Halal Supply Chain Vs Halal Logistic

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Halal Logistics Versus Halal Supply Chain: A Preliminary Insight
Chapter · January 2016

DOI: 10.1007/978-981-10-1452-9_52
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Halal Logistics vs Halal Supply Chain: A Preliminary Insight
Harlina Suzana Jaafar1*, Nasruddin Faisol2, Fadilah Abdul Rahman3, Azlina Muhammad4
1,2,3,4
Malaysia Institute of Transport, Universiti Teknologi MARA,
40450Shah Alam,Selangor, Malaysia
harlinas@salam.uitm.edu.my
2
Faculty of Architecture, Planning and Surveying, Universiti Teknologi MARA
40450 Shah Alam, Selangor, Malaysia
nasru793@salam.uitm.edu.my
3
Academy of Contemporary of Islamic Studies, Universiti Teknologi MARA,
dilah091@salam.uitm.edu.my
4
Faculty of Business Management, Universiti Teknologi MARA,
azlina59@salam.uitm.edu.my
*
Corresponding Author
Abstract: The concept of halal logistics or halal supply chain has increasingly received attention following the
realisation of tremendous increasing number of Muslim population. Generally, consumers understand the
benefits of consuming halal products. But, consumers might not aware that the process of producing halal
products does not only encompass manufacturing processes, but also involves all activities throughout the
supply chain including handling, storing, warehousing and transporting activties. As production is becoming
more globalised, the supply chain is getting more complex. The complex and lengthy supply chain may expose
the halal products to higher risk of contamination. Thus, the objective of this paper is to provide preliminary
insights on the concepts of halal logistics and halal supply chain through an understanding of logistics and
supply chain processes. This conceptual paper is developed based on a brief review of shari’ah, logistics and
supply chain. It also elaborates the development of the concepts and its importance. Having considered that the
concept of halal logistics is fairly new to the academia and industry practitioners, this study contributes to the
body of knowledge through the concept development of halal logistics and halal supply chain as well as its
implementation that could provides guidelines to the industry practitioners.
Keywords: Contamination, Halal logistics, Logistics providers, Shariah, Supply Chain
1. Introduction
The concept of halal has increasingly received attention in various perspectives. From
business perspective, it has been seen as a potential business strategy that would attract wider market
comprising both Muslim and non-Muslim buying the halal products (Othman et al, 2009; Nik
Muhammad et al, 2009; Zakaria, 2008). On a religious standpoint, the demand is created based on the
religious belief that Muslims should consume only halal products. The current literature shows that
the expansion of halal concept for a product has now spreaded to include the movement of the halal
products along the supply chain process (Omar and Jaafar, 2011; Bahruddin et al, 2011; Omar et al,
2012; Jaafar et al, 2011). This is because the process of producing halal products does not only
encompasses the production processes, but also involves all activities throughout the supply chain
including source of supply, handling, storage, warehousing, manufacturing and transportation
activities. This is because throughout these supply chain activities, various circumtances could
expose the halal product into risks of contamination with haram and hazardous products that would
affect the status of a halal product. As production is getting more globalised, the supply chain is
getting more lengthy and complex leading to higher risks of getting contaminated. This scenario has
led to the introduction to a fairly new concept of halal logistics or halal supply chain.
Despite its importance, studies focusing on halal logistics and halal supply chain are lacking.
In a review of halal studies, Zulfakar et al (2012) highlight that most studies are focusing on halal
product, halal consumerism, halal market, halal product traceability, halal certification. Other studies
include halal as an innovation (Jaafar et al, 2011; Mohd Sirajuddin et al, 2013). Being a new concept
To cite this paper: Harlina Suzana Jaafar, Nasruddin Faisol, Fadilah Abdul Rahman, Azlina Muhammad (2017), Halal Logistics
1 Versus Halal Supply Chain: A Preliminary Insight,in Contemporary Issues and Development in the Global Halal Industry, in
Siti Khadijah Ab. Manan, Fadilah Abd Rahman and Mardhiyyah Sahri (Eds.), Springer Singapore, pp. 579-588, ISBN 978-981-
10-152-9.
in the discipline, it is vital that the concept should be comprehensively elaborated to ensure
