Journal of Islamic Marketing

Halal risk management: combining robustness and resilience

Marco Tieman,
Article information:
To cite this document:
Marco Tieman, "Halal risk management: combining robustness and resilience", Journal of Islamic Marketing, https://
doi.org/10.1108/JIMA-06-2015-0041
Permanent link to this document:
https://doi.org/10.1108/JIMA-06-2015-0041
Downloaded on: 01 August 2017, At: 22:42 (PT)
References: this document contains references to 0 other documents.
To copy this document: permissions@emeraldinsight.com
The fulltext of this document has been downloaded 8 times since 2017*
Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

Access to this document was granted through an Emerald subscription provided by emerald-srm:401304 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service
information about how to choose which publication to write for and submission guidelines are available for all. Please
visit www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of
more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online
products and additional customer resources and services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication
Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation.

*Related content and download information correct at time of download.

 Halal risk management: combining robustness and resilience

1. Introduction

The world in which corporations are managed is very different now from twenty
years ago. The world today is freer and smaller; a world of fear; a world of
information; individuals are empowered; Non-Governmental Organisations are
empowered; Governments remain powerful, whilst corporation power is waning
(Griffin, 2008). A series of high profile halal issues and scandals in recent years
with top brands have shaken public confidence in the ability of manufacturers
and governments to assure the halal integrity of halal certified products. Today a
singe halal issue can easily balloon into a major crisis for brands on a global
scale. For example, in Malaysia in 2014 the Health Ministry announced that it
Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

detected pig DNA in samples taken from Cadbury’s dairy milk hazelnut and dairy
milk roast almond chocolates already out in the market, sparking uproar among
Muslim groups in Malaysia and other countries. However, the halal certification
body of Malaysia JAKIM (in charge of all halal matters) announced that an
analysis by the Chemistry Department of samples of the two products taken
directly from Cadbury’s factory showed no traces of porcine contamination and
declared the products halal (Malaymailonline, 2014). But unfortunately the
image damage (Smaiziene and Jucevicius, 2009) was already done, affecting the
sales of Cadbury in Malaysia and other Muslim markets. Corporate reputation is
an evident valuable intangible asset, which is seldom noticed until they are
threatened (Fombrun and Van Riel, 1997). Reputation creation, enhancement,
and protection (Gatzert and Schmidt, 2015) on halal are therefore critical to the
success in Muslim markets (Smaiziene and Jucevicius, 2009; Tieman et al., 2012).

Although there is a wide diversity in awareness and adoption of the halal

concept (Thomson Reuters, 2014), there seems to be an increasing level of halal
awareness among Muslim consumers (Yunus et al., 2014; Ahmad et al., 2013).
Halal issues in the supply chain, whether intentional or unintentional, can lead to
a complete breakdown in consumer trust in a brand and corporate reputation
(Saunokonoko, 2014; Tieman et al., 2012). According to Wilson and Liu (2011),
halal-conscious consumers are risk averse, which drives discerning and high-
involvement behavioural traits. Therefore it can be argued that it is important
for both the Muslim consumer as well as the brand owner to better protect the
halal integrity along the supply chain. Halal products, similar to kosher, organic,
GMO-free, are credence quality attributed products, in which the characteristics
of the product cannot be evaluated or ascertained by the individual customer
(Verbeke et al., 2013). As a result, the halal integrity risk management of
products is essential in the trust of halal certified brands (Ali et al., 2014).

Halal integrity refers to the condition of the product being unquestionably halal.
When some halal integrity issues can be traced back to issues in slaughtering,
manufacturing or processing, and packaging, a supply chain perspective
highlights the halal integrity problems that can arise at the transfer in the system
from improper storage, handling and distribution of the product. Managing halal
integrity involves adopting proactive and reactive strategies to minimise the
 likelihood of delivery a compromised halal product and to avoid costly recalls,
crisis management and business recovery.

Halal (supply chain) security refers to the prevention of contamination and

doubt in halal products. Halal security problems can result from the actions of
parties in each step of the supply chain from source, where the product is halal
certified, to point of consumer purchase, where the final consumer buys the
product. Contamination or doubt can be caused by (i) cross contamination
(breakage of packaging or improper packaging); (ii) risk of contamination
(failure of physical segregation between halal and non-halal and lack of
identification of halal cargo in logistics); and (iii) misalignment with the
perception of the Muslim consumer (based on the Islamic school of thought, local
fatwas and local customs of the destination market) (Tieman, 2011). Halal
supply chain security should be treated as an element of core competence for a
Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

competitive advantage of a brand (Lammers et al., 2009).

Halal security measures are put in place to protect the halal supply chain against
risks, including intentional events. These security measures should defend
against such risks and may prevent (or minimised the negative impact of) these
risks from occurring, hereby increasing halal supply chain robustness (Tieman et
al., 2012). A supply chain is robust if it is capable of providing sustainable value
creation under all plausible future scenarios (Klibi et al., 2010). Robustness is an
important factor for the competitiveness of halal supply chains and corporate
reputation. In order to work with halal supply chain robustness in practice, it is
useful however to come to degrees of halal supply chain vulnerabilities, where
more extensive risk management is required (Tieman et al., 2012). As suggested
by Vlajic et al. (2010), a robustness index can be useful for measuring halal
supply chain robustness.

