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Jakarta, 29 November 2015
HALAL SUPPLY CHAIN
MANAGEMENT:
Principles & Opportunities
by Dr. Marco Tieman
www.lbbinternational.com
2
Evolution of Halal
Halal Indonesia
Halal Supply Chain Model
Opportunities
Agenda
Why – What – H...
www.lbbinternational.com
Introduction
www.lbbinternational.comDr. Marco Tieman
Founder & CEO, LBB International
 Logistics Consultancy & Research firm
 Logist...
www.lbbinternational.com
www.lbbinternational.com
Evolution of Halal
www.lbbinternational.com
Evolution of Halal
Muslim
Company
Halal
Product
Halal
Supply
Chain
Halal Value
Chain
1 2 3 4
Sour...
www.lbbinternational.com
1. Muslim Company
TRUST:
Validity of halal is
based on the
transfer of
responsibility
www.lbbinternational.com
2. Halal Product
SOURCE IS
CERTIFIED:
Validity of halal is
based on the
verification by an
indepe...
www.lbbinternational.com
3. Halal Supply Chain
USE OF
DIFFERENT
STANDARDS:
Validity of halal is
based on the halal
certifi...
www.lbbinternational.com
4. Halal Value Chain
R&D Production Distribution
Marketing
& Sales
Reduction
of waste
Reduce
envi...
www.lbbinternational.com
Towards a Halal Supply Chain
Muslim
Company
Halal
Product
Halal
Supply
Chain
Halal Value
Chain
1 ...
www.lbbinternational.com
Halal Indonesia
www.lbbinternational.com
Halal Industry
o Processing
o Distributor
o LSP
o Retail
o Restaurants
o Hotels
Consumer
o Higher...
www.lbbinternational.com
Integrity of halal supply chains (why?)
www.lbbinternational.com
Integrity of halal supply chains is becoming
an increasing concern for governments and
industries...
www.lbbinternational.com
The neglect of halal requirements
throughout the entire supply chain is
gradually weakening consu...
www.lbbinternational.com
Foundation of halal SCM (what?)
www.lbbinternational.com
Perception
of Muslim
consumer
Risk of
contamination
Direct contact with Haram
MARKET
requirements...
www.lbbinternational.com
In practice …
Percep on
of Muslim
consumer
Risk of
contamina on
Direct contact with Haram
MARKET
...
www.lbbinternational.com
Perception
Risk
Direct contact with Haram
Non-Muslimcountry
Muslimcountry
Source:Tiemanetal.(2012...
www.lbbinternational.com
A supply chain approach towards halal
www.lbbinternational.com
From a product to supply chain approach (how?)
www.lbbinternational.com
A ‘Product Approach’ to Halal
Factory Distributor Retailer
HALAL
ASSURANCE
FOOD/PRODUCT SAFETY
www.lbbinternational.com
A ‘Supply Chain Approach’ to Halal
Factory Distributor Retailer
HALAL ASSURANCE
FOOD/PRODUCT SAFE...
www.lbbinternational.com
Halal Supply Chain Model
www.lbbinternational.com
27
Logistics
Control
SC Business
Processes
SC Network
Structure
SC
Resources
Halal Policy
Supply ...
www.lbbinternational.com
28
Logistics
Control
SC Business
Processes
SC Network
Structure
SC
Resources
Halal Policy
Supply ...
www.lbbinternational.com
29
Logistics
Control
SC Business
Processes
SC Network
Structure
SC
Resources
Halal Policy
Supply ...
www.lbbinternational.com
30
Logistics
Control
SC Business
Processes
SC Network
Structure
SC
Resources
Halal Policy
Supply ...
www.lbbinternational.com
31
Logistics
Control
SC Business
Processes
SC Network
Structure
SC
Resources
Halal Policy
Supply ...
www.lbbinternational.com
32
Logistics
Control
SC Business
Processes
SC Network
Structure
SC
Resources
Halal Policy
Supply ...
www.lbbinternational.com
33
Logistics
Control
SC Business
Processes
SC Network
Structure
SC
Resources
Halal Policy
Supply ...