understanding and standardisation of implementation. This paper, therefore intends to highlight the
rationale of halal logistics and halal supply chain practice and provide an insight on the development
of halal logistics and halal supply chain concepts as well as explaining how these concepts
differentiates with one another. It is hoped that these explanations could guide the researchers,
consumers and industry players to use the terms accordingly.
2. Halal Supply Chain : A Review of the Literature
Halal issues have gained public attention since the late 2000s in the area of halal
consumerism and halal market. The issues of trust (Bonne and Verbeke, 2007), quality (Bonne and
Verbeke, 2008), traceability ( Norman et al, 2008), certification (Lam and M Alhashmi, 2008), halal
market (Othman et al, 2009; Nik Muhammad et al, 2009; Zakaria, 2008) and consumer behaviour
(Bonne et al, 2007; Lada et al, 2009) have become the focus of attention. Halal logistics and halal
supply chain follow several years later exploring on the application of halal in the supply chain
management (Tiemen, 2011; Omar and Jaafar, 2011; Bahruddin et al, 2011 and Omar et al, 2012) and
halal logistics as innovation (Jaafar et al, 2011; Mohd Sirajuddin et al, 2013). In a review of 105
articles comprising journals, conference papers, students‟ thesis, chapter in a book, trade magazines
and special report, Zulfakar et al (2012) found that halal industry market theme dominated the
dimension of halal food supply chain with 35 published papers and halal logistics/supply chain came
second with 12 publications, in which only 3 comprise of academic papers (journal and conference
proceedings).
In order to understand the term halal supply chain and halal logistics, the elaboration on how
the concept is originated is important.
2.1 Understanding the Halal Concept
According to Al-Qaradawi (2001), halal is an Arabic term, Al-Halal (The lawful), which
means „permitted, with respect to which no restriction exists, and the doing of which the Law-Giver,
Allah swt has allowed‟. On the other hand, Haram or Al-Haram (The prohibited) refers to that the
„Law-Giver has absolutely prohibited. Anyone who commits is liable to incur the punishment in the
Hereafter as well as a legal punishment in this world‟ Between halal and haram is Al-Makruh (The
detestable) denotes „that which is disapproved by the Law-Giver but not very strongly. The makruh is
less in degree than the haram, and the one who commits will not be punished as He punishes for a
haram act, except when he does it in excess and in a manner, which leads an individual toward what
is haram‟. These are the guidelines given by Allah in the Qur‟an and explained by the doings of
Prophet Muhammad, the final messenger of Allah swt (PBUH) (Sunnah) to the Muslims covering the
the lawful and the prohibited in the private life as a Muslim, marriage and family life and the daily life
of a Muslim. This reflects that no one has an authority to declare halal and haram except Allah swt
(Al-Qaradawi, 2001). The only criterion for defining the Halal or the Haram is the Qur‟anic
injuctions revealed from Allah, the Creator, Who knows what benefits man as well as the
authenticated Prophetic Sunnah, as it is based on a Divine revelation. Halal and haram are part of the
total legal system of Islam, its Shari’ah, a system whose primary objective is the good for mankind.
The Islamic Shari’ah removes from the human being, harmful, burdensome customs and
superstitions, aiming to simplify and ease the business of day to day living. It‟s principles are meant
to protect man from evil and and for him to benefit all aspects of his life.
In terms of food and drink, the basic principle is that all foods are halal except those which
are prohibited in the Qur‟an and the Sunnah. The food that are not permissible are namely swine or
pork and its by-products, carrion or improper slaughtered animals with fangs such as lions, dogs,
wolves and tigers, birds of prey such as falcons, eagles or owls, snakes, domesticated donkeys, mules
and elephants, pests such as rats and scorpions, insects excluding locusts, blood and blood by-
products, alcohol and intoxicants of all kinds, all poisonous plants and poisonous aquatic (unless the
poison is removed before consumption), and food, which is contaminated with any of the products
10-152-9.
mentioned above (Al-Qaradawi, 2001). These food are forbidden to the Muslims because Islamic
dietary laws strictly adhere to quality, cleanliness and safety of the food they consume. Generally, the
specific reasons of Haram in Islam are to:
 Preserve the purity of the religion