The focus of this conceptual paper is on security problems that compromise the
halal integrity, resulting in the delivery of a halal product which halal integrity is
compromised. This paper puts forward research propositions on the intensity of
risk management and discusses risk management control strategies.

2. Sources of halal supply chain management risks

Contemporary supply chain strategies have increased the complexity and

vulnerability of halal supply chains, such as the globalisation of supply chains,
reduction of supplier base, centralized production, outsourcing and centralised
distribution (Jüttner, 2005). Securing the supply chain takes a full understanding
of the chain and where you are positioned to view that chain (Arway, 2013).

According to a recent literature review on halal supply chain management by

Talib et al. (2015), government support, transportation planning, information
technology, human resource management, collaborative relationship, halal
certification and halal traceability are the critical success factors for the halal
supply chain.
 Factors that affect halal supply chain vulnerability are product characteristics
and market requirements (Tieman, 2011; Tieman et al., 2012). According to
these authors, bulk products are more vulnerable than unitised products and
cool chains are more vulnerable than ambient chains. Muslim markets require
halal assurance to address cross contamination, risk of contamination, and
perception of the Muslim consumer; whereas for non-Muslim markets halal
assurance needs to address cross contamination and risk of contamination only.
In practice this means a more stringent physical segregation and additional
requirements based on religious schools of thought, local fatwas and local
customs (like ritual cleansing) for Muslim markets. The halal supply chain
performance is a function of its supply chain business processes; logistics
control; supply chain resources; and supply network structure (Tieman et al.,
2012).
Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

Halal control activities in supply chain business processes are in transportation,

warehousing and in terminals (IHI Alliance, 2010; Tieman et al., 2012). For
transportation, physical segregation is critical, where for Muslim countries no
mixing of halal and non-halal in a container/transport is required and for non-
Muslim countries under certain conditions this can be shared as long not mixed
on the same pallet/load carrier. Second, the communication of the halal status is
key in halal transportation. For dedicated halal warehouses (a requirement for
Muslim destination markets), halal control activities are only in receiving (for
example: verification of halal status) and shipping (for example: labelling of
‘halal supply chain’), whereas for non-dedicated halal warehouses, these are in
all warehouse processes in order to ensure effective physical segregation
between halal and non-halal. Any transportation terminals (like a seaport or
airport) requires segregation in line with the earlier transportation and
warehousing requirements. Second, inspection of halal goods should be in a
designated area to avoid any possibilities of cross contamination.

Logistics control addresses the selection and management of supply chain

partners. According to Tieman and Darun (2015), there are three type of supply
chain partners: those that are halal certified (only a few), those that have an
evidence based internal halal system (a larger number in Muslim countries), and
the last group of partners (the majority) that work according to some basic halal
practices. Regardless of they type of supply chain partner it will be essential to
have the halal requirements stated in the contract with your supply chain
partners and incorporated as part of the audit of supply chain partners. This is
not only relevant for suppliers, but also for logistics service providers, co-
packers, and distributors.

Supply chain resources address the organisation structure, education and

training, as well as information and communication technology (ICT). The
organisation requires a well-balanced and professional halal committee to
implement and manage the company’s halal assurance system. It is important to
provide education and training on halal not only to the factory staff but also
other functions in the company, such as purchasing, logistics, sales & marketing,
customer service, etc. Education and training can be extended to the supply
chain partners: suppliers, logistics service providers, distributors, co-packers
 and retailers, etc. ICT is critical in ensure an effective communication of the ‘halal
supply chain’ code (IHI Alliance, 2010) on freight documents, cargo labels and in
the ICT systems in communication with supply chain partners, customs,
inspection, etc. According to Dabbene et al. (2014), a traceability system, coupled
with other tools (HACCP, production planning, logistics), may lead to significant
improvements on the performance of the supply chain as a whole.

Halal supply chains foremost benefit by simple supply chain structures as halal
integrity risk of a chain is function of its complexity. Supply chain partners based
in other countries, deal with different halal environments: a Muslim or non-
Muslim country, with a different halal standard and regulatory environment.
These are complexities, which might impact the standard operating procedures
(SOPs) put in place by these supply chain partners. Some of these supply chain
partners might also further outsource physical activities to third parties (like
Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

transportation, storage or co-packing). What are the SOPs with your supply
chain partners: first tier, second tier, third tier, etc?

3. Risk and reputation management practices in the supply chain

Current risk and reputation management practices are passive, limited to

compliance through halal certification of suppliers (right halal certificates) and
manufacturing only, whereas the entire sourcing and distribution function are
not on the radar screen. There is a lack of systematic attention to corporate
reputation (Ott and Theunissen, 2015; Fombrun and Van Riel, 1997). As
companies create their own negative or positive reputations primarily on the
basis of what they express about themselves (Van Riel, 2014), a wrong message
or action has big consequences.

The main GAPs found in halal supply chains today:

Other than in the factory, people in the supply chain (like logistics service
providers, distributors, and retailers) are not trained on halal.

The halal status of cargo is not communicated on freight documents,
cargo labels and in ICT in the supply chain, resulting in possible mixing of
halal and non-halal products in the supply chain.

