challenges in implementation of halal supply chain in meat industry

ACKNOWLEDGEMENT

First of all with limitless gratitude, I would like to thank Almighty Allah for

providing me the strength and ability to complete this research. ‘Life isn’t a

solo-flight; it’s a joint venture and a teamwork’ is one of the beliefs that I’d

been espousing since childhood. I felt the ultimate need of this belief when I

decided to write down my thesis. The credit of pushing me to my ultimate

limits goes to my parents, motivator of all motivators, who would barge into

my room many times a day just to prod and remind me about the deadline. I

would also like to thank the entire interviewee’s for sharing their precious time

and in depth knowledge about the industry. My supervisor, Mr. Waqar Ahmed

contributed a lot in terms of designing, composing, proofreading and

improvising the manuscript. In the end, I would like to extend my gratitude

towards my valuable friends for their advice and encouragements.

i

Challenges in Implementation of Halal Supply Chain in Meat Industry:A Case from Karachi

Table of Contents

ACKNOWLEDGEMENT............................................................................................i

ABSTRACT................................................................................................................ iv

Chapter # 1..................................................................................................................5

1.0 Introduction...........................................................................................................6

1.1 Background........................................................................................................6

1.2 Problem Statement.............................................................................................8

1.3 Research Objective............................................................................................9

1.4 Research Questions............................................................................................9

1.6 Limitation of the Study....................................................................................10

2.0 Literature Review................................................................................................13

2.1 Theoretical Background...................................................................................13

2.2 Empirical Studies.............................................................................................15

Chapter # 3................................................................................................................29

3.0 Methodology........................................................................................................30

3.1 Research Approach..........................................................................................30

3.2 Research Purpose.............................................................................................30

3.3 Research Design..............................................................................................30

3.4 Data Source......................................................................................................31

3.5 Target Population.............................................................................................31

3.6 Sample Size.....................................................................................................31

3.7 Data Collection Technique...............................................................................31

3.8 Sampling Technique........................................................................................32

Chapter # 4................................................................................................................33

4.0 Data Analysis.......................................................................................................34

4.1 Merger of Halal Compliance’s:........................................................................34

4.2 Curtailing Inspection Criteria...........................................................................35

4.3 Installation of Reefer Storage Facilities...........................................................36

4.4 Hindrances in Traceability...............................................................................37

4.5 Barriers in Implementing Full Quality Assurance............................................38

2


4.6 Increasing Visibility through Information Exchange.......................................39

4.7 Establish a Regulatory Body............................................................................41

Chapter # 5................................................................................................................43

5.0 Conclusion...........................................................................................................44

5.1 Recommendations............................................................................................45

5.2 Future Recommendations.................................................................................47

Bibliography..............................................................................................................48

Appendices................................................................................................................54

7.0 Appendix.............................................................................................................55

7.1 Appendix “A”..................................................................................................55

7.2 Appendix “B”..................................................................................................59

Appendix “C”........................................................................................................64

7.4 Appendix “D”..................................................................................................67

3

ABSTRACT

In today’s highly competitive global business world, Halal has developed as a

major factor especially in food and safety measures with increase in Muslim

population around the globe. In a fast paced environment, where components

or ingredients are procured from a different country, manufactured in another

country and sold across the entire world, effective supply chains are needed

for a long run growth and stability. Halal industry is still in its primitive years

and efforts are required to chart its way in compliance with Islamic principles

desirable. This research is conducted with a fundamental objective of

identifying the challenges in Halal meat supply chain from a manufacturer’s

point of view. Interviews were conducted with 3 different meat provider’s

operating in Karachi region and variables discussed were halal guidelines,

halal logistics and financial hurdles in implementation of halal, traceability

issues and halal certifications impact on export market as well as local market.

The result of the research shows that more work needs to be done in

technological usage, establishing a regulatory body and installation of storage

facilities at export destination so as to maintain the meat product at a specified

ambient and temperature and a need to build an infrastructure is inevitable to

monitor operations and integrate information exchange in order to develop a

halal lucrative industry.

iv

Keywords: Halal, Halal guidelines, Halal logistics, traceability and global

certifications.

v


Chapter # 1

6


1.0 Introduction

1.1 Background

In the recent years, there has been a dynamic change observed in the

world’s population towards Halal products which has enabled a significant

growth from both Muslim & Non-Muslim consumers. Not only from Muslim

countries, consumers are measured to be very vigilant in generating demand of

meat products, pharmaceutical & manufactured foods through impure

procedures in supply chains also having less density of Muslim populated

countries such as Europe and South America.1

In 2010, the Halal market had a significant impact having sharing 16%

of the total food trade in the world and these numbers are estimated to be

growing with more than USD 500 Billion per year because of increasing

popularity of Halal operations and products among the Non-Muslims. 2

As the globalization has taken place, consumers have become more

aware and more educated towards in their consumption especially Muslims.

The ambiguity is not only related to ingredients used in making but also the

operations being followed in respective supply chains to ensure the integrity of

the Halal product all the way to the end consumer.3

1 Norman et al (2008) , Golnaz et al (2010)2 Adam (2006) , Sungkar (2010)3 Alserhan (2008)

7


The authenticity of Halal meat supply has raised serious questions

from its origin to end consumer because of the handling of food materials at

various places and from different sources from all over the world. The

ambiguity in various Muslim customers is also valid in relation to Halal meat

supply where New Zealand, Australia and Brazil are major meat exporters. In

question to it, comes the Halal integrity of food guarantees and the measures

taken so as to hold its integrity and purity through various procedures.

Correspondingly, non- Muslims are also moving towards halal

products in the international market. According to a study, it has been

emphasized that consumption of food among non-Muslims is driven by halal

which is recognized as a sign of hygiene, quality and safety.4 Moreover, the

major factor which is perceived by non-Muslims is that halal brands are

extensively fair in trade, ethical and honest business transactions5. Not to

mention, Halal market expansion has led to relegate inhumane animal

treatment which has attracted the non-Muslim consumers.6

This has developed a key interest in both academic as well as from

corporate point of view and measures are now been taken in Logistics sector

to ensure sterilization of product to the end consumer but limited literature is

found in Halal food supply chain management. Especially, published article

where most of the articles found are from Halal Journal and Malaysia where

4 Ambali & Bakar (2013)5 Wilson & Liu (2010)6 Aziz & Chok (2013)

8


government has taken keen interest in establishing a regulatory authority

named JAKIM to ensure the quality according to Islamic rules.