www.lbbinternational.com
34
Logistics
Control
SC Business
Processes
SC Network
Structure
SC
Resources
Halal Policy
Supply ...
www.lbbinternational.com
35
Logistics
Control
SC Business
Processes
SC Network
Structure
SC
Resources
Halal Policy
Supply ...
www.lbbinternational.com
36
Logistics
Control
SC Business
Processes
SC Network
Structure
SC
Resources
Halal Policy
Supply ...
www.lbbinternational.com
1. Communication of “HALAL SUPPLY CHAIN”
code through freight documents, on cargo and
(customs/IT...
www.lbbinternational.com
Opportunities
www.lbbinternational.com
1. Brand Owners
Factory Distributor Retailer
HALAL ASSURANCE
FOOD/PRODUCT SAFETY
 Extending hala...
www.lbbinternational.com
• Halal Storage
• Halal Transport
• Halal freight
forwarding
• Halal 3PL solutions
Solution
(Comp...
www.lbbinternational.com
3. Halal Industrial Parks
Halal
Logis cs
Halal
Network
Halal
Cer fica on
Body
Halal Integrity Net...
www.lbbinternational.com
Q & A
More information:
marco@lbbinternational
http://halalsupplychainmanagement.blogspot.com
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UKM : Halal Supply Chain Management

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Halal Supply Chain Managemen : Principles & Opportunities By Dr. Marco Tieman

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UKM : Halal Supply Chain Management

  1. 1. Jakarta, 29 November 2015 HALAL SUPPLY CHAIN MANAGEMENT: Principles & Opportunities by Dr. Marco Tieman
  2. 2. www.lbbinternational.com 2 Evolution of Halal Halal Indonesia Halal Supply Chain Model Opportunities Agenda Why – What – How of halal SCM Q & A Introduction
  3. 3. www.lbbinternational.com Introduction
  4. 4. www.lbbinternational.comDr. Marco Tieman Founder & CEO, LBB International  Logistics Consultancy & Research firm  Logistics diagnostics, supply chain design & solutions, market research Adjunct Professor, Universiti Malaysia Pahang  Research in logistics & supply chain management  Curriculum development  Teaching Supply Chain Management (MBA) Adjunct Professor, Universiti Tun Abdul Razak  Research in halal supply chain management  Teaching Purchasing & Supply Chain Management (MBA) Columnist, New Straits Times (Malaysia)  Weekly logistics column on Wednesday
  5. 5. www.lbbinternational.com
  6. 6. www.lbbinternational.com Evolution of Halal
  7. 7. www.lbbinternational.com Evolution of Halal Muslim Company Halal Product Halal Supply Chain Halal Value Chain 1 2 3 4 Source:MarcoTieman,(2011)"TheapplicationofHalalin supplychainmanagement:in-depthinterviews",Journalof IslamicMarketing,Vol.2Iss:2,pp.186-195
  8. 8. www.lbbinternational.com 1. Muslim Company TRUST: Validity of halal is based on the transfer of responsibility
  9. 9. www.lbbinternational.com 2. Halal Product SOURCE IS CERTIFIED: Validity of halal is based on the verification by an independent halal auditing & certification body
  10. 10. www.lbbinternational.com 3. Halal Supply Chain USE OF DIFFERENT STANDARDS: Validity of halal is based on the halal certification of supply chain partners: supplier, producer, logistics, retail, etc.
  11. 11. www.lbbinternational.com 4. Halal Value Chain R&D Production Distribution Marketing & Sales Reduction of waste Reduce environmen -tal impact From animal to plant based Halal certification of your production Extend halal towards distribution Control of distribution channel? Islamic branding & marketing Sourcing Are my suppliers halal certified? How are my raw materials transported? Islamic Banking & Finance
  12. 12. www.lbbinternational.com Towards a Halal Supply Chain Muslim Company Halal Product Halal Supply Chain Halal Value Chain 1 2 3 4
  13. 13. www.lbbinternational.com Halal Indonesia
  14. 14. www.lbbinternational.com Halal Industry o Processing o Distributor o LSP o Retail o Restaurants o Hotels Consumer o Higher halal awareness o Health awareness o Lifestyle o Internet Government control o Voluntary -> mandatory o G-2-G support o Support of SMEs Halal Standards o New products: food, cosmetics, pharma o New services: distributor, LSP, retail Availability & Access Halal compliant supply chain TrustHalal assurance € € € € €€ Source: Imarat Consultants
  15. 15. www.lbbinternational.com Integrity of halal supply chains (why?)