The halal status of cargo is not a consolidation requirement in stuffing of
less-than-container load (LCL) sea containers for sea transport,
consolidated trucks for land transport, unit load devices (ULD) or air
cargo pallets for air shipments; resulting in easy mixing of halal and non-
halal products in transportation.

The halal status of cargo is not a storage requirement in warehousing;
resulting in possible mixing of halal and non-halal products in storage.

Halal SOPs are not being defined outside the factory in functions such as
purchasing, marketing and sales, logistics and by its supply chain partners
(logistics service providers, distributors, and retailers).

Halal requirements are not covered in contracts with supply chain
partners, other than suppliers of ingredients and additives. Therefore
 halal is often mixed with non-halal products by the logistics service
provider as well as the distributor.

The service industry, such as logistics service providers and distributors
are not well prepared for halal issue management.

Vertical collaboration within supply chains and horizontal collaboration
with competing supply chains is not being practised, wasting potential
synergy advantages in halal supply chains (Tieman, 2014).

In conclusion, risk and reputation management in sourcing and distribution is

found to have serious gaps, resulting in a deficient halal assurance system.
Companies and supply chain partners are not well prepared for halal issues and
a halal crisis. This exposes brands to high impact integrity violations and
possible reputation damages. Next section explores research proposition to
Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

better organise halal risk management by corporation.

4. Research propositions

Halal risk management should always be conducted, but should be rationalised

to vary according to the needs in order to minimise costs impact and
unnecessary hardship (Al-Qaradawi, 2007; Laldin, 2006). Therefore, the
company should assess differentially risk management depending on the supply
chain scenario. This section will discuss some key propositions regarding
intensity of risk management.

Product characteristics
Traditionally the focus of halal assurance has been foremost on food, based on
the holy Quran (2:168) “Eat of what is on earth, lawful and good …”. This was
confirmed in halal food standards. Only quite recently halal certification has
been extended to cosmetics and pharmaceutical products, for which only a few
countries like Malaysia have developed specialised standards. As these
developments are quite new, it can be expected that halal assurance in cosmetics
and pharmaceutical supply chains might be less sensitive than food.

That is:
P1. Food products require more extensive risk management than
cosmetics and pharmaceutical products.

Research by Tieman and Ghazali (2013) and Tieman et al. (2012) show that
animal based products, which are more sensitive, increase the strategic
importance of relationships with supply chain partners.

That is:
P2. Products that are animal based require more extensive risk
management than products that are non-animal based.

Supply Chain Structure

 Research by Tieman and Ghazali (2013) show that suppliers from non-Muslim
countries require stronger partnerships. According to Ali et al. (2014), there are
higher halal integrity risks with suppliers located in non-Muslim countries.

That is:
P3. Suppliers from non-Muslim countries require more extensive risk
management than suppliers from Muslim countries.

Research by Tieman et al. (2012) shows that supply chains for Muslim countries
require further segregation than non-Muslim countries.

That is:
Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

P4. Logistics service providers and distributors involved in distribution to

Muslim countries require more extensive risk management than for non-
Muslim countries.

Brands
Based on Islamic branding by religion, origin and destination, Alserhan (2010)
distinguished four types of Islamic brands, namely true Islamic brands (Islamic,
produced in an Islamic country, and they target Muslim consumers), traditional
Islamic brands (traditional, produced in an Islamic country, and they target
Muslim consumers), inbound Islamic brands (Islamic, non-Islamic origin, and
they target Muslim consumer), and outbound Islamic brands (Islamic, produced
in an Islamic country, and they not necessarily target Muslim consumers).
Brands associated with non-Muslim origins are more likely to be questioned as
for Muslims branding cannot be separated from faith. This is particular true for
big brands (Lewis, 2003).

That is:
P5. Inbound Islamic brands require more extensive risk management
than true, traditional or outbound Islamic brands.

Based on the intensity of halal risk management required, practical risk

management tools are needed to control risk in the supply chain. Next section
proposes a prevention-mitigation-recovery mechanism.

5. Risk management control

Building a robust halal supply chain should be a strategic initiative that changes
the way halal supply chains are organised and increases the competitive
advantage of brand owners. Lewis (2003) argues that risk control needs to
consider prevention, mitigation and recovery mechanisms. Both proactive and
 reactive strategies are required for effective supply chain risk management,
where robustness has a strong positive effect on performance; and resilience on
customer value, brand and corporate reputation (Wieland and Wallenburg,
2012). Resilience is the ability of a system to return to its original state or move
to a new, more desirable stage after a halal incident (Christopher and Peck,
2004). Therefore, next to robustness, resilience will be important in risk
management mitigation and recovery (with a halal incident). The following
prevention-mitigation-recovery mechanism is proposed.

Prevention
In section 4 it was shown how risks are translated to vulnerabilities. But what
can be done to reduce these vulnerabilities? Prevention or ex-ante controls are
operationalized through the halal supply chain risk prevention cycle (figure 1).
Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

[INSERT HERE FIGURE 1]

The halal supply chain risk prevention cycle consists of four components:

1. Risk vulnerability assessment

A risk vulnerability assessment forces identifying possible halal issues and
thinking in terms of chance and consequences. According to Sheffi and Rice
(2005), a risk vulnerability assessment involves answering three questions:
“What can go wrong? What is the likelihood of that happening? What are the
consequences if it does happen?” They developed a vulnerability framework, a
matrix based on disruption probability (low/high) and consequences
(light/severe). The risk vulnerability assessment is an important basis for a more
robust supply chain design.