1.2 Problem Statement

Many studies have been conducted to analyze the impact of halal

certifications and processes on traditional supply chain. It is evident from past

research that Muslims tend to have concerns over consumption of meat and

other food items without having halal certification and their supply chain

operation.7 The research concluded their findings about the essential

processes needs to be taken into account from farm to fork transportation and

highlighted the following effects; governmental support, increase intensity in

competition, social responsibility, contamination of products during

transportation and storage facilities and willingness to pay (WAP) in Muslim

consumer in search of Halal products8. This study has tried to analyze the

challenges of Halal meat supply chain in Pakistan as no preliminary research

has come across me while analyzing this sector. The significance of this study

is to give the organization an over-view of Halal processes which should be

considered before implementing it practically so that they can maintain and

establish a better relationship with their customers without facing

interruption’s as well as they can increase the visibility of their supply chain

according to guidelines provided by the Islamic Sharia.

7 Tieman (2012)8 Kamaruddin (2012)

9


1.3 Research Objective

The objective of this study is to outline the operations performed by

organization which contributes in minimizing the contamination of product

according to Halal guidelines with regard to Supply Chain Management.

Guidelines and principles are essential for the Halal integrity of Halal

supply chain

Halal logistics from a supply chain point of view

To identify the hurdles arising in implementing Halal Supply Chain.

To identify the impact of technology in traceability and tracking of

meat in Logistics.

Impact of certifications & Halal compliances play when you deal in

B2B

1.4 Research Questions

This study has tried to find out the different operations performed

through Halal certifications by organization. A framework will be developed

and gaps will be analyzed which will make it easy to understand the variables

effecting Halal Supply Chain and what organization values most while

maintaining integrity of meat to the end consumer. Some of the variables are

listed below:

1. Which guidelines and principles are essential for the Halal integrity of

Halal supply chain?

10


2. What is Halal from a logistics, supply chain point of view?

3. What are the financial hurdles in implementing Halal Supply Chain?

4. How technology can create an impact in traceability and tracking of

meat in Logistics?

5. How much impact certifications & Halal compliances play when you

deal in B2B?

1.5 Scope of the Study

This study is carried out to second the concept of Halal and in that

analyzing the Halal Supply Chain and its overall impact on procedures been

taken into account through certifications provided by authorities. In addition to

it, it also scrutinizes factors having major impact on traditional supply chain

with Halal operations. Importance is given to Meat providers operating in

Karachi and the way their resources are used in purifying meat. This study

also benefits the meat consumers – by having a sense of satisfaction on

product’s integrity, government – by establishing a central Halal council in

Pakistan and industry – by increasing their performance through technology.

11


1.6 Limitation of the Study

The limitation of this study is it’s only in food sector and analyzing the

meat providers in food only in Karachi region. Moreover, such findings can’t

be generalized in different industries or varying by geographic boundaries.

The objectives can also be completely different depending on culture and

support provided by government and may also have different outcomes.

12


Chapter # 2

13


2.0 Literature Review

2.1 Theoretical Background

Halal is an Arabic word meaning “permitted”. According to Islamic law, its

most frequently used with refer to food permissible. The opposite of it is

known as Haram which means “unacceptable”.9 Both terms halal and haram

are used particularly to relate food products, cosmetics, ingredients used etc.

The basics of Halal and Haram are decided according to the Holy Quran and

Sharia.10

Halal logistics is defined as “the underlying obligation of transportation of

meat by separating non halal products from halal cargo in one fleet”. Such

measures are taken to avoid cross contamination from harmful as well as

impermissible items by the Shariah. This is to guarantee a logistics system as

per the belief of the Muslim’s regarding Halal meat integrity along the supply

chain. 11

As per the Sharia guidelines, the traceability is said to be halal when the status

of food particularly in meat industry can be monitored through every stage of

production from the point of origin to the point of consumption. The key

aspect of such technique is to analyze the activities free from unwanted 9 Kamali (2003)10 Lada and Harvey (2008)11 Jaafar et al (2011)

14


ingredients (fluids, chemicals etc.) that can endanger the safety of the halal

meat. Critical control points can be managed through traceability in operations

as well as from the pre-purchase activities so that any suspicious product can

be dealt at the same time and information can be integrated through the whole

supply chain.12

As defined by various researchers, Halal certification is one aspect which

dictates that product is in line with the laws of Sharia and such approved

agencies fortify that the operations are in accordance with the standard

measures allowed by Sharia as well as health safety organizations. Halal logo

creates a sense of credibility in the mind of Muslim consumers. Moreover,

such regulatory bodies must be authorized by a reliable Islamic organization to

avoid any ambiguity by misleading logo and certifications.13

Halal standards are basically defined as the “every Halal meat producer needs

to comply in their own respective countries likewise internationally

recognized halal bodies for trading purposes”. In the absence of a Standard

regulatory body acceptable around the globe by all producers, it has become

more difficult to breach the geographical boundaries without a certain standard

procedure. In addition to it, Halal standards must not neither stringent nor too

indulgent so that any false Halal certifications as well as claiming the non

Halal product as Halal can be prevented.14

12 Norman, Nasir & Azmi (2008)13 Abdul (2008), Riaz(2004)14 Evan (2007)

15


2.2 Empirical Studies

Iranmanesh et al (2015) explored the reasons that have leaded the

organizations to go for incorporating halal principles and perspectives in their

processes. For data gathering a survey was conducted based on questions

regarding foods and drinks that are said to be halal. Respondents were 137

SMEs involved in the production halal food products. By using the

quantitative techniques such as partial least square and structural equation

modeling for getting results. The study concluded that in order to maintain

trust their customers, firms’ needs to follow the requirements of values in

manufacture halal food products.

