By Prof. Dr. Marco Tieman
Halal is going through an evolution from:
(1) Muslim company (purely based on the trust between buyer and seller);
(2) Halal product (ingredients and production process is certified by halal certification body);
(3) Halal supply chain (halal requirements are addressed end-to-end throughout the supply chain) towards;
(4) Halal value chain (halal requirements are addressed throughout the corporate value chain).
It is important to recognise that for the halal industry (as well as for Governments) one phase is built further on the previous phase, and those phases cannot be skipped.
The ‘Evolution of Halal’ model was published in Journal of Islamic Marketing (Emerald) in 2011 under the title ‘The application of halal in supply chain management: in-depth interviews’. This publication was an important starting point for academic research in halal supply chain management. Eight years later several companies have been adopting halal supply chain and halal value chain best-practices in order to improve their halal assurance system.
In fact, it is crucial for companies that are serving Muslim markets to be proactive on halal matters and bring halal to the same level as food/product safety. The halal maturity of a company could be introduced as a key performance indicator for top management of companies operating in, or exporting to, Muslim (majority) countries.
Halal maturity is hereby defined as the main position of an organisation in the halal evolution. The fact that a company has an Islamic bank account does not automatically mean that the position of the company is already in level 4 (Halal Value Chain). In order to reach level 4, your organisation also needs to be fully compliant with level 2 (Halal Product) and level 3 (Halal Supply Chain).
The following ten (10) questions will help a company to ascertain their main position in the evolution of halal:
Does your organisation have a Halal Assurance System (HAS) manual?
Is your organisation halal certified by a Halal Certification Body?
Are your operations, purchasing and logistics staff trained on halal?
Does your HAS cover transportation and storage requirements for all ingredients/product component sourcing and in distribution of your final product?
Do these sourcing & distribution contracts have a halal clause, and is halal covered during the audit of supply chain partners?
Does your organisation have a halal supply chain risk prevention, risk mitigation, and risk recovery plan?
Does your organisation have Islamic branding & marketing guidelines?
Has your organisation replaced animal with plant-based ingredients/components where possible?
Does your organisation have a green policy in place, covering: waste reduction, green energy (solar, wind), and water management (usage + pollution)?
Does your organisation use Islamic banking and Takaful where possible?
Answering the questions in the checklist above, will define the current main position of your organisation: your halal maturity. I hope that this self-assessment tool will be useful for your organisation as new key performance indicator in serving Muslim markets and a stimulus for continuous improvement of your halal assurance system.
Prof. Dr. Marco Tieman, is the founder & CEO of LBB International. He is also a professor with Help University and Universiti Malaysia Pahang, in charge of research on halal supply chain management and halal risk & reputation management.