2. Supply chain (re)design

Tieman et al. (2012) describe in their research a halal supply chain model to
design halal supply chains. Based on the product characteristics and market
requirements, logistics parameters are defined in logistics control, supply chain
resources, supply chain business processes, supply chain network structure and
performance indicators. Next to a local standard, it is essential to be compliant
with the international halal logistics standards, for example the IHIAS 0100:2010
standard (IHI Alliance, 2010), as supply chains today are global supply chains.

Halal assurance should be embedded by design by putting in place a system of

segregation, based on cross contamination, risk and perception (Tieman, 2011).
According to Tieman et al. (2012) the level of segregation is dependent on its
destination market (Muslim or non-Muslim country). Next to physical
segregation information sharing is essential. One element of information sharing
is sharing of the halal status in the supply chain, namely the international ‘halal
supply chain’ code (IHI Alliance, 2010) on freight documents, cargo and IT
systems. The staff of a company should be educated on halal in order to foster a
halal (risk management) culture.
 Security management with supply chain partners is foremost addressed through
contracts with logistics service providers, co-packers and distributors. These
contracts should have a clear halal clause, which addresses their operations as
well as activities they outsource (such as transportation and warehousing) to be
compliant with certain standard operating procedures (SOPs). These SOPs
amongst others detail the physical segregation requirements, cleaning and
information sharing. Discussions, debate and training of supply chain partners to
develop a shared understanding of the risks faced by the supply chain as a whole
will be critical in order to extend the halal risk management culture into the
supply chain (Faisal et al., 2006). This is particular important as many supply
chains, especially downstream the supply chain, consists of many small medium
enterprises.

There are clear advantages if a supply chain partner is halal certified, in terms of
Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

control, but it is not realistic to expect all supply chain partners to be halal
certified. Evidence supports however that a third party logistics service provider
(3PL) in a Muslim country, that organises all the logistics activities and works
with various contractors: transporters and warehouse operators, will be
particular key in halal supply chain assurance. Certification of this 3PL and its
main distribution centre would be preferred.

Vulnerability is reduced through simplifying the supply chain structure and

establishing halal control activities and assurance activities in the supply chain.
Vulnerability can be avoided through in (parts of) the supply chain by having
dedicated logistics infrastructure, like dedicated halal warehouse and transport,
or through containerisation at a lower level through a halal cargo box.

3. Vertical and horizontal collaboration

According to Tieman (2014), vertical and horizontal collaboration could provide
useful strategies in better controlling halal supply chains and increasing
consumer confidence in halal certified products. Furthermore vertical and
horizontal collaboration provide synergy advantages, important in optimising
halal supply chains. Vertical collaboration, collaboration along a supply chain,
can be achieved through manufacturing from a halal cluster and working with a
halal supply chain orchestrator, providing more effective halal supply chain
assurance, standardisation of halal assets in a supply chain and better supply
chain optimisation. Halal clusters (Tieman, 2015) are used to better organise and
upscale production of halal products. A halal cluster is a spatial clustering of
halal production chains, whereby a significant part of the supply chain is
geographically positioned in a halal cluster, providing shorter transportation
times, optimal use of by-products, increasing capacity of cluster participants and
innovation growth, and stimulate new business formation that support
innovations and expand the halal clusters. Today various halal park initiatives
can be found in Malaysia, Brunei, China, South Korea, UAE and the United
Kingdom (Tieman, 2015; Abdul Rahman et al., 2013; Fisher, 2008). A halal
supply chain orchestrator, a logistics service provider, manages global brand
supply chains / channels according to the specification of the destination market
in providing halal assurance throughout the halal network. The halal supply
chain orchestrator makes use of its regional or global network.
 Horizontal collaboration, collaboration between companies in the same industry,
can be facilitated through direct collaboration between similar companies or
through and intermediary (logistics service provider or trader), allowing for
better sharing of information, pooling of resources and bundling of halal
volumes. Horizontal collaboration can be beneficial for manufacturers, retailers
and restaurant chains. Collaboration can be facilitated through either direct
collaboration between different companies or through an intermediary, such as a
logistics service provider or trader. Direct collaboration among different
companies can be achieved through four possible collaboration methods. First,
there could be a dominant industry player, where smaller companies could use
the halal assets or supplier contract (for example a contract with a transporter or
logistics service provider) of the dominant player in the facilitation of the halal
transportation and/or warehousing requirements of the other players. The
Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

dominant player has developed the halal assets or supplier contract based on his
specifications only, whereas the others are using his assets or contract. It is a low
cost method, but might lead to objections from the supplier. A second possibility
is that transportation is facilitated by company A, warehousing facilitated by
company B, and halal cargo boxes by company C. The choice which company will
be used to facilitate which activity is based on the expertise, resources or
volume. A third way is collaboration between companies in the same industry on
project basis. This could be relevant to facilitate for example a joint supply from
one country to Saudi Arabia to meet the food, cosmetics and medical
requirements during the Hajj season. Another application could be a temporary
collaboration between companies in the supply of humanitarian aid during a
crisis situation, which requires an integrated supply chain management
approach to effectively coordinate inter-agency performance, eliminate
redundancies, and maximise efficiencies. A fourth method is an intensive
collaboration on continuous basis between companies where many activities are
done jointly together. This could be applicable when companies are based in a
halal park, in order to facilitate sourcing of halal raw materials (as well as other
products and services) and distribution of halal goods.