 Safeguard the Islamic mentality
 Preserve life
 Safeguard property
 Safeguard future generations
 Maintain self-respect and integrity
Mohd Sirajuddin et al (2013) highlight that the term halalan tayyiban provides more holistic
and comprehensive explanation of the halal concept, in which halal means permissible and lawful
while tayyib means good. As explained in the verse Al-Maidah (88):
“And eat of what Allah has provided for you [which is] lawful and good. And fear Allah in
whom you are believers”
Although the term tayyib has not been widely used, the combination of the two phrased
halalan tayyiban, which means “permitted and good or wholesome” (Regenstein et al, 2003) indicates
the elements of hygiene, safety and quality (Lokman 2001). Sazelin and Rizwan Ahmad (2011)
emphasise that good quality food bounded by Islam is strongly related in developing good quality of
human capital. Several profound Islamic scholars such as al-Qurtubi, al-Sayuti, Ibn. „Asyur, and Ibn.
Kathir, suggest that the concept of tayyib and halal should be bind together (Sazelin and Rizwan
Ahmad, 2011) in order to gain a holistic benefit.
2.2 The Logistics and Supply Chain Literature
It is widely agreed that logistics plays a key role in the economy. Logistics add value by
creating utility, which represents the value or usefulness of the good or service when it is delivered on
time, in a proper form, at the right place and at the right customer. Consequently, logistics fulfils
form utility, possession utility, time utility and place utility and thus affecting customer satisfaction
when the product is available to the customer when and where it is needed. However, logistics is one
of the major expenditures for businesses, thereby affecting and being affected by other economic
activities. Therefore, from an organisation viewpoint, effective logistics management has been
recognised as a key opportunity to improve both the profitability and competitive performance of
firms (Lambert et al, 1998).
2.2.1 Logistics Management
Generally logistics refers to the inbound and outbound flow and storage of goods, services,
and information within and between organisations (Gundlach et al, 2006). The Council of Supply
Chain Management Professionals (CSCMP), which is the pre-eminent professional organisations for
academics and practitioners in the logistics field, formed in 1963 defined logistics management as
“that part of supply chain management that plans, implement and controls the efficient, effective
forward and reverse flow and storage of goods, services and related information between the point of
origin and the point of consumption in order to meet customers’ requirements” (see www.cscmp.org).
The key behind effectively managing logistics processes is emphasising on the total cost concept.
The goal of an organisation should be to reduce the total cost of logistics activities, rather than
focusing on each activity in isolation. Lambert et al (1998) emphasise that many activities
encompassed under the logistics umbrella illustrates that logistics is dependent upon natural resources,
10-152-9.
human, financial and information resources for inputs. Suppliers provide raw materials, which
logistics manages in the form of raw materials, in-process inventory, and finished goods.
Management actions provide the framework for logistics activities through the process of planning,
implementation and control. The outputs of the logistics system are competitive advantage, time and
place utility, efficient movement to the customer, and providing a logistics service mix that becomes a
proprietary asset of the organisations. These outputs are made possible by the effective and efficient
performance of the logistics activities shown in Figure 1.
Figure 1. Components of Logistics Management
Source: Lambert, D.M., Stock, J.R. and Ellram, L.M. (1998) Fundamentals of Logistics Management,
McGraw-Hill International Editions, Singapore.
Lambert et al (1998) also listed 14 major logistics activities namely customer service, demand
forecasting/planning, inventory management, logistics communications material handling, order
processing, packaging, parts and service support, plant and warehouse site selection, procurement,
return goods handling, reverse logistics, traffic and transportation, and warehousing and storage.
Although companies can conduct these logistics activities in-house, but majority of companies
outsource logistics activities to third party logistics providers (3PL) to allow them to focus on their
core business activities.
2.2.2 Supply Chain Management
Supply chain management, on the other hand is conceptualised as a network of companies

