The application of Halal in supply

chain management: in-depth

interviews
Marco Tieman
Business Management Faculty,
Universiti Teknologi MARA, Shah Alam, Malaysia
Abstract
Purpose The paper aims to describe the basic requirements of Halal food supply chains in order to
ensure the integrity of Halal food at the point of consumption, which is an obligation for Muslims.
Design/methodology/approach This exploratory research paper is based on in-depth interviews
to better understand what is Halal, the Islamic sources that are essential for Halal supply chains, and
identify the guidelines and principles which are essential for the integrity of Halal supply chains.
Findings Halal supply chain management is based on avoiding direct contact with Haram,
addressing the risk of contamination and ensuring that it is in line with the perception of the Muslim
consumer. In particular, the product and market characteristics are important variables in the supply
chain management of Halal supply chains. Further empirical research is needed to measure the
perception of the Muslim consumer. A better understanding is also required into the principles in
organising the Halal supply chain for different markets (Muslim and non-Muslim countries). There is a
need for a Halal supply chain model that is able to describe and optimise Halal supply chains.
Research limitations/implications Since this paper is an exploratory study, it provides some
insights into the considerations in organising Halal supply chains. However, further qualitative and
quantitative research is needed in order to provide the industry with concrete tools to design effective
Halal supply chains.
Practical implications In response to the logistics industry that started with Halal logistics
solutions, the Halal certied food industries needs to know whether and how to start with a Halal
supply chain approach. This paper presented key considerations to address in organising effective
Halal supply chains.
Social implications Halal in non-Muslim countries is not very well understood, where in logistics
only the aspect of avoiding of contact with Haram is addressed mainly through packaging. This
article presents a better understanding of Halal and the application of Halal in supply chain
management.
Originality/value There is a lack of academic research in Halal logistics and supply chain
management. This exploratory research provides some basic fundamentals on the supply chain
management of Halal products.
Keywords Halal supply chain, Supply chain management, Halal logistics, Islamic culture, Halal, Islam
Paper type Research paper
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1759-0833.htm
The author wouldlike tothankthe followingpeople for their participationinthe in-depthinterviews:
Mr DarhimHashim(IHI Alliance Ltd, Malaysia), Mr Ahmad Azudin Abd Khalid (IHI Alliance Ltd,
Malaysia), Professor Dr Abd-Elaziem Farouk (Brunei Darussalem University, Brunei),
Professor Dr Yaakob Che Man (Universiti Putra Malaysia, Malaysia), Dr Suhaimi Ab. Rahman
(Universiti Putra Malaysia, Malaysia), Associate Professor Dr Mohamad Akram Laldin
(International Shariah Research Academy for Islamic Finance, Malaysia), Associate Professor
Ghaffarullah (Universiti Teknologi Mara, Malaysia), Dr Nor Azman (Halal Industry Development
Corporation, Malaysia), Mr Irfan Sungkar (University of Malaya, Malaysia).
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Journal of Islamic Marketing
Vol. 2 No. 2, 2011
pp. 186-195
qEmerald Group Publishing Limited
1759-0833
DOI 10.1108/17590831111139893
1. Introduction
Halal is a Quranic term that means permitted, allowed, lawful or legal. Its opposite is
Haram(forbidden, unlawful or illegal). In Islamand according to Shariah (Islamic Law),
all issues concerning Halal or Haram and even all disputes should be referred to Quran
and Sunnah (prophetic tradition) (Doi, 2007). Halal and Haram are universal terms that
apply to each activity carried out by man, whether it is related to his ibadat or muamalat
or muasharah. However, Halal in relation to food is specied by the Quran and the
Sunnah (Hussaini, 1993; Mohamad, 2005). As also argued by Laldin (2006) is that new
developments, such as Halal supply chain management, require a concerted effort to
understand and expand the deductions from the main sources of Islam: the Quran and
Sunnah.
Muslims want assurance that the products they consume are a true manifestation of
Islamic principles, plus they should be toyyib, meaning wholesome and good (World
Halal Forum, 2009). As the Halal integrity of the product is a result of the various
activities in the supply chain, a supply chain approach is important to guarantee the
Halal integrity at the point of consumption. According to Bonne and Verbeke (2008)
Muslim consumers lack information on the supply chain and cannot be reassured that
no cross-contamination has taken place. This is one of the main reasons that Muslims
in Europe have been buying their Halal products from Muslim butchers in non-Islamic
countries, as the Muslim butcher then carries the responsibility to God to ensure the
meat is Halal (not anymore the consumer). Although current Halal standards regulate
food production, preparation, handling and storage to some degree, it does not ensure
that the product is Halal at the point of consumption (Tieman, 2006). In particular,
Halal logistics capabilities are critical in ensuring the Halal integrity of the supply
chain from farm to fork (Tieman, 2007).