  16. 16. www.lbbinternational.com Integrity of halal supply chains is becoming an increasing concern for governments and industries due to: 1) halal integrity issues are more likely to occur than before 2) Halal integrity issues are harder to detect 3) Once detected go viral on the internet, exposing the integrity of country’s halal systems and corporate brands
  17. 17. www.lbbinternational.com The neglect of halal requirements throughout the entire supply chain is gradually weakening consumer confidence in halal certified products!
  18. 18. www.lbbinternational.com Foundation of halal SCM (what?)
  19. 19. www.lbbinternational.com Perception of Muslim consumer Risk of contamination Direct contact with Haram MARKET requirements PRODUCT characteristics PRODUCT characteristics Source:MarcoTieman(2011),Theapplicationofhalalinsupply chainmanagement,JournalofIslamicMarketing,2(2),pp.186-195) The building blocks
  20. 20. www.lbbinternational.com In practice … Percep on of Muslim consumer Risk of contamina on Direct contact with Haram MARKET requirements Physical Segregation + Identification Packaging = Best practice! = Precaution! = Cross- contamination! HALAL SUPPLY CHAIN 100 mm 100mm REJECTED 100 mm 100mm HALAL SUPPLY CHAIN
  21. 21. www.lbbinternational.com Perception Risk Direct contact with Haram Non-Muslimcountry Muslimcountry Source:Tiemanetal.(2012),Principlesinhalalsupplychain management,JournalofIslamicMarketing,3(3),pp.217-243 Muslim vs. non-Muslim markets
  22. 22. www.lbbinternational.com A supply chain approach towards halal
  23. 23. www.lbbinternational.com From a product to supply chain approach (how?)
  24. 24. www.lbbinternational.com A ‘Product Approach’ to Halal Factory Distributor Retailer HALAL ASSURANCE FOOD/PRODUCT SAFETY
  25. 25. www.lbbinternational.com A ‘Supply Chain Approach’ to Halal Factory Distributor Retailer HALAL ASSURANCE FOOD/PRODUCT SAFETY  Extending halal assurance from factory to point of consumer purchase  Creating a robust, effective and efficient halal supply chain  Strengthen commercial brands
  26. 26. www.lbbinternational.com Halal Supply Chain Model
  27. 27. www.lbbinternational.com 27 Logistics Control SC Business Processes SC Network Structure SC Resources Halal Policy Supply Chain Objectives Halal Performance M A R K E T P R O D U C T
  28. 28. www.lbbinternational.com 28 Logistics Control SC Business Processes SC Network Structure SC Resources Halal Policy Supply Chain Objectives Halal Performance M A R K E T P R O D U C T Halal policy Halal needs commitment at top management level! This intention (niyat) is translated into a “HALAL POLICY” Amongst others, to address: 1) The responsibility of an organisation in protecting the halal integrity (along the supply chain) 2) The scope of halal certification of the organisation 3) The assurance to the consumer or customer (promise) 4) The method of assurance
  29. 29. www.lbbinternational.com 29 Logistics Control SC Business Processes SC Network Structure SC Resources Halal Policy Supply Chain Objectives Halal Performance M A R K E T P R O D U C T 1) Logistics objectives (reduce lead-times, improve deliver reliability & flexibility, and reduce integral supply chain costs) 2) Customer service objectives (order cycle time, inventory availability, order fill rate) Supply chain objectives
  30. 30. www.lbbinternational.com 30 Logistics Control SC Business Processes SC Network Structure SC Resources Halal Policy Supply Chain Objectives Halal Performance M A R K E T P R O D U C T 1) Logistics objectives (reduce lead-times, improve deliver reliability & flexibility, and reduce integral supply chain costs) 2) Customer service objectives (order cycle time, inventory availability, order fill rate) Supply chain objectives New logistics objectives (e.g.): 1) The reduction of supply chain layers 2) The conversion of supply chain partners to conform to halal requirements 3) The consolidation of halal cargo flows
  31. 31. www.lbbinternational.com 31 Logistics Control SC Business Processes SC Network Structure SC Resources Halal Policy Supply Chain Objectives Halal Performance M A R K E T P R O D U C T Logistics control 1) Strong partnerships with supply chain partners 2) Develop strategies to secure continuity of supply
  32. 32. www.lbbinternational.com 32 Logistics Control SC Business Processes SC Network Structure SC Resources Halal Policy Supply Chain Objectives Halal Performance M A R K E T P R O D U C T Supply chain resources 1) Organisation  Halal Committee  Training 2) Information Management  “Halal Supply Chain” code  Tracking & Tracing:  tier 1 customers & suppliers  chain of custody
  33. 33. www.lbbinternational.com 33 Logistics Control SC Business Processes SC Network Structure SC Resources Halal Policy Supply Chain Objectives Halal Performance M A R K E T P R O D U C T Supply chain business processes 1) Order fulfilment -> segregation requirements 2) Flow management -> halal control activities & assurance activities 3) Procurement -> supplier management
  34. 34. www.lbbinternational.com 34 Logistics Control SC Business Processes SC Network Structure SC Resources Halal Policy Supply Chain Objectives Halal Performance M A R K E T P R O D U C T Supply chain network structure 1) Supply chain partners are halal certified (preferred) or understand and comply with the requirements of halal supply chains. 2) Simple supply chains structures 3) Need for coordination
  35. 35. www.lbbinternational.com 35 Logistics Control SC Business Processes SC Network Structure SC Resources Halal Policy Supply Chain Objectives Halal Performance M A R K E T P R O D U C T Halal performance
  36. 36. www.lbbinternational.com 36 Logistics Control SC Business Processes SC Network Structure SC Resources Halal Policy Supply Chain Objectives Halal Performance M A R K E T P R O D U C T Ensure robustness through reduction and removing of vulnerabilities Consolidation of halal flows; CODP at HRDC Muslim or Non-Muslim country Bulk or unitised; Wet (chilled, frozen) or dry (ambient) Halal Supply Chain code; Tracking & tracing; Competency of staff Halal control activities and assurance activities Simple supply chain structure; Halal gateway partners
  37. 37. www.lbbinternational.com 1. Communication of “HALAL SUPPLY CHAIN” code through freight documents, on cargo and (customs/IT) systems; 2. Seek SYNERGY ADVANTAGES through vertical and horizontal collaboration; 3. Taking a MANUFACTURER / BRAND OWNER PERSPECTIVE in halal logistics; 4. Benefits of the FIRST-MOVER ADVANTAGE. Major Success Factors
  38. 38. www.lbbinternational.com Opportunities
  39. 39. www.lbbinternational.com 1. Brand Owners Factory Distributor Retailer HALAL ASSURANCE FOOD/PRODUCT SAFETY  Extending halal assurance from factory to point of consumer purchase  Creating a robust, effective and efficient halal supply chain  Strengthen commercial brands
  40. 40. www.lbbinternational.com • Halal Storage • Halal Transport • Halal freight forwarding • Halal 3PL solutions Solution (Complete end-to-end solution) Service (Specific Services Only) PHYSICAL ASSET BASED NON-PHYSICAL ASSET BASED Specialised & Advanced (Value Adding) Basic Activities (Movement & Storage) • HRDC: VAL • HRDC: Processing • HRDC: Cross Chain Control Centre (Halal 4PL Solutions) 2. Logistics Service Providers
  41. 41. www.lbbinternational.com 3. Halal Industrial Parks Halal Logis cs Halal Network Halal Cer fica on Body Halal Integrity Network Supplier Produc on Recipient Halal Supply Chain Government Halal Trade Islamic Finance Enablers MuslimConsumer EducaonandResearch Source:Tieman,M.(2015).Halalclusters.Journalof IslamicMarketing,6(1),pp.2-21.
  42. 42. www.lbbinternational.com Q & A More information: marco@lbbinternational http://halalsupplychainmanagement.blogspot.com

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