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 (like repacking,
customisation to certain Muslim markets). In here various companies can make
use of the expertise of, global network of and ability to consolidate halal flows by
this intermediary for a more effective and efficient management of the various
halal logistics requirements according to the destination market. Consolidation is
one of most important services offered by halal logistics service providers,
where they significantly can add value to the halal industry.

4. Monitoring
Monitoring can be achieved through measuring key performance indicators as
well as to conduct regular supply chain audits from a halal perspective. The halal
performance indicators of Tieman et al. (2012) could be adopted, covering
effectiveness – efficiency – robustness indicators: process quality (brand,
credibility of halal certificate, halal customer service complaints), waste (waste
 in the supply chain, carbon footprint, resources used), supply chain management
costs, utilisation (utilisation of halal storage facilities, utilisation of halal
transport/containers), halal rejects, and availability (halal storage availability,
halal transport/container availability).

A compliance audit will verify the compliance of the supply chain operations
with the requirements of the halal supply chain management principles; and
documented halal supply chain blueprint (has it been implemented properly and
is it still correct?) (Mortimore and Wallace, 2013). This audit can be conducted
internally by a halal compliance officer of the halal committee or by an auditor of
the quality department. Another possibility is that a compliance audit is
conducted externally by a specialised auditing or consulting firm. The advantage
of outsourcing audits to an independent party is that the company will be
exposed to best practices.
Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

Mitigation
According to Li et al. (2015) collaborative relationships, relationships based on
relationship length, supplier’s trust, and shared supply chain risk management
understanding, can influence the mitigation effectiveness of risk information
sharing and risk sharing mechanism. Important principles in mitigation are
control, coherence, and coordination (Reich, 2006; Tomasini and Wassenhove,
2009). It is important to be in full control of the halal supply chain during a halal
incident. Logistics processes and capabilities are key enablers to be in control of
halal incidents (Ponomarov and Holcomb, 2009). Coherence of the supply chain,
holding it together to form a whole, is pivotal during halal incidents that might
put a lot of pressure on the supply chain partners and its staff. Coherence is
enhanced through meaning, direction and understanding during the worst times
of the halal incident (Reich, 2006). Finally, in terms of coordination, three levels
can be differentiated:

Own organisation: this includes the relevant departments that are
possibly involved with a halal incident, such as purchasing, logistics,
manufacturing, sales, quality assurance, etc.

Supply chain: this includes those managed process links (Lambert and
Cooper, 2000) of suppliers that caused and/or are affected by the halal
incident as well as the distribution channel that caused and/or are
affected by the halal incident.

Stakeholders: this includes the relevant halal auditing and certification
bodies, Muslim consumer association, government authorities as well as
the media.

Mitigation or in-process controls are response management to isolate the issue

and minimise the severity of the issue on the integrity of the halal supply chain.
These are operationalised through the halal supply chain risk mitigation cycle
(figure 2). The halal supply chain risk mitigation cycle consists of four
components:
1. Investigative audits are used for halal incidents – to investigate the real
cause in order to take corrective action, or where a previously unknown
 problem has arisen (Mortimore and Wallace, 2013). The investigative
audits are led by the internal halal committee of the brand owner.
2. Cross-functional mitigation and recovery team is formed with the halal
committee, purchasing, manufacturing, logistics and sales/marketing.
This will be fundamental to increase visibility of the flows and allow for
more reliable decision making from managers (Pereira et al., 2014;
Scholten et al., 2014).
3. Implement risk mitigation and communication plan to effectively
respond. Risk mitigation requires a fast response. Arguably, the critical
path to success involves effective process management and collaborative
communications across own organisation, the supply chain and relevant
stakeholders so that every organisation involved is familiar with the plans
and what to expect once implemented (Scholten et al., 2014; VanVactor,
2011).
Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

4. Monitoring: measure performance against agreed objectives.

Measurements and metrics are critical to give continuous feedback to the
cross-functional mitigation team (Scholten et al., 2014; Tomasini and
Wassenhove, 2009). Similar to point 3, this performance dashboard
needs to be built earlier, in order to be effective during a mitigation
exercise.