Talib et al (2015) argued about the barriers in adopting Halal logistics

operation in Malaysia. Exploratory research methodology is applied and to

gather the data interview technique is used. Interviews are taken from four

different logistic service provider firms responses were gathered on nine

questions developed accordingly. Resulting barriers that were highlighted by

the research are internal barriers, inter-firm barriers, firm-government barriers,

firm-authority barriers. In conclusion four causes were identified as the

existing precursor of barriers to Halal logistics, namely, scarcity of Halal

expert, resistant to adopt, no Halal logistics champion, transition complication.

16


Mohammad and Wang (2015) instigated research work on RFID and

its unique usage in identifying halal food items also how can the whole supply

chain process be traceable by employing this technology. A mathematical

model naming “Halal meat supply chain” was developed in order to

understand the working of this technology. Into different categories the model

further broke down to have phase by phase analysis. Conclusion of the

research suggested that technology like this can be really beneficial for not

only the producers of meat but also consumers are highly motivated in

knowing clearly about what they’re consuming.

Ab Talib et al (2015) discovered the critical success factors of the

upcoming concept of the halal supply chain management. The factors that

have been identified by the researchers are government support,

transportation, information technology, human resource, halal certification and

halal traceability. This study only focuses on the factors of halal supply chain

management. It’s concluded that the above CSF’s are serious concerns in

implementing Halal supply chain. Any of the above highlighted being ignored

can suppress or break the integrity in consumer for searching halal products.

Poniman et al (2015) purpose of this paper is to explore the growing

importance and execution of traceability systems in the Australian Halal food

industry. For the methodology empirical qualitative approach was utilized to

inspect these issues deploying in-depth interviews. The study concluded that

17


the joint activity between the firms generates the effect of a network, where

the value generated is much more than that which the firms alone can create.

Talib et al (2014) inquired the sensitivity of halal logistics in

accordance to the Malaysian environment by taking help of PEST analysis.

Since this is totally a new research paradigm in food supply chain explorative

approach has been applied so as get deep into the subject. For generating

results external factors evaluation also known as matrix methodology is used.

It is suggested by the research that more work should be done in this sector

like educating and developing a work force that have the complete knowledge

of halal logistics to have better chances in making Malaysia halal hub for the

world.

Zulfaqar et al (2014) develops a general framework for production,

handling, carrying, transportation and other related activities for halal food. A

qualitative approach has been applied in order to explain a number of factors

like halal integrity, certification, commitment, and trust for which past

researches are taken in to consideration on similar accounts. The research has

concluded that all the parties in the supply chain, downward and upward

channels, must take collective responsibilities in order to ensure the protection

of the Halal food products from being polluted or coming in contact of

harmful substances, whether deliberately or not on purpose. It is impossible

for any single channel member to oversee all of these activities.

18


Alqudsi (2014) questioned the level of demand and awareness among

consumers for the halal meat products. The study has taken into account the

consumer, cultural, and religious perspectives to define the criteria that what is

actually halal. An online survey was conducted in Australia, Malaysia, and

Singapore, the questionnaire was based on the likert scale. For analysis

descriptive quantitative techniques were used. It has been recognized from this

study that there is a lot of potential demand for halal supply chain and

logistics. Many of the respondents are aware of the halal prerequisites and are

willing to pay a high price for halal meat products.

Ambali and Bakar (2014) investigated the responsiveness of both

Muslims and non-Muslim consumers towards food item and other products

that are said to be halal. For Muslims the factor of halal is of more importance

as well as quality, hygiene, safety whereas for non-Muslims everything is

important except halal. For data collection convenience sampling was used, a

survey was conducted from 210 Muslim respondents of mixed attributes like

working, unemployed, and students. Using PLS technique findings were

generated on three characteristics responses were gathered religious beliefs,

exposure, health reasons. The research concluded that increasing demand for

halal food items is the result of growing awareness in Muslims consumers on

several indicators mentioned above, which is why more importance should be

given to food regulations, halal logo, trustable halal certification bodies so as

19


to accommodate the emerging demand of Muslims and non-Muslims

consumers.

Ngah et al (2014) analyzed a model framework in order to develop a

better understanding of warehousing concept of supply chain in accordance

with the sharia guidelines so that the concept can be named as halal

warehousing. The basis of the model was developed on five key variables such

as halal warehouse, complexity, awareness, top management’s attitude and

suppliers. The sample population for this research was on the organizational

level and more specifically managerial level positions; for responses a

questionnaire was formulated based on above mentioned variables and was

distributed among 200 personnel out of which 140 responses was of usable

form. By using structural equation modelling technique findings of the study

were generated. Many findings of the research contradicted previous research

findings. In the end, conclusion of the study gave a new direction in early and

higher involvement of supplier in warehousing which will ultimately create

satisfaction among halal meat producers and their customer as well.

Shahijan et al (2014) investigated into the behavioral aspects and

practices of retailers in the context of handling of halal meat. For the research

purpose several variables were taken into consideration which encompassed

all the characteristics from the retail side. Collection of the data sample was

carried out on the basis of questionnaire a total 178 questionnaires were

returned to be helpful in generating the results. Analysis was carried out by

20


partial least square method. It was found out that the performance of retailers

is very much dependent upon variables like behavior, belief, attitude, and

norms of retailers. In conclusion its was emphasized that in order to increase

the value added features and effectiveness halal meat retailers and their

suppliers should consider and implement more halal practices on as much

stages as possible.

Awan et al (2014) highlighted the factors and their effect on the

intention of purchase by the customers for halal food products. Several

variables like attitude, religion, certification, behavior, and norms were used

by the research to develop the survey instrument. In total 300 responses were

gathered from 4 different cities of Pakistan. With the help of confirmatory

analysis the research identified the especially in Pakistan customers are more

inclined towards the general society perception or word of mouth about Halal

products and very little importance is given to the religious aspects of the

products intended to be halal. In the end it has been concluded that although

their not much awareness in consumers of halal when making purchase

decisions it is the utmost responsibility of the marketers to create campaigns

that can consumers more knowledgeable and wise in their purchase decisions.