ranging from suppliers to end users. These companies have the intention of integrating
supply/demand via coordinated company efforts. CSCMP defines supply chain management as
“encompasses the planning and management of all activities involved in sourcing and procurement,
conversion and logistics management activities. Importantly, it also includes coordination, and
10-152-9.
collaboration with channel partners, which can be suppliers, intermediaries, third party service
providers, and customers. In essence, supply chain management integrates supply and demand
management within and across companies” (see cscmp.org). Wisner et al (2011) view a supply chain
as the flow of products and services from raw materials manufacturers, to the component and
intermediate manufacturers, to the final product manufacturers, to the wholesalers and distributors and
then to the retailers. A supply chain is connected by transportation and storage activities, and
integrated through information, planning, and key process sharing activities.
Wisner et al (2011) highlight that the supply chain management is based on four foundations
namely; (1) supply management, (2) operations management, (3) logistics, and (4) integration. The
definitions of logistics and supply chain above apparently show that supply chain management
embraces a wider area, in which logistics forms one of its four components. Figure 1 indicates that
the input into logistics forms the first component of supply chain, i.e. supply management. The
operations management are the detail manufacturing processes of the in-process inventory while the
management will integrate all these functions across the entities in the entire supply chain.
3. Methodology
Halal logistics or halal supply chain is a fairly new concept in logistics and supply chain. In
the mid 2000s when the halal-related concept was first introduced, most articles on halal logistics and
halal supply chain were published in trade journal rather than the academic journals. Most trade
journal discusses this concept from trade and business perspectives. Omar et al (2013) and Bahruddin
et al (2011) attempt to review the concept of halal supply chain by comparing the similarities and
differences between the halal supply chain and the conventional supply chain in the definition,
objectives, cross contamination occurence and segregation.This conceptual paper attempts to explain
the development of halal logistics and halal supply chain concepts in the perspectives of logistics and
supply chain through the integration of both halal and logistics/supply chain concepts. Thus, it
reviews the concept of halal followed by definitions and elaboration of the elements and foundation of
both logistics and supply chain as well as describes how both concepts are distinguished. Then, the
integration of halal concepts into the concept of logistics and supply chain will be highlighted in
demonstrating the emergence of halal logistics and halal supply chain concepts.
4. The Importance of Halal Logistics and Halal Supply Chain and Its Development
Following an understanding of both halal, logistics and supply chain concepts, the discussion
below focuses on the development of halal logistics and halal supply chain concepts and the
importance of its implementation.
Halal and haram, which form part of the total legal system of Islam, its Shari’ah was
revelead in the Qur‟an 1400 years ago. The Qur‟an describes itself as a book of guidance, which
offers detailed explanations of specific historical events, and it often emphasises the moral
significance of an event over its narrative sequence. The Qur‟an is also used along with the hadith to
interpret Shari‟ah law. On the other hand, logistics and supply chain disciplines have only been
introduced in the beginning of 1980s and beginning 1990s respectively. Therefore, Qur‟an, being the
book of guidance to the Muslims and the society should be the source of reference in the supply chain
implementation as Islam is a way of life rather than merely a religion. Consequently, benefits as
underlined by the objectives of the Islamic law (maqasid sharia‟ah) could be gained when the
contamination with the haram and hazardous products are taken care throughout the supply chain
process that covers the sourcing, handling, production, transportation and storage through the practice
of segregation and dedication.
In the halal food industry, the handling of food along the logistics and supply chain process is
deemed crucial. This is because the halalan tayyiban food production will be meaningless if the
halalness and cleanliness of the food is not taken care throughout the process of delivery from the
source of supply to the final consumers (refer Figure 1). Therefore, the status of a halalan tayyiban
10-152-9.
product could only be achieved when all possible contamination caused by haram and hazardous
products could be avoided throughout its supply chain process, and not only the production.
Therefore, a halal process should be viewed from a supply chain perspective because a halal product
could only be produced when entire activities throughout the supply chain process is based on
Islamic practice rather than only focusing on the production.
The Muslims are ordered to consume halal food or halal product. Thus, to ensure the
consumers get a halal status product, halal product should be segregated from the haram and
hazardous products. This is because a halal produced food could become haram when it is
contaminated with haram and could become hazardous to the consumers when it is contaminated with
hazardous products. When the products becomes hazardous, it means the tayyiban (cleanliness) were
not preserved. Another option to preserve the halalan and tayyiban aspects of the products, firms
could also provide dedicated facilities only for halal products throughout the supply chain processes.
These practices seem contradict with the current logistics practices where third party logistics service
providers (3PL) used to mix the halal and haram products because the goal of the 3PL are to reduce
the total cost of logistics activities such as inventory carrying costs, lot quantity costs, order
processing and information costs, transportation costs and warehousing costs. The food/products are
normally segregated according to the type of products such as wet and dry products and specific
temperature controlled products. With the introduction of the special requirements for segregation or
dedication of halal product delivery, the costs of operations may increase if the delivery is not well
planned. However, if the costs is to be viewed as investment for long term profits, and proper
management of segregation is to be done, halal logistics and halal supply chain could be implemented
successfully, having considered the increasing demand for halal products throughout the world.
The impetus of the halal industry development began when Muslims consumers demand for
halal food to be widely available in the market as the non-halal food has started dominated the market
especially when they were produced in the form of by products that is hard to detect by the final
consumers. For example, the by products of pigs produced in the forms of hides and skins for leather
goods, gelatin for drug capsules, rennel for cheese making, hair for artist brushes, stearin for making
chewing gum and candies, insulin and ingredients for other medicines, fatty acids and glycerine for
matches, bone china, violin strings and etc. In terms of food, Islam considers food and drinks as
Daruriyat, which means essential or elements on those which the lives of human being depend, and
without which the existence of an individual or society becomes impossible. This is to ensure better
healthy life and the good food that they eat would also be able to portray good atttudes and behaviours
through the good food that they consume. This is in line with a popular quotes „we are what we eat’
indicating that every 35 days, human skin replaces itself and the body makes new cells from the food
that they eat. Thus, what human eats literally becomes them (Colquhaun and Bosch, 2011). They
highlight that despite the investment made on research to produce medical inventions, people continue
to suffer from a raft of chronic ills and every day maladies. Thus, they strongly suggest that people
should be meticulous of what they eat. Having considered that logistics is a service, therefore, the
demand for logistics service is greatly depend on the demand for the halal goods. Consequently,
increasing demand for halal food will directly drive the demand for halal logistics and halal supply
chain practice.
As defined above, it can be concluded that halal logistics is also one of the four components
of halal supply chain. Since the handling of halal products are carried out throughout the logistics
activities, higher degree of contamination may occur throughout the logistics service delivery
processes. Halal supply management, halal operations management and halal integration would lead
to a successful halal supply chain when firms deal only with committed halal suppliers and halal
manufacturers as well as integrates with only halal committed practiced clients.
5. Conclusion
This paper provides preliminary insights on the development of halal logistics and halal
supply chain concept as well as its implementations. Both concepts were also distinguished from
each other through the understanding of the terms logistics and supply chain. It becomes a derived
10-152-9.
demand as the demand for halal logistics and halal supply chain services are created through the
demand for halal products. This clarification should therefore becomes guidelines to the academics
and practitioners to use the terms in the right context.
6. Acknowledgement
The authors would like to extend their appreciation to the Ministry of Education, Malaysia
Research Centre for Logistics and Supply Chain (a Centre under the Malaysia Institute of
Transport) for the provision of the research grants.
7. References
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10-152-9.
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Halal Logistics Versus Halal Supply Chain: A Preliminary Insight

Chapter · January 2016

Harlina Suzana Jaafar Nasruddin Faisol

SEE PROFILE SEE PROFILE

Fadilah Abd Rahman Azlina Muhammad

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Pre-Implantation Genetic Diagnosis View project

Logistics Performance Index (LPI) View project

The user has requested enhancement of the downloaded file.

Keywords: Contamination, Halal logistics, Logistics providers, Shariah, Supply Chain

2. Halal Supply Chain : A Review of the Literature

2.1 Understanding the Halal Concept

2.2 The Logistics and Supply Chain Literature

2.2.1 Logistics Management

Figure 1. Components of Logistics Management

2.2.2 Supply Chain Management

Supply chain management, on the other hand is conceptualised as a network of companies

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