[INSERT HERE FIGURE 2]

Recovery
The main objective of recovery is to restore the corporate reputation or social
capital of the brand, namely its (1) trust, (2) Islamic values and (2) network
(Nakagawa and Shaw, 2004). The public trust of the halal integrity of product
requires a public reconfirmation from the halal certification body that the
product is halal. This is an important statement, which needs to be
communicated extensively by the brand owner. Islamic values need to be
reemphasised by the brand owner through conducting the necessary rituals in
unison with the religious school of thought, fatwas and local customs (Tieman,
2011), which also need to be communicated extensively by the brand owner. For
example in March 2005, Ikea Retail Malaysia closed its food outlet for about a
week when it was told by the religious authorities to stop selling sausages
suspected to be non-halal. During the closure, the company conducted ritual
cleansing by 80 of the store's Muslim staff under the supervision of the halal
authority of all its utensils and cutlery, even the cups, the kitchen racks and the
storage area, which included the walk-in chiller and the exit cafe area, as well as
the three ovens. The network relates to its supply chain structure, where the
‘party’ that was the cause of the halal incident needs to be removed, which also
need to be communicated extensively by the brand owner. That is the
elimination of a supply chain partner or removal of relevant staff. In the example
of Ikea Malaysia, Ikea terminated the supply agreement with the supplier of the
suspected sausages, to eliminate any possible doubt with Muslims that want to
visit Ikea’s restaurant.
 Recovery or ex post controls are operationalised through crisis management by
the cross-functional risk mitigation and recovery team. A halal supply chain risk
recovery cycle is proposed in figure 3.

The halal supply chain risk recovery cycle consists of four components:
1. Implement risk recovery and communication plan (Scholten et al., 2014).
The implementation of pre-established recovery and communication
plans for crisis management begins the minute an emergency occurs
(VanVactor, 2011). Key is to act swiftly and being open to the media what
activities have been implemented.
2. Resume operations. Resuming operations might need additional
resources to get back on track. Horizontal and vertical collaboration
capabilities help to use resources and complementary skills in the supply
chain in the most effective ways (Scholten et al., 2014; Tieman, 2014)
Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

3. Maintain employee support. Consequently the planning team has to

ensure the continuity of risk and resilience management while
maintaining employee support to be able resume operations at the
desired level, which possibly involves re-engineering the supply chain.
Research shows that this is only possible if risk awareness is spread
throughout the supply chain (Scholten et al., 2014).
4. Review risk mitigation and recovery plan (Scholten et al., 2014).
Important is to review the effectiveness of the mitigation and recovery
plan with the experience of the halal issue and improve these plans where
necessary.

[INSERT HERE FIGURE 3]

The halal supply chain risk recovery cycle should be well prepared (people and
processes) and practiced (Griffin, 2008).

The prevention, mitigation and recovery mechanisms discussed in this section

provide proactive and reactive strategies for effective supply chain risk
management that ensure both robust and resilient halal supply chains.

6. Conclusion

Integrity of halal products, the condition of the product being unquestionably

halal, is becoming an increasing concern for governments and industries. This is
due to halal integrity issues are more likely to occur than before, halal integrity
issues are harder to detect
, and once detected go viral on the internet, exposing
the integrity of country’s halal systems, brands and corporate reputation. The
neglect of halal requirements throughout the entire supply chain is gradually
weakening consumer confidence in halal certified products!

Halal supply chain security measures to prevent contamination and doubt in

halal products are put in place to protect the halal supply chain against risks,
including intentional events. Factors that affect halal supply chain vulnerability
 are product characteristics (bulk versus unitised; ambient versus cool chain) and
market requirements (Muslim versus non-Muslim country).

Sources of halal supply chain risk management risks can be found in supply
chain business processes, logistics control, supply chain resources and supply
chain network structure. Current risk and reputation management practices are
passive, resulting in serious security gaps in halal supply chains: both sourcing
and distribution.

The following research propositions have been put forward:

P1. Food products require more extensive risk management than
cosmetics and pharmaceutical products.

P2. Products that are animal based require more extensive risk
Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

management than products that are non-animal based.

P3. Suppliers from non-Muslim countries require more extensive risk

management than suppliers from Muslim countries.

P4. Logistics service providers and distributors involved in distribution to

Muslim countries require more extensive risk management than for non-
Muslim countries.

P5. Inbound Islamic brands require more extensive risk management

than true, traditional or outbound Islamic brands.

Risk management, a foremost strategic initiative, requires a prevention-

mitigation-recovery mechanism. For risk prevention, a halal supply chain risk
prevention cycle is proposed, covering four components: (1) risk vulnerability
assessment; (2) supply chain (re)design; (3) vertical and horizontal
collaboration; and (4) monitoring.

Important principles in mitigation are control, coherence, and coordination. For

risk mitigation, a halal supply chain risk mitigation cycle is proposed, covering
four components: (1) investigative audits; (2) cross-functional team; (3) risk
mitigation & communication plan; and (4) monitoring.

Recovery is key for an effective and efficient crisis management and limit
reputation damages. The main objective of recovery is to restore the reputation
or social capital of the brand, namely its trust, Islamic values and network. For
risk recovery, a halal supply chain risk recovery cycle is proposed, covering four
components: (1) risk recovery and communication plan; (2) resume operations;
(3) maintain employee support; and (4) review risk mitigation and recovery
plans.

Case study research is recommended to validate the proposed halal supply chain
risk prevention, mitigation and recovery cycles in global halal supply chains. This
will also allow for testing of the research proposition as formulated.
 References
Abdul Rahman, R., Rezai, G., Mohamed, Z., Shamsudin, M. N. and Sharifuddin, J.
(2013), “Malaysia as Global Halal Hub: OIC Food Manufacturers' Perspective”,
Journal of International Food & Agribusiness Marketing, Vol. 25 No. 1, pp. 154-
166.