Mohammad Syazwan (2013) investigated essential components in

Halal Logistics through series of focus group interviews. The results have

been compiled into 5 barriers for Logistics service providers in the Malaysian

industry. Variables probed in this research are issues in implementing halal

21


logistics, integration issues within halal logistics providers, lack of

coordination between Halal authorities and service providers, financial

hindrances in Halal logistics, governmental support & promotions in halal

logistics are the critical factors in implementing halal logistics management

from farm to fork.

Tieman et al (2013) put forward the perception of Muslim consumers

regarding the halal meat logistics. A number of variables are taken into

consideration for this research like transport, level of segregation for halal

meat in supermarket, storage and terminals; the willingness to pay for halal

logistics; and responsibility of halal logistics. For the collection of data sample

questionnaire was developed and distributed to 451 Muslims in both Malaysia

and Netherlands so as to analyze the behavior of Muslims living in different

parts of the world. The results generated by using descriptive analysis

proposed that Muslim consumers regardless of their geographical locations are

very much concerned about what they are consuming is either halal or not as

well as other deciding factors already mentioned above.

Manzouri et al (2013) interrogated about the practices concerning the

lean supply chain and what barriers firms face in this regard. A questionnaire

was developed to gather the data and was distributed among 300 halal food

firms. For data analysis only 61 responses were in the usable form. By using

correlation results were produced. It was observed that many of the firms

around 70 percent are still unable to fully implement the practices and

22


concepts of lean supply chain. Moreover it was seen with importance that

firms don need to hurry up in their implementation of lean supply chain in

order the maintain halal integrity of their food products as well as take the

maximum benefits of going lean supply chain.

Borzooei and Asgari (2013) conducted a research exploratory in nature

and aiming to identify pre-requisites and resources needed to develop a global

hub for halal supply chain operations. This study gathered responses by

developing a semi structured interview questions which were carried out from

3 professionals and industry experts. For analysis of the interviews constant

comparative method was used. The results of this study highlighted key

factors of human capital, R&D, marketing strategy and infrastructure essential

for a country to promote its halal industry.

Du Plessis and Du Rand (2012) interrogated about behavioral aspect of

consumers for taking purchase decision when comes to buying a particular

meat type or food product. This research paper identified key factors that are

decision making, traceability, quality, safety, and origin. For sampling of data

questionnaire was used that was circulated through the email to the audiences.

The research has concluded that while during a purchase of any specific food

item in this case is meat consumers have shown interest in knowing the origin

of food item and its very helpful if they have the idea regarding safety process

form which the meat is coming through.

23


Yahaya et al (2012) carried out a research paper for developing a

modeling framework for the halal products to be recognized by smartphone

application. The study is based more on contextual analysis rather than using

traditional research techniques. So, in conclusion the research focused on the

need of having an application that not only clearly differentiates between halal

and non-halal items also can satisfy consumers for their search of best quality.

Tieman et al (2012) investigates the design of halal supply chain with

respect to halal food supply chain. The data has been collected in the form of

discussion group and focus group. Malaysia, the Netherlands and China are

taken to identify the control and assurance activities of logistic business

process. This logistic business process includes transportation, warehousing

and terminal operation. The findings show that product attributes and market

requirement decide the vulnerability of halal supply chain. The results

conclude that the halal supply chain is different from conventional supply

chain. It required halal policy and specific parameter for the complete supply

chain process.

Talib and Johan (2012) scrutinized the processes and functions

involved when delivering products with halal packaging and what challenges

are faced in doing so. A pure literature review based study was conducted the

highlighted a number reasons and concept that are necessary in producing

halal packaged products. The issues came across by Halal packaging are in

terms of Halal packaging traceability, Halal distribution and storage, product

24


handling, and Halal certification on packaging. Since this study is theoretical,

additional research should be carried out in order to discover more issues

relevant to Halal packaging.

Kamaruddin et al (2012) investigated the essentials of providing

logistical services which are said to be halal and how people react to them in a

way such willingness to pay. The research paper focuses on five key points in

order to generate the findings that are halal logistics, demand, willingness to

pay, costs, transportation cost, logistic administration costs. For collection of

data a questionnaire was made using likert scale and a sample of 221

respondents was collected. The research paper concluded that it’s very much

necessary to understand the consumers (WTP) as well as demand patterns in

order to refine the processes and develop more efficient services to offer.

Tieman (2011) the paper intends to portray the essential prerequisites

of Halal sustenance and supply to guarantee the respectability of Halal

nourishment at the purpose of consumption, which is a commitment for

Muslims. This exploratory research paper has deployed comprehensive

interviews to better comprehend what is Halal, the Islamic sources that are key

for Halal supply chains, and recognize the rules and standards which are vital

for the respectability of Halal supply chains. Halal production network

administration is in light of staying away from direct contact with Haram,

tending to the danger of spoiling and guaranteeing that it is in accordance with

the impression of the Muslim.

25


Jaffar et al (2011) explores the innovativeness and creativity in halal

logistics providers due to enhance in Muslim consumers in the world and also

of the fact that Non-Muslim consumers also compliance the halal products. A

Qualitative research comprising of two leading logistics providers in Malaysia

was conducted with variables such as ISO certifications for hygiene and

cleaning factors, consolidation of materials at freight’s terminal through halal

standards, halal warehousing and halal reverse logistics was taken into

consideration. The results pointed out a significant presence for halal

commodities in consumer and they have concluded that a fully dedicated

logistics service can upscale the demands of market but its tracking and

traceability is very difficult because they can only provide guarantees until the

product is not transferred from their custody.

Marzuki et al (2011) aimed to assess the restaurants that said to be

halal and certification that they carry with them. In order to take a more in-

depth view of halal restaurants the interviews were taken from the managers of

respective restaurants, before that restaurants were segregated into three

groups namely halal certified, halal claimed, and non halal. A total of 33

interviews were conducted from these restaurants. During the collection of the

sample a number of variable or factors appeared to be more relevant and

important for meeting the halal criteria like knowledge of halal in the staff

members, halal practices, types and authenticity of certifications, moreover

perception of customers was also taken into account about that particular

26


restaurant. In conclusion it is implied that managers have high expectation

with regard to halal certifications for increasing and establishing awareness in

mind of Muslims and non-Muslim consumers.

