Article title: Halal logistics in Malaysia: A SWOT Analysis

Logistics is described as all activities which facilitates movement and the coordination of
supply and demand in the creation of time and place utility. Logistics management involves a
series of activities, namely, transportation, storage and warehousing, inventory management,
material management, product scheduling and customer service. Adopting Halal into logistics
context, it must be ensured that the products during any logistics activities, such as
transportation or storage, must adhere to Shariah principles. To ensure a complete practice of
Halal logistics, during key stages in logistics and supply chain activities, all Halal products
must be protected from non-Halal products or substances until it arrives at the final destination.
The Halal logistics competencies and know-how are crucial to maintain the integrity of the
Halal products.
The strenght of halal industry had long been recognized and supported by the Malaysian
government, and numerous efforts had been implemented. The support has been widespread
from the origins right until the final consumption including transportation of goods, cargo chain
services, warehousing and related activities refer to law and standard. It can also see in
stimulating the Halal logistics and Halal industry as a whole can be seen through efforts such
as national budget allocation for product development, better Halal certification, promotion,
education and training initiatives and tax exemption. The higher education in Malaysia are also
been given the support to be part and eventually contribute back toward the betterment of Halal
industry.
The weakness lies in the lack of collaboration between parties in logistics activities and
between Halal certification authorities. The transportation process is a challenging procedure
in maintaining Halal logistics integrity. Logistics companies that practiced Halal transportation
can rest assured that all products within their custody are handled according to Shariah
principles. However, due to lack of collaborative efforts between logistics parties, the chances
of breakage and contamination are greater if the other parties are not practicing Halal logistics.
Furthermore, the lack of cooperation between Halal certification authority and Halal logistics
service providers is also an obvious weakness.
The opportunities is viewed at Muslims’ population growth. Muslim population will rise to 2.2
billion in 2030, which 26.4 per cent of the world’s population will be Muslims. The Malaysia
Investment Development Authority estimates that the global Halal food industry is worth until
US$2.1 trillion. The current global retail sales in food product to be worth US$6.4 trillion by
2030. Halal market potential in Europe is valued at US$67 billion. Acceptance on Halal
products are contributed by Muslims and Non-Muslims in European countries because they
too prefers Halal products as it is known to be cleaner, healthier and tastier. Halal traceability
and tracking system can also be considered an opportunity for Halal logistics since the dynamic
efforts by logistics players and Halal product suppliers.
The threats is about no uniformity on Halal in Halal Logistics standards. Without a standard
worldwide Halal certification, it will be difficult to maintain the Halal integrity. The growth of
the industry will be hindered because of the lack of professionals in Malaysia’s logistics
industry. The insufficient supply of talents into the industry because of higher education failure
to provide a qualified logistician. Besides that, the Halal enforcement officers and personnel
lack the “enforcement” and this also acts as a threat to the Halal industry and Halal logistics
services. Halal products or services are not only a concern during final consumption but at
every aspect, including the supply chain. (565 words)
Article title: Can halal certification influence logistics performance?
Halal is in “the realm of business and trade and it is becoming a global symbol for quality
assurance and lifestyle choice”. Halal economy is valued at a staggering US$3.2 trillion, and
is forecast to reach US$ 7.9 trillion by 2019. Various forms of halal business, such as halal
pharmaceuticals, cosmetics, hospitality, agriculture, chemicals and even logistics services.
Focusing on halal logistics services, Malaysia’s Third Industrial Master Plan (IMP3) 2006-
2020 highlighted halal logistics as an emerging sub-sector that could further elevate Malaysia’s
role in the halal business sector towards becoming a world-renowned halal hub. Halal logistics
has emerged because of increasing awareness and demand from both Muslim and non-Muslim
customers for halal products and services, and its efficacy as a business strategy.
Halal certification is a document, logo or trademark issued by an Islamic organisation
certifying that the product or service is in compliance with the Islamic guidelines. International
brands are aggressive and committed in securing halal certification because the opportunities
for halal-certified products or services are immense. The degree of importance halal
certification has on firm performance is undisputed. Aside from halal certification as a mark of
assurance and trust, it does have significant impact on a firm’s performance. Logistics service
providers that offer halal-certified logistics services will experience positive changes in their
business performance.
Logistics performance as the “ability to deliver goods and services in the precise quantity and
at the precise times as required by the customers”. Logistics performance is the means of
fulfilling the “7Rs” of logistics management objectives (the right product, right quantity, right
condition, right place, right time, right customers and right costs) and its performance
positively impacts organisational performance. The more responsive (flexible) the firm, like
halal compliance in logistics, the better customer needs are fulfilled. Innovation in logistics,
practicing halal certificate and differentiation in logistics services positively influence logistics
performance.
In halal certification–logistics performance relationship, there are certification such as the ISO
9000, ISO 14000, HACCP and GMP, as these certifications have been proven to influence firm
performance. Halal certification approach is consistent with the best practices of other types of
food quality assurance standards and engrained in the doctrines of safety, hygiene and
wholesomeness. Halal certification also could implicate consumers’ purchase decisions;
provide a sense of assurance, and aid in promoting international business, hence signifying that
having certified product or service could alter a firm’s output, promotes confidence, trust and
satisfaction. Halal certification and logo are the important elements in gaining global market
shares and retaining customers, could instigate the growth of Islamic food marketing and
tourism industry, leading to greater business opportunities for halal-certified firms.
The halal industry, including halal logistics, or halal certification–logistics performance
relationship thrived because of strong support and commitment from governments plays factor
in a critical role like assisting logistics service providers to incorporate halal into their logistics
operations. Government intervention and support indirectly in financial, training, project and
regulatory support influence logistics performance. The government has a strong moderating
link between usability of radio frequency identification (RIFD) and adoption of RIFD. All this
has shown that government support can be a moderator of halal certification–logistics
performance. (524 words)