What does a Halal product and a Halal brand really means? In the pure technical
sense, a Halal product is a product t to consume for Muslims. This can be food,
cosmetics (like tooth paste) or even relate to pharmaceuticals (like cough syrup). Atrust
mark (Halal logo) can be placed on the Halal products for Muslims to know that the
product is Halal (Cheng, 2008). Recently, Halal status products also have extended to
lifestyle (like clothing) and services (like Islamic banking, hospitality, logistics, etc.)
(Alserhan, 2010b). Halal as a concept cannot be fully encapsulated within the construct
of product, Halal reaches much further into the disciplines of management of the
company, organisational behavior, culture anthropology and sociology (Wilson and Liu,
2010; Zakaria and Abdul-Talib, 2010). As argued by Lada et al. (2009), Alserhan (2010a),
Ibrahimand Mokhtarudin (2010) and Wilson and Liu (2010), Halal needs a supply chain
approach. Halal should also take into consideration the spiritual needs of the Muslim
consumers (Alserhan, 2010b) and Islamic values (Zakaria and Abdul-Talib, 2010).
Zakaria and Abdul-Talib (2010) argue for a cultural perspective of market orientation
and created an Islamic market-oriented cultural model. Hofstedes (1991) onion diagram
provides a useful framework to identify the different aspects of Islamic culture. Hofstede
and McCrae (2004) describe culture as the collective programming of the mind.
He stresses that culture is a collective attribute, not distinctly visible, but manifested in
behaviors and common to some but not all people. The onion diagram from Hofstede
(1991) describes culture as an onion with different layers consisting (from core to outer
layer) of: values, rituals, heroes and symbols.
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The word Halal and its Arabic character is an important mark (symbol), which
symbolises Halal. Prophet Muhammad exhibited the best conduct, and his life is the best
example to emulate and follow (hero) (Hussaini, 1993, p. 7). The records of the actions
and sayings of the Prophet have been written in the Sunnah (Laldin, 2006, p. 2).
Amongst others, important procedures (rituals) in Islam are the Islamic way of
slaughtering and for certain Islamic schools of thought (like the Shai) also prescribe
ritual cleansing, better known as Samak. The core (values) of the Islamic culture is based
on the Holy Quran, which is the vouchsafed Word of Allah (Laldin, 2006, p. 2).
By adopting this model for Islamic culture, the following model can be drafted as shown
in Figure 1.
Although it can be argued to classify Halal products and brands according to
country of origin and focus market (Alserhan, 2010b), it could also be argued that Halal
goes through an evolution as shown in Table I.
In the rst phase (Muslim company) the Halal supply chain is purely based on trust.
AMuslimis buying fromanother Muslim, and therefore the seller will be responsible to
God for ensuring that the food he/she is selling is Halal. In this way, the buyer has
sufcient condence that the Halal he/she is consuming is Halal. In the second phase
(Halal product) an important basis for trust is the Halal certication (mark) behind this
product as shown on the consumer product or outlet (in case of a meat shop or
restaurant). This Halal trust mark provides assurance that the product, its source and
facility have been veried by an independent Islamic Certication Authority to be
compliant with Shariah. In the third phase (Halal supply chain), the Halal trust mark
provides assurance that the entire supply chain is compliant with Shariah, which is
audited and certied by an Islamic Certication Authority. The third phase recognises
the sensitivity of supply chains and ensures robust Halal supply chains that better
protect the Halal integrity for the end-consumer. In the fourth phase (Halal value chain),
Figure 1.
Islamic culture
Quran
Islamic slaughtering
Sunnah
Source: Adopted from Hofstede (1991)
Samak
Halal logo
Prophet Muhammad
Halal brand
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Halal covers the entire value chain. In this phase, Islamic food multinationals control
entire supply chains from seed to fork. (Islamic) science is important to ensure
high-performance supply chains. As alternative to the highly uctuating US dollar and
Euro, an international Islamic currency will be used for international Halal trade. Instead
of current green movements that have the ambition of being environmental neutral, the
future Halal value chain will create value, value for the community as well as the Earth.