Wilson and Liu (2010) examined various factors playing an important

role in decision making of Muslim consumers for purchasing and consumption

of halal food products. This research is based on the systematic analysis of

literature and personal observations on variables like halal brands and

marketing programs. The findings of this research suggested that variable of

halal must be defined in more detail and consumer perceptions should be

addressed in the marketing campaigns.

Norman et al (2009) investigated the phenomenon of customer

willingness to believe RFID ensuring products halal status. A conceptual

framework has been developed by taking previous researches into

consideration and a questionnaire was developed consisting of 11 questions

based on 1 to 5 likert scale. Almost 92% of the answerers showed positivity in

this regard of using RFID devices for making sure those products are halal. It

is highly recommended by this research that steps should be taken in making

this technology of RFID at the disposal of industrial sector as well as making

consumer buying decisions for halal products convenient.

Lada et al (2009) investigated the phenomenon of growing importance

of halal products and on what basis those products are selected by the

customers. For data collection a structured questionnaire was used to draw out

27


responses from consumers applying a convenience sampling technique. In

total 485 responses were collected. Theory of reasoned action was also used to

observe the halal product usage among consumers in Malaysia. The research

findings concluded that the sellers have to ensure that when manufacturing

and encouraging sales of halal related products, at the same time attempt to

add in the element of thoughts and emotions in their marketing operations.

Bonne and Verbeke (2009) focused on the public trust level of

Muslims living in Belgium for sources of halal meat and their assurance in key

indicators and institutions for monitoring and controlling the halal meat chain.

Data collection was carried out as from four different types of consumer with

the help of a survey with 367 Muslims. Research findings disclosed that

Islamic certification bodies and especially the Islamic butcher receive in

general believes to be more important for scrutinizing the halal status of meat,

and for exchange of halal meat. The research concluded the indifferent

consumers are undecided about who should monitor the halal status of meat.

Concerned Muslim consumers displayed higher belief in Belgian than in

Islamic institutions. Confident consumers affirm a clear first choice for

Islamic bodies to supervise the halal processes.

Lam and Alhashmi (2008) examined the planning of halal food supply

chain and certification systems. A model was constructed utilizing different

features of halal supply chain like pseudo-synchronous interactions among

different indicators, complex interaction (agents of halal supply chain) and

28


feasibility of certification organization. The research concluded that the actual

process of implementation is contingent to external factors such as behavioral,

market trend, ethical, social factors and economical.

Botonaki et al (2006) probed consumer attitudes and behavior towards

products consisting of organic matter. The research revolves around two main

concepts that are system of integrated management (SIM) and consumer’s

willingness to pay (WTP) for halal products. A survey was conducted in order

to collect responses for analysis of data principal component analysis (PCA)

and varimax rotation techniques are used. The research concluded in the end

that the principle inspiration for customers to purchase halal items is that they

are recognized as better than the routine additionally shoppers are more eager

to pay high price for halal items.

29


Chapter # 3

30


3.0 Methodology

3.1 Research Approach

The approach used to carry out this research is qualitative. The

qualitative research is “the process which analyzes the questions of how and

why on the happening of events”. It’s basically used to explore, describe,

translate and interpret the natural process occurring in the social world.15

3.2 Research Purpose

The purpose of this research is Exploratory, in which we also analyze

the new concepts in the area of our research. Exploration helps researchers to

plan and design their methods prior to conducting their data which minimizes

the chances of error. For this reason, most researchers are prepared to face

possible predicament but they are loaded with possible solutions at the same

time. 16

3.3 Research Design

The research design that has been applied in this study is

phenomenology. Phenomenology can be explained as a research design that

“specifically deals with the understanding of behavior from the individual’s

15 Cooper & Schindler (2006)16 Cooper & Schindler (2006)

31


own point of view”. This research design supposes that people will do

something that is irregular and contrary to already setup norms.17

3.4 Data Source

The data source for this study is primary. For data collection,

interviews will be conducted from the managers of supply chain in different

meat providers in Karachi.

3.5 Target Population

Target population for this study is local meat providers companies

located in the region of Karachi.

3.6 Sample Size

Primary data has been used to bring about this study. Professionals of

managerial level managing supply chain were contacted from different

processed meat providers functioning in Karachi for data collection.

3.7 Data Collection Technique

The technique used to collect data in this research is comprehensive

interviews. Such interviews are conducted when “interviewer wants to have a

detailed discussion about a particular topic with a person operating in the same

field in which research is carried out.” In general, structured interviews are not

17 Colin Neville (2007)

32


practiced however in peculiar situations contents of interview are previously

decided by the interviewer.18

3.8 Sampling Technique

Purposive sampling technique has been used to carry out this study. In

case of exceptions, a non-probability is used and applied while focusing on

sample of pre-defined groups. It can be best described as “a technique used to

identify participant typifying a target population and where researcher implies

his/her understanding about the topic”.19

18 Colin Neville (2007)19 Cecilia Elizabeth (2007)

33


Chapter # 4

34


4.0 Data Analysis

This chapter will focus as an illustration of interviews been conducted

from different meat providers particularly in private sector to key-out the role

of halal processes and integration that are operating in Karachi. Also this

chapter will help to determine and explain the possible challenges and gaps

that were notifies by the respondents.

This study is comprised of three interviews from different meat

providers and having a possession of abattoir. Interviewee’s were selected

from managerial level positions that are directly playing role in operations in

their respective organizations. For interview details please see Appendix 1.

4.1 Merger of Halal Compliance’s:

Compliance came across as the most important factor while operating

in Halal business and especially in meat business because certain standards

must be met in order to penetrate market because of the consumer awareness.

Moreover, strict guidelines have been established by JAKIM a Malaysian

Halal standard and almost all the respondents are certified from central body.