Ahmad, N. A., Abaidah, T. N. and Yahya, M. H. A. (2013), “A study on halal food

awareness among Muslim customers in Klang Valley”, in The 4th International
Conference on Business and Economic Research (4th icber 2013) Proceeding, pp.
1073-1087.

Ali, M. H., Tan, K. H., Pawar, K. and Makhbul, Z. M. (2014), “Extenuating Food
Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

Integrity Risk through Supply Chain Integration: The Case of Halal Food”,
Industrial Engineeering & Management Systems, Vol. 13 No. 2, pp. 154-162.

Al-Qaradawi, Y. (2007), The Lawful and the Prohibited in Islam, Islamic Book
Trust, Kuala Lumpur.

Alserhan, B. A (2010), "On Islamic branding: brands as good deeds", Journal of

Islamic Marketing, Vol. No. 2, pp. 101-106.

Arway, A. G. (2013), Supply chain security: a comprehensive approach, CRC press,

Boca Raton.

Christopher, M. and Peck, H. (2004), “Building the resilient supply chain”, The
International Journal of Logistics Management, Vol. 15 No. 2, pp. 1-14.

Dabbene, F., Gay, P. and Tortia, C. (2014), ”Traceability issues in food supply
chain management: A review”, Biosystems Engineering, Vol. 120, pp. 65-80.

Faisal, M. N., Banwet, D. K. and Shankar, R. (2006), “Supply chain risk mitigation:
modeling the enablers”, Business Process Management Journal, Vol. 12 No. 4, pp.
535-552.

Fischer, J. (2008), “Religion, science and markets”, EMBO reports, Vol. 9 No. 9, pp.
828-831.

Fombrun, C. and Van Riel, C. (1997), “The reputational landscape”, Corporate

reputation review, Vol. 1 No. 1 and 2, pp. 5-12.

Gatzert, N. and Schmit, J. (2015), “Supporting strategic success through

enterprise-wide reputation risk management”, The Journal of Risk Finance, Vol.
17 No. 1, pp. 1-23.

Griffin, A. (2008), New strategies for reputation management: gaining control of

issues, crises & corporate social responsibility, Kogan Page Limited, United
Kingdom.
 IHI Alliance (2010), ICCI-IHI Alliance Halal Standard: Logistics – IHIAS 0100:2010,
1st ed., International Halal Integrity Alliance, Kuala Lumpur.

Jüttner, U. (2005), “Supply chain risk management: understanding the business

requirements from a practitioner perspective”, The International Journal of
Logistics Management, Vol. 16 No. 1, pp. 120-141.

Klibi, W., Martel, A. and Guitouni, A. (2010), “The design of robust value –
creating supply chain networks: a critical review”, European Journal of
Operations Research, Vol. 203 No. 2, pp. 283-293.

Lambert, D. M. and Cooper, M. C. (2000), “Issues in supply chain management”,

Industrial marketing management, Vol. 29 No. 1, pp. 65-83.
Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

Lammers, B., Amstel, W.P. van and Eijkelenbergh, P. (2009), Risicomanagement

en logistiek: kan uw organisatie tegen een stootje? (Risk management and logistics:
can your organisation handle a beating?), Pearson Education Benelux,
Amsterdam.

Laldin, M.A. (2006), Islamic Law – An Introduction, Research Centre –

International Islamic University Malaysia, Kuala Lumpur.

Lewis, M. A. (2003), “Cause, consequence and control: towards a theoretical and

practical model of operational risk”, Journal of Operations Management, Vol. 21
No. 2, pp. 205-224.

Li, G., Fan, H., Lee, P. K. and Cheng, T. C. E. (2015), “Joint supply chain risk
management: An agency and collaboration perspective”, International Journal of
Production Economics, Vol. 164, pp. 83-94.

Malaymailonline (2014), “We’ll eat Cadbury to prove it’s halal, Jakim officer
says”, 3 June 2014, available at:
http://www.themalaymailonline.com/malaysia/article/well-eat-cadbury-to-
prove-its-halal-jakim-officer-says (accessed 17 June 2015).

Mortimore, S. and Wallace, C. (2013), HACCP: A practical approach, Springer

Science & Business Media, New York.

Nakagawa, Y. and Shaw, R. (2004), “Social capital: A missing link to disaster

recovery”, International Journal of Mass Emergencies and Disasters, Vol. 22 No. 1,
pp. 5-34.

Ott, L. and Theunissen, P. (2015), “Reputations at risk: Engagement during social

media crises”, Public Relations Review, Vol. 41 No. 1, pp. 97-102.

Pereira, C. R., Christopher, M. and Da Silva, A. L. (2014), “Achieving supply chain

resilience: the role of procurement”, Supply Chain Management: An International
Journal, Vol. 19 No. 5/6, pp. 626-642.
 Ponomarov, S. Y. and Holcomb, M. C. (2009), “Understanding the concept of
supply chain resilience”, The International Journal of Logistics Management, Vol.
20 No. 1, pp. 124-143.

Reich, J. W. (2006), “Three psychological principles of resilience in natural

disasters”, Disaster Prevention and Management: An International Journal, Vol. 15
No. 5, pp. 793-798.

Saunokonoko, M. (2014), “Chain Reaction: building a halal superhighway”, in 10th

World Islamic Economic Forum: Innovative partnerships for economic growth, 28-
30 October 2014, pp. 134-136.