2. Methodology
The in-depth interview envisions obtaining a better understanding from the Shariah
perspective, what the application is of Halal for supply chain management. According
to Hannabuss (1996), Wright (1996), Maxwell (2005) and Sekaran (2007) the in-depth
interview is an effective tool in order to obtain a rich understanding of a new
phenomenon, such as Halal supply chain management is.
The in-depth interviews intend to understand the application of Halal in supply
chain management. More specically, what needs to be understood is:
.
What is Halal from a logistics, supply chain management point of view?
.
Which Islamic sources are essential for Halal supply chain management?
.
Which guidelines and principles are essential for the Halal integrity of Halal
supply chains?
Phase 1 2 3 4
Name
Muslim
company Halal product
Halal supply
chain Halal value chain
Characteristics
of Halal
supply chains
Based on trust Based on local Halal
standard
Source is Halal certied
Based on
complex set of
local, regional
and
international
Halal standards
International
Halal
manufacturing
and distribution
zones
Islamic
multinational food
companies that
control entire
supply chains from
seed to fork
Islamic science
based Halal supply
chains
One international
Islamic currency
Issues in Halal
supply chains
Lack of Halal
certication
authority
Halal integrity
concerns on
imports
Efciency of Halal
certication
Transparency of Halal
standard
Lack of Halal certied
ingredients
Halal standards
are not
harmonised
Lack of certied
logistics service
providers
Lack of Islamic and
Halal researchers
Lack of food
scientists
Ownership of
natural resources
Example
countries
Many countries
in the Middle
East, Africa,
Asia and
Eastern Europe
GCC countries, Indonesia,
Singapore, Thailand,
the USA, Canada, France,
The Netherlands,
Australia, New Zealand,
Bosnia, the UK
Malaysia and
Brunei are in the
early stage of
phase 3
None
Source: Original
Table I.
Evolution of Halal
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Purposive sampling was carried out to meet with international leading Shariah and
Halal experts, which are based in Malaysia and Brunei. The persons interviewed were
identied as having a solid expertise in Shariah and Halal as well as being currently
active in Halal research and/or innovation at international level playing eld. These
experts were chosen from the following organisations: International Halal Integrity
Alliance (Malaysia), Brunei Darussalem University (Brunei), University Putra
Malaysia (Malaysia), International Shariah Research Academy for Islamic Finance
(Malaysia), Universiti Teknologi MARA (Malaysia), Halal Industry Development
Corporation (Malaysia), and the University of Malaya (Malaysia). Random sampling
was not possible given the small number of experts in this eld. However, the sample
was cross-checked through desk research in Malaysian academic and professional
publications on Halal. A rst interview was tested with a friendly party, IHI Alliance
Ltd, to modify the questions further were needed. As the topic of the research thesis
was of high interest to the persons contacted, it was easy to arrange for an in-depth
interview without any rejects. Although the sample size was small with seven
interviews, it was possible to conduct in-depth personal interviews of an average of one
hour and 14 minutes duration. The interviews were conducted in English, which was
not a problem for these experts, since these experts were highly educated. The
interviews were all voice recorded to allow the researcher to transcribe and better
analyse the results of the in-depth interview (Kvale, 1996; Hannabuss, 1996; Maxwell,
2005). The use of telephone or faxed questionnaires and large postal surveys used in
quantitative research could not have adequately substituted for the inputs which the
personal interviews generated using a structured interview with open questions.
The validity, correctness or credibility of an in-depth interview research, consists of
strategies to identify and rule out the threats that you might be wrong (Maxwell, 2005).
A sample of seven organisations is that enough? Are the right experts being
interviewed? A wide variety of experts were chosen from different disciplines within
Halal, covering food, Islamic banking, economy and standards. Second, the people
chosen were leaders in their eld, which was supported by academic and professional
publications. Third, the people chosen were willing to share, based on their reputation in
the Halal industry and Halal research. Researcher bias is an important threat (Maxwell,
2005; Sekaran, 2007), which is caused by lack of trust and rapport, or when the responses
are misinterpreted or distorted, or when the interviewer unintentionally encourages or
discourages certain responses. To address lack of trust and rapport, six out of nine
persons interviewed were people with whomthe researcher has an existing relationship
with, meaning that the researcher has met several times before at different occasions.
Of the other three persons interviewed, one person was from the same university where
the researcher is conducting his PhDresearch. Therefore, it can be assumed that there is
a natural level of trust and rapport. Before the interview was conducted, a background
search, consisting of existing publications of the person, were gathered and studied to
ensure an effective communication during the interview. A structured interview was
chosen to ensure that the interviewer was asking the right-open questions and minimise
possible suggested responses by the interviewer. Another threat is that not all data
provided during the interviewis captured and therefore not incorporated in the analysis.
To avoid this threat, the researcher voice recorded all in-depth interviews and
transcribed the words said, allowing the researcher to review and analyse the entire
interview at a later stage of the research.
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3. Results
3.1 What is Halal from a logistics, supply chain management point of view?
Wholesomeness (toyyib) is an important factor and prerequisite of Halal. From the
interviews conducted it clearly follows, that Halal for this research in Halal food supply
chains is clearly dened by the Quran and Sunnah. However, also recognised by
Mr Darhim Hashim (IHI Alliance Ltd), the Sunnah has different interpretation in the
different schools of thought. Another aspect is that the Quran and Sunnah only
provide broad principles according Dr Mohamad Akram Laldin (International Shariah
Research Academy for Islamic Finance), which need to be operationalised. According
to Dr Mohamad Akram Laldin, the Quranic verses, clearly state that pork and liquor
are forbidden from the Islamic point of view, whereas the other area the Quran is silent
about, which is left to the interpretation of the different scholars. However, if there is
contamination between Halal and Haram, the Halal is contaminated and become
non-Halal. Therefore, a Halal supply chain should rst of all guarantee that there is no
contamination between Halal and Haram. As also argued by all persons interviewed,
Halal matters at the point of consumption and therefore the whole supply chain needs
to be addressed in order to protect the integrity of a Halal product.
3.2 Which Islamic sources are essential for Halal supply chain management?
As argued by Dr Ghaffarullah (Universiti Teknologi MARA) Legal Maxims, the general
rules of Fiqh, can provide important principles for Halal logistics and a Halal supply
chain management system. According to Laldin (2006), there are ve major maxims:
(1) matters are determined according to intention;
(2) hardship begets facility;
(3) harm should not be inicted nor reciprocated;
(4) what is certain cannot be removed by doubt; and
(5) custom is arbitrary.
The intention of a Halal supply chain, to protect the Halal integrity, is already an
important justication for a Halal supply chain management system. Important in the
design is also not to create unnecessary burden for the consumer and the industry.
Second, it is important to address existing customs (like Samak) in the different
countries that might need to be incorporated in Halal supply chains. Third, there is a
saying of the Prophet (Al-Qaradawi, 2007, p. 33):
The Halal is clear and the Haram is clear. Between the two there are doubtful matters
concerning which people do not know whether they are Halal or Haram. One who avoids
them in order to safeguard his religion and his honor is safe, [. . .]
According to most of the people interviewed, this principle is one of the most important
principles for Halal logistics and Halal supply chains, to avoid a Halal product to move
into a doubtful state. Fourth, Dr Nor Azman (Halal Industry Development Corporation)
referred to an example where the Prophet cursed not only the one who drinks
intoxicating drinks but also the one who produces them, the one who serves them, the one
to whom they are served, the one to whom the price of them is paid, etc. (Al-Qaradawi,
2007, pp. 28, 29). Also Dr Suhaimi Ab. Rahman shared that what leads to a Haramdeed
is also Haram. From this it could be argued by people that sharing in transport
Halal in
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and storage with Haram is something, which should be avoided. Fifth, according to
Dr Mohamad Akram Laldin and Mr Darhim Hashim, mixing Halal and Haram, the
Haramwill prevail. This means, that the Halal supply chain should guarantee that there
is no contact with Haram. Sixth, Dr Suhaimi Ab. Rahman (Universiti Putra Malaysia)
furthermore state the analogy of the touching of the dog (where you need to wash your
hands seven times if you hand or the dog hair is wet), could be used, to differentiate
between dry and wet products in Halal supply chains.
3.3 Which guidelines and principles are essential for the Halal integrity of Halal supply
chains?
According to Mr Darhim Hashim, it is fundamental to maintain the integrity of the
product along the supply chain and keep Haram out. Recurring themes with all
in-depth interviews, is the cross-contamination of Halal in direct contact with Haram,
the risk of Halal becoming non-Halal and the importance of the perception of the
Muslim consumer. This is shown in Figure 2.
Products that are bydenitionHaramare (Regensteinet al., 2003; Kamali, 2010): esh
of swine, blood, carrion and intoxicants. Direct contact (cross-contamination) of Halal
with these products will make the Halal product non-Halal, and therefore not t for
consumption by Muslims. Risk is addressing the possibility that something Halal moves
in a state of doubt. One of the main functions of a Halal supply chain management is to
avoid that the Halal product moves into that state. An important determinant for risk is
the product characteristics:
.
wet products have a higher risk as compared to dry products; and
.
bulk products have a higher risk than unitised products.
As argued by all people interviewed, the perception of the Muslim is different,
depending on the Islamic school of thought, local Fatwas (religious rulings) and local
customs. As mentioned during one of the interviews, Brunei requires even full
segregation between stunned and non-stunned Halal slaughtered meat.
Figure 2.
Foundation of Halal
supply chain management
Perception
Risk
Direct contact with Haram
Best practice
Precaution
Cross-contamination
Source: Original
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It was evident that the factor perception is very important to be taken into
consideration for the design of a Halal supply chain and organising the transportation,
storage and handling in order to meet these requirements of consumer markets. During
the in-depth interviews, the various guidelines and principles were suggested to protect
the Halal product along the supply chain. Table II summarises the results of the
in-depth interviews.
Dependent
variable Islamic sources Independent variable Guidelines and principles
1. Direct contact
with Haram
1. When the Halal and Haram
are mixed up, the Haram
prevails (legal maxim of
Fiqh) (Kamali, 2008)
Haram product Primary packaging
(of Halal materials and not
harmful) and tertiary
packaging
2. Of that which intoxicates in
a large amount, as small
amount is also haram
(Hussaini, 1993, p. 70)
2. Risk The Halal is clear and the
Haram is clear. Between the
two there are doubtful
matters which should be
avoided
(Al-Qaradawi, 2007, p. 33)
Product
characteristics: dry vs
wet products, bulk vs
unitized product
Different load carriers for
Halal;
Physical segregation of
Halal and najs in storage,
transport and handling;
Coding and labelling;
Supplier selection;
traceability; information
sharing; security
3. Perception 1. Custom is arbitrary: practices
have authority and can
specify a general matter or
restrict an unrestricted
matter (Laldin, 2006, p. 148)
Market characteristics:
different schools of
thought and local
Fatwas
Samak (ritual cleansing);
Segregation between
different types of Halal;
Dedicated Halal facilities
2. Whatever is conductive to the
Haram is in itself Haram
(Al-Qaradawi, 2007, pp. 28-29;
Wilson and Liu, 2010, p. 110)
3. Doubtful things are to be
avoided (Al-Qaradawi, 2007,
p. 32)
4. Hardship begets facility:
hardship that surpass the
normal limit and ability to
perform (Laldin, 2006, p. 139)
5. Necessity removes
restrictions (Al-Qaradawi,
2007, p. 37)
6. If a dog licks a plate (or pot),
clean it seven times, of which
one time should be with sand
(or earth) (Al-Qaradawi,
2007, p. 121)
Source: Original
Table II.
The application of Halal
in supply chain
management
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193
4. Conclusion
Although the core fundament of Halal supply chains is to avoid contact between Halal
and Haram, the Muslim consumer requires a higher assurance of his Halal food, which
is based on reducing the risk of contamination and the factor of perception of the
Muslim consumer. Therefore, Halal supply chains can be characterised as robust
supply chains that strive for a lower vulnerability for Halal contamination.
From the in-depth interviews it followed that the product characteristics (bulk or
unitised shipments; ambient or chilled/frozen) have major implication on the design of
Halal food supply chains. From the in-depth interviews it also followed that the
perception of the Muslim consumer is an important parameter for Halal supply chains.
This is a complex matter due to the variety of Islamic cultures, Islamic schools of
thought, local Fatwas and local customs.
For Halal certied companies it is important to look beyond their production and
ingredients, and extend Halal to the entire supply chain in ensuring that their
transportation, storage and handling are in compliance with Shariah and meet the
requirements of their target Muslim market.
Further empirical research is needed to better understand and measure the
perception of the Muslim consumer, as perception is a key success factor in an effective
supply chain management of Halal products. More academic research is also needed in
order to better understand the principles in organising Halal supply chains for different
markets. Are there differences between the supply chain management requirement, for
example, between Muslim and non-Muslim countries? Finally, there is a need for a
Halal supply chain model that is able to describe and optimise Halal supply chains.
This would help the Halal certied food industry to move towards a supply chain
approach to Halal.
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Corresponding author
Marco Tieman can be contacted at: marcotieman@yahoo.com
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