In Pakistan, Dar-ul-Ifta by Jamia Mansoora and Jamia Ashrafia are the

central bodies for issuing compliances and Sharia compliance officer makes

sure that the operation is run smoothly. One thing needs to be noticed is that

the Pakistan standard 3733 has become almost redundant and least valuable

because upgradation of such standard hasn’t been done from the last 3 years.

35


One possible solution is that it can be merged with Malaysia’s body

standard so as to increase the worth of document and subsequently the world

can recognize it as a Pakistan standard too which will help local exporter

ultimately.

4.2 Curtailing Inspection Criteria

To maintain the integrity an audit is been run by different audit

companies mainly SGS in Karachi to examine the quality and halal standards.

Inspection helps in maintaining a certain standard and allows following a rigid

guideline for hygiene. It also minimizes the risk of contamination by storing

different meat varieties at a distance so that handling as well as direct contact

with surface is eliminated and even the red offal’s are stored separately so that

blood cant deteriorate meat after washing.

Anti-bottom inspection is carried out once the animal is slaughtered in

which its made sure that the animal was healthy and is innocuous for

consumption through different test’s under the team of veterinarian.

According to guidelines an animal shall not be used for production if given

antibiotics because certain particles are harmful for a human body so a certain

ambient is given to animals before slaughtering. Subsequently, an animal is

injected, that animal shall not be slaughtered until 15 days because of certain

residuals and another inspection is run before slaughtering. This increases

examination time which is a big factor in production because it not only

36


increases handling cost but many a times such animal can be harmful even

after production because meat stales more quickly than normal.

By the use of technology and early supplier involvement such

problems can be curtailed in their initial stages by training suppliers about

proper feed of animal. Automated machines can be used with different

equipment’s and by providing vaccination to the suppliers this inspection

criteria can be made more useful and less time consuming so that production

don’t observe any hindrances or break at any part.

4.3 Installation of Reefer Storage Facilities

In terms of meat what matters the most after production is the storage

of meat chopped at a certain temperature to maintain its freshness throughout.

Reefer storage facilities are common in retail market due to increasing outlets

of companies and availability of resources but unfortunately in export market

it’s exactly the opposite in Pakistan. Private sector has its own chiller vans

used for transportation (mainly private carriers) because the installation of

chiller’s is heavy investment and due to less governmental support, companies

are making it on their own the way to tackle such problems.

Logistics is an essential part and due to ambient/temperature operated

vans it has become the most important. All the respondents have emphasized

mainly on elimination of direct contact and cross contamination in storage and

preservation procedure but while working in export market there isn’t any

37


facility where the product can be stored if shipment is delayed so for that

purpose chiller vans are used as temporary storage facilities which in itself

increases cost.

Correspondingly, less usage of technology such as GPS has

exacerbated the situation because any chance of increase in visibility has been

turned down as to know where the particular product is heading towards. Even

companies have to train their labor (technicians) in case of any malfunction

during shipment so that product can maintain its integrity and freshness and

true taste. This is the main reason why Pakistani exporters have not been able

to enter the European market.

4.4 Hindrances in Traceability

While working in extremely fast moving consumer market, traceability

is very important because it overlaps the degree of sincerity of that particular

company with its consumers. Around the globe, extreme measures have been

taken for that purpose and technology is been used highly so as to trace the

point of origin to the point of consumption but Pakistan is lacking behind the

world. Potentials are there but heavy finances are required to install such

facilities all over and it can’t be don’t without governmental support.

Meat producers in Karachi are using ear tagging system for traceability to the

supplier whereas in Brazil and Australia RFID is used as centralized base of

information exchange. Ear tagging or coloring the skin of animal is used to

38


trace the supplier so that it can be known from whom it was purchased. It also

helps in identifying the lot if any disease is found in animal and it’s

transformational so that supplier is accountable.

Once the meat is stored is container, the visibility of supply chain

decreases drastically because of less usage of technology and companies do

face problems in calling back their product because of low exchange of

information which is called Reverse Logistics. So, government should

establish certain parameters and finance these institutions especially for export

market where traceability is regarded as key factor of any product whether it

can be pre-purchase or post purchase activities.

4.5 Barriers in Implementing Full Quality Assurance

Halal is a brand which creates barriers in training of labor, hygiene

factor and trust issues. Training of slaughter man, handling of material,

holding cost, short shelf life, distribution on time needs intense consideration

and these are all the factors that creates integrity in the minds of consumer.

Slaughter man needs to Muslim first of all and when there is a machine

operated slaughter house or abattoir, the availability of technical staff is

foremost in following guidelines of compliances.

Quality assurances are directly proportional to cost in terms of

production. Usage of chiller facilities with intense examination of every part

of an animal after slaughtering and even before slaughtering increases

39


operational cost. Furthermore, dealing in export market has its own cost

because of custom documentation, proper examination of product. Such

barriers can only be minimized by proper training of employees and even of

their technical staff. The freight forwarder must be agile in completing the

proper documentation before time so that time cost can be eliminated.

On the other hand, stamping the Halal logo is essential before

movement of product from warehouse, so that ink is also been procured by

Dar-ul-Ifta in Lahore so it takes time when companies run out of stock. The

whole production is been stopped due to such a negligence by planning

department. In addition to it, while these meat providers have installed such

state of the art facilities so the cost of production has also increased this can’t

be built-in to their product because of cultural heritage.

Having said that, though past researches have concluded that Muslim

consumers are willing to pay more but it’s a niche market segment with a

share of 10% of the total population according to Al-Shaheer.

4.6 Increasing Visibility through Information Exchange

The exchange of information is an essential of any supply chain and

notably when you are working in an FMCG industry. Unfortunately, a need of

centralized information system is recognized but it hasn’t been implemented

due to heavy finances which has increased the barriers for dealing in

international market. Subsequently, the Pakistan Standard Code 3733 for Halal

40


meat also has no stipulation for the pre-purchase form the supplier which has

created a hiatus in implementing such a system and tracking the quality

measures.

Such centralized information system will help obligatory to create

events and portals of supplier once bidding is done and they compete on

different factors such as pricing, delivery time, services, quality. Alternatively,

it will help in selecting the best supplier and also supplier performance

evaluation can be done of different supplier and categorizes them into

different classes depending on the nature of business and KPI’s set by

incumbent organization SOP’s for their goals in purchasing and supplier

evaluation.