Scholten, K., Sharkey Scott, P. and Fynes, B. (2014), “Mitigation processes–

Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

antecedents for building supply chain resilience”, Supply Chain Management: An

International Journal, Vol. 19 No. 2, pp. 211-228.

Sheffi, Y. and Rice Jr, J. B. (2005), “A supply Chain View of the resilient
Enterprise”, MIT Sloan management review, Vol. 47 No. 1, pp. 40-48.

Smaiziene, I. and Jucevicius, R. (2009), “Corporate reputation: Multidisciplinary

richness and search for a relevant definition”, Commerce of Engineering
Decisions, Vol. 62 No. 2, pp. 91-99.

Talib, M. S. A., Abdul Hamid, A. B. and Zulfakar, M. H. (2015), “Halal supply chain
critical success factors: a literature review”, Journal of Islamic Marketing, Vol. 6
No. 1, pp. 44-71.

Tieman, M. (2011), “The application of halal in supply chain management: in-

depth interviews”, Journal of Islamic Marketing, Vol. 2 No. 2, pp. 186-195.

Tieman, M., van der Vorst, J. G. and Ghazali, M. C. (2012), “Principles in halal
supply chain management”, Journal of Islamic Marketing, Vol. 3 No. 3, pp. 217-
243.

Tieman, M. and Che Ghazali, M. (2013), “Principles in halal purchasing”. Journal

of Islamic Marketing, Vol. 4 No. 3, pp. 281-293.

Tieman, M. (2014), “Synergy in halal supply chains”, Islam and Civilisational

Renewal, Vol. 5 No. 3, pp. 454-459.

Tieman, M. (2015), “Halal clusters”, Journal of Islamic Marketing, Vol. 6 No. 1, pp.
2-21.

Tieman, M. and Darun, M.R. (2015), “A supply chain approach towards halal”,
Journal of Halal Research, Vol. 1 No. 1, pp. 15-18.

Tomasini, R. and Wassenhoven, L. van (2009), Humanitarian Logistics, Palgrave

Macmillan, New York.
 Van Riel, C. (2014), “Future trends in reputation management”, RSM Discovery-
Management Knowledge, Vol. 19 No. 3, pp. 5-7.

VanVactor, J. D. (2011), “Cognizant healthcare logistics management: ensuring

resilience during crisis”, International Journal of Disaster Resilience in the Built
Environment, Vol. 2 No. 3, pp. 245-255.

Verbeke, W., Rutsaert, P., Bonne, K. and Vermeir, I. (2013), “Credence quality
coordination and consumers' willingness-to-pay for certified Halal labelled
meat”, Meat science, Vol. 95 No. 4, pp. 790-797.

Vlajic, J. V., Van der Vorst, J. G. A. J. and Hendrix, E. M. T. (2010), “On robustness in
food supply chain networks”, in Trienekens, et al. (Eds.), Towards Effective Food
Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

Supply Chains, Wageningen Academic Publishers, The Netherlands, pp. 63-82.

Wieland, A. and Marcus Wallenburg, C. (2012), “Dealing with supply chain risks:
Linking risk management practices and strategies to performance”, International
Journal of Physical Distribution & Logistics Management, Vol. 42 No. 10, pp. 887-
905.

Wilson, J.A.J. and Liu, J. (2011) "The challenges of Islamic branding: navigating
emotions and halal", Journal of Islamic Marketing, Vol. 2 No. 1, pp. 28 – 42.

Yunus, N. S. N. M., Rashid, W. E. W., Ariffin, N. M. and Rashid, N. M. (2014),

“Muslim's Purchase Intention towards Non-Muslim's Halal Packaged Food
Manufacturer”, Procedia-Social and Behavioral Sciences, Vol. 130, pp. 145-154.

Biographies

Dr. Marco Tieman is Adjunct Professor with Universiti Tun Abdul Razak
(Malaysia), responsible for research on halal supply chain management. He
obtained his Master’s degree in industrial engineering with the University of
Twente (the Netherlands) in 1997 and his PhD in business management with
Universiti Teknologi MARA (Malaysia) in 2013. He is currently the CEO of LBB
International, an international logistics consultancy and research firm
specialised in logistics diagnositics, supply chain design & solutions, and market
research. He chaired the development of the international halal logistics
standard (IHIAS, 0100:2010) under ICCI-IHI Alliance. Marco Tieman is the
corresponding author and can be contacted at: marco@lbbinternational.com
Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

Figure 1: Halal supply chain risk prevention cycle

4. Monitoring 1. Risk
vulnerability
assessment

Robust
halal
supply
chain
3. Vertical 2. Supply
and chain
horizontal (re) design
collaboration
Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

Figure 2: Halal supply chain risk mitigation cycle

4. Monitoring 1. Investiga-
tive audits

Resilient
halal
supply
chain
3. Risk 2. Cross-
mitigation and functional
communica- team
tion plan
Downloaded by Australian Catholic University At 22:42 01 August 2017 (PT)

Figure 3: Halal supply chain risk recovery cycle

4. Review risk 1. Risk

mitigation recovery and
and recovery communica-
plan tion plan
Resilient
halal
supply
chain
3. Maintain 2. Resume
employee operations
support