboration initiatives in the halal industry and the development of a more advanced halal standard, incorporating international halal standards, which support a supply chain approach to halal. Industry pilots and case study research are needed to test the various collaboration concepts and provide practical solutions for the halal industry to optimise international halal supply chains.
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Integrity of halal supply chains is becoming
an increasing concern for governments and
industries due to:
1)halal integrity issues are more likely to
occur than before
2)Halal integrity issues are harder to detect
3)Once detected go viral on the internet,
exposing the integrity of country’s halal
systems and corporate brands
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The neglect of halal requirements
throughout the entire supply chain is
gradually weakening consumer confidence
in halal certified products!
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The halal industry has not widely
implemented halal logistics standards, as
halal certification bodies have not extended
halal requirements toward the supply chain.
This has resulted in a halal industry where
food safety (tayyib) requirements receive
a ‘supply chain approach’ and halal
requirements only a ‘product approach’!
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As the holy Qur’an (2:168) puts halal and
tayyib at equal footing, it would be logic to
extend halal assurance toward the supply
chain!
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A supply chain is a network of parties that
link the source to the point of consumer
purchase.
Supply chains
Source:Lambert&Cooper(2000)
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The horizontal supply chain structure
refers to the number of tiers across the
supply chain [short vs. long].
The vertical supply chain structure
refers to the number of suppliers/customers
represented within each tier [narrow vs.
wide] (Lambert & Cooper, 2000).
Supply chains
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Halal clusters are spatial clustering of halal
production chains (food, cosmetics,
pharmaceutical manufacturing) in an
industrial park or economic zone, whereby a
significant part of the supply chain is
geographically positioned in a halal cluster.
Halal clusters
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Today there are halal park initiatives in
Brunei (Bio-Innovation Corridor), China
(Qinzhou), Malaysia (21 halal parks), and
the United Kingdom (Birmingham and
Norfolk).
Halal clusters
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The halal supply chain orchestrator
manages global halal supply chains
according to the specification of the
designation market and ensures that the
integrity is maintained throughout the halal
network.
He makes use of common halal distribution
centres, consolidation of transportation and
innovative logistics concepts (Tieman,
2012).
Halal supply chain orchestrator
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The role of the halal supply chain
orchestrator can be fulfilled by a fourth-
party logistics service provider (4PL): an
integrator that assembles the resources,
planning capacity, and technology of its own
organisation and other organisations to
design, build, and run comprehensive
supply chain solutions.
Halal supply chain orchestrator
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1)Effective halal supply chain
assurance: reference to one international
halal logistics standard (e.g. IHIAS
0100:2010) and consistent communication
of halal status (‘halal supply chain’ code)
throughout the supply chain
2)Standardisation of halal assets in
the supply chain: from source to point of
consumer purchase
3)Supply chain optimisation: sharing
demand data, reducing inventories, and
better transport planning
Vertical collaboration allows for:
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1)Dominant industry player, where smaller
players can use their halal assets or supplier
contract
2)Transportation is facilitated by company
A, Warehousing by company B, and cargo
boxes by company C
3)Collaboration on project basis, for
example: Hajj season and humanitarian aid
4)Intensive collaboration on continuous
basis, where many activities are done jointly
together
Direct collaboration forms
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An intermediary is able to consolidate
halal goods flows for different
companies that need domestic road
transportation, cross border transport, air
shipments, sea shipments, warehousing,
and value added logistics.
In here various companies can make use of
the expertise of, global network of and
ability to consolidate halal flows by this
halal logistics service provider.
Intermediary
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1)Sharing of information: ‘halal supply
chain’ code, best practices in halal supply
chain and value chain, and halal
specifications [machine slaughter: yes/no;
stunning: yes/no]
2)Pooling of resources: outsourcing to a
common (halal certified or compliant)
logistics service provider, efforts, halal
assets
3)Bundling of halal volumes: reducing
transportation costs, improved segregation
conditions
Horizontal collaboration allows for:
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The application of vertical and horizontal
collaboration concepts provide better
control of halal supply chain from source to
point of consumer purchase and increase
the confidence of the consumer in halal
certified products.
These collaboration concepts require a more
advanced halal certification system (beyond
product certification), expanding halal
regulation along the supply chain. This
should reduce the exposure of a country’s
halal system and brand owners.
28. LBB International
B-5-8 Plaza Mont Kiara
Mont Kiara
50480 Kuala Lumpur
Malaysia
Dr. Marco Tieman
Chief Executive Officer
marco@lbbinternational.com
www.lbbinternational.com
halalsupplychainmanagement.blogspot.com
Thank you
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Lambert, D.M., & Cooper, M.C. (2000). Issues in supply chain
management. Industrial marketing management, 29(1), 65-83.
Tieman, M. (2011). The application of halal in supply chain
management: in-depth Interviews. Journal of Islamic
Marketing,2(2), 186 – 195.
Tieman, M. (2012). Control of halal food chains. Islam and
Civilisational Renewal, 3(3), 538-542.
References
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IHI Alliance (2010), ICCI-IHI Alliance Halal Standard: Logistics –
IHIAS 0100:2010 [first Edition], Kuala Lumpur: International Halal
Integrity Alliance.
Tieman, M., Vorst, J.G.A.J. van der, & Ghazali, M.C. (2012).
Principles in halal supply chain management. Journal of Islamic
Marketing, 3(3), 217-243.
Tieman, M. (2014). Synergy in Halal Supply Chains. Islam and
Civilisational Renewal, 5(3), 454-459.
Recommended literature
Hinweis der Redaktion
The evolution of the value chain was published in the Journal of Islamic Marketing, an international academic journal under the Emerald Group (UK).
I recognise 4 phases: the Muslim company, halal product, halal supply chain and halal value chain. Important to recognise for the Industry (as well as Governments) that one phase builds further on the previous phase and that phases cannot be skipped.
I will present now in detail the various phases.