It may also classify different suppliers according to the Grades system

or classes through scoring on set KPI’s for example: Class A, Class B and

Class C suppliers. It can also help organization’s goals and even suppliers so

as to compete with their competitors as they are aware of their inefficiencies

through classifications. In recent times, the effective use of information

sharing have helped in creating relationship of trust and mutual benefits by

finding the right or best supplier and helping procurement department either in

terms of bulk buying enjoying discounts or extending their credit terms.

41


4.7 Establish a Regulatory Body

To have a purview on the operations and pricing Pakistan needs to

establish a Regulatory Body for Halal products at federal level and to enter in

the international market. Pakistan being ranked the 9th biggest exporter of beef

is still running without a regulatory body or council which shows the lack of

interest of the incumbent government.

More so, a centralized body will ensure competition and pricing of the raw

material just like in Malaysia and India. In fact, such bodies can help in

establishing stringent regulations for import meat or animals procured from

different countries which will eventually help this industry to grow with high

barriers on quality.

As a matter of fact, it will not only create market more agile but a

legislative body will minimize redundant supplier’s to improve their quality

through proven standards. Such monitoring body should help in developing

policies relating to:

1. The operations of the certification body.

2. Financial position of the companies as well as of the certification body

shall be supervised.

3. Contractual arrangements should be made within supplier and in

manufacturers.

42


4. Set policies and procedure can be monitored as per International

export guidelines.

5. Marketing of Pakistan’s Halal products can be done with a team

consisting from different industries to improve the quality.

43


Chapter # 5

44


5.0 Conclusion

In the modern era, Halal has emerged as a brand used to maintain

quality, hygiene and trust factor in order to reach long term financial and

health related objectives. Previous researches have shown positive impact of

implementing quality and food safety measures20. The major reason of Halal

certification and compliances is to ensure overall operations being carried out

in accordance to the guidelines of the Islamic Sharia.

This research paper has been carried out on processed meat providers

functioning in Karachi. The challenges has been identified by inscribing five

key questions of factors, Halal integrity in Supply chain, Halal logistics, and

financial hurdles faced in execution, Halal certification and technology usage

in traceability. The above factors have been already discussed in detail with

respondent’s experiences and they can be used as standard for further

researches.

In addition, the responses collected from interview of professional’s

working in meat industry implies that firms are taking serious steps to protect

processed meat in terms of partial technology and various elements. In

contrast, the challenges faced include installation of reefer storage facilities,

barriers in implementing full quality assurances, no proper information

exchange and absence of a regulatory body.

20 Botonaki(2006)

45


In 2014, a bill was moved in Parliament by Ministry of Industries for

establishing a Halal Authority at Federal level. Now, provincial government of

Punjab has set up an organization called Punjab Halal Development Agency to

prescribe the standards and processes for certification of halal products.

Moreover, strategic sourcing with suppliers has also become difficult because

of unawareness of stock at critical points or in emergency circumstances.

On the other hand, low literacy level in rural areas where most of the

purchasing is carried out is also a tormenting problem because of hygiene and

environment controlled vaccinations. As a result, Pakistan while being the 9 th

biggest exporter of beef is restricted to operate and trade in European market

because of unavailability of pre-purchase activities.

5.1 Recommendations

In the final analysis the results concluded that still there are difficulties

in implementation of Halal and the challenges faced can be turned into

potential’s with respect to industry objectives. Below are some suggestions for

the government and equally important for the meat providers operating in

Karachi and likewise local exporters.

Given these points, more researches are required to probe health and food

safety measures and it’s also important to identify downward stream of the

supply chain (including retailer and consumer) views in the same aspects of

Halal cognizance perpetuating in the Muslim world.

46


1. All parties in the supply chain, downstream and upstream, must take

individual and joint responsibilities to protect the Halal food products

from being cross contaminated, whether intentionally or

unintentionally.

2. Producers should also focus on foreign market especially capturing the

EU market by fulfilling the prerequisites of destination countries by

making available pre-purchase information.

3. One major challenge is to ensure the availability of auditors in Karachi

rather than calling from Jamia Mansoora, Lahore which not only

increases time but the operational costs.

4. Likewise Malaysia, GOP should also promote local standards in

international market so as to increase the trust factor for Muslim

population settled overseas.

5. Electrical stunning is allowed by JAKIM by conditioning of

monitoring of competent authority but in Karachi specifically

unavailability of such authority has created doubts in the operations.

6. The segregation must be either in racks system or compartment system

or by proper labeling. It should also be applied in employees handling

materials, equipment.

7. 3PL services with proper dedication for Halal products can be formed

which will not only increase the availability of product but

organizations can also outsource their non-competency which will

ultimately fulfill Halal product objective.

47


8. Government and certification bodies should work closely and training

and knowledge sharing seminars must be organized in order to educate

key players about Halal products with rapid responses in changes in

demand.

5.2 Future Recommendations

1. Further research can be proceeded in the direction of customer

perspective their thoughts and complaints if any regarding halal meat.

2. Unbranded meat producers can also be taken into sample population to

know about their approach in the matters of slaughtering, handling and

what hurdles they face in making their business.

3. Another aspect that needs to be highlighted is of overall food safety

and its halal nature like vegetables, fruits, cosmetics and other

processed items.

4. More importance must be given to producers of meat and it by-

products operating outside Karachi region as well as in different

Muslim countries that have already established meat market.

48


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Appendices

55


7.0 Appendix

7.1 Appendix “A”

Q: Which guidelines and principles are essential for the Halal integrity of

Halal supply chain?

We deal in raw product not a finished good so for a raw product it becomes

very simplified when it comes to Halal implementation but there are

compliances and we are certified by JAKIM for our functionalities of Halal. In

process industry every product needs to be evaluated even if it’s a flavor, its

CO Etc. but when you are dealing in raw meat so we have to ensure that the

animal was slaughtered in accordance to the guidelines of the Shariah.

Basically, Halal standards comes from different region for example Malaysia

has JAKIM a popular standard then we have different Madarsa’s (local

standards) we do we have a compliance with them. An audit is been run by

different companies such as SGS but it’s a Quality audit company. It audits the

way an animal is being slaughtered, its handling through-out in that process,

and the ambient for that product wasn’t contaminated. In our company the

whole process is being carried out by a factory hand slaughtered then we make

sure that direct contact surface of the meat shouldn’t be done and for that

purpose we use rawlin cotton to wrap that meat produced till the time it

reaches to the cutting tables. So throughout this procedure either the meat is in

hanging position or wrapped in rawlin cotton until it reaches to the chiller vans

56


so we have to run a cold supply chain through-out this process till the time it

reaches to the shopping bags of the customer.

Q: What is Halal from a logistics, supply chain point of view?

A: Contamination comes in with different outcomes like meat having a direct

contact with surface or the storage of meat with any other product even with

chicken so as to minimize the chances of cross contamination. We can’t have

the same storage chiller for red meat and fish so we have different chillers and

storage facilities for different product category so it has a different process

where the cross contamination is minimized. We have different fleets foe

every 3 raw product so it doesn’t escalates the chances of contamination, then

its stored in distance so as the blood of 1 product can’t be mixed with another.

So basically, this is what happen when you try to minimize the chances of

impurity with different product categories, contamination with any material

for that matter so you can’t store anything or any material even the offal’s

can’t be stored because its pure red blood.

Q: What are the financial hurdles in implementing Halal Supply Chain?

A: When we talk about implementation of Halal process it brings itself

Quality in it which escalates cost. Halal & Quality are combined and definitely

cost increases when you take measures to ensure quality and we can’t built in

that cost in our product prices because that will create a negative impact in the

end user so certainly market compatibility issues are there because people see

57


us in a certain price specially in Pakistani market and all these standards have

their own price.

Q: How technology can create an impact in traceability and tracking of

meat in Logistics?

A: Traceability is one component of Halal and Quality but it’s very costly

because RFID’s code is linked with animal so to trace it in overall process its

very expensive and you need heavy finances to run such kind of a process

because this industry is a not even an FMCG its very very fast moving

consumer good because it’s extremely perishable so once packed it’s very

difficult to recall it. But yes, we do recall it if the whole lot has been found

spoiled or anything and then we try to sell it on discounted offers after having

clearance from our quality department or we use it in feeds of animals or

dump it if totally found lousy. Yes, we discuss such projects but we don’t

discuss in terms of Halal but because of Quality measures and customer

satisfaction. Yes, traceability is there globally but in frozen generally fresh

meat doesn’t need that strict traceability.

Q: How much impact certifications play when you deal in B2B?

A: Massive, you can’t deal in export market without certifications because the

audit process binds to have such certifications and proper documentation, so it

gives us process compliance. In the last 5 years or so we have seen drastic

changes in meat market, at first we didn’t have any B2B customer but now it

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has expanded and quality certifications is a major factor for such a boom. We

have our NIMCO as our customer and they purchase mince from us for their

fired items so he’s now demanding us to write a formal letter on our letter

head as a MeatOne customer so he can build a customer confidence so yes

certifications play a critical world especially in a world of globalization.

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7.2 Appendix “B”


Halal supply chain?

In Al-Shaheer what we have done is that we have formed our own Sharia team

headed by Mufti Mujeeb then we have Sharia advisor Mufti Farhan, then Me

Sabeen Mehmood as Sharia Compliance Officer because according to JAKIM

it is mandatory to have at least one Sharia compliance officer at the facility.

He/she or would be responsible for any issues during the operations. We have

merged PS-3733 and JAKIM commonalities into our checklist so as to

monitor the operations from initial to final stage. As we are certified from both

countries Pakistan and Malaysia so we have merged the guidelines of both

certifications so as to save our time and increase the worth of the document.

For example HCP-1 ensures the source of the product as halal. In HCP-2 an

anti-bottom inspection is carried out to examine the body temperature, or any

food or mouth disease in our animals.

Antibiotics is usually given to animals that are required for increased dairy

production for meat its totally the opposite because muscles of an animal takes

time to grow so the operations doesn’t allow us to wait until those hormones

start effecting. In meat production its only permissible to give antibiotics in

diseases that can only be cured by such medicines even our suppliers

guarantees us that present cattle are disease free. Even after giving the

60


antibiotics where it is necessary the waiting time of that particular animals is

fifteen days because there certain residue in meat which are harmful for

human body. After that a veterinarian carries out thorough inspection before

slaughtering the animal.

Before slaughtering the animal a minimum rest of twelve hours is necessary as

per the guidelines of JAKIM so that it covers travelling etc. because the

negative effects are huge due to biochemical changes due to stress and they

are very harmful for meat consumers. So a second anti bottom vet is

performed to ensure a disease free animal.

While slaughtering there is checklist which is necessary to be realized for

instance, sharp knife, slaughterer must be Muslim whereas, JAKIM states that

he can even Christian or Jew. Further the company’s dictates that a takbeer

before slaughtering is recited and the animal must be facing qibla, and all the

veins must cut through as prescribed the Islamic sharia. Another condition is

that the animal cannot be offloaded until its complete death and it certain

feature must be evident for example eye color, tongue coming out of the

mouth, body temperature or body becoming motion less. After being

slaughtered further process is to remove the skin, and medical inspection is

carried out while removing of the head as the disease are reflected through

head in an animal. If there are any signs of any harmful disease then the whole

animal will be rejected and buried as per the condition of JAKIM for disposal

of waste materials. For meat cutting brisking procedure is followed is either

61


half or quarterly chopped for export requirements then washing is done and

meat is stamped with halal logo which then again is procured by “Jamia

Ashrafia” and then it is stacked in chillers until its totally dried from the

outside. After this we wrap the meat in Rawlin cotton sheets and labeling is

done having a 10 day expiry but according to PCSIR only we are certified for

a shelf life of 15 days condition to temperature and ambient.


In logistics cross contamination is avoided through making sure that it is not in

contact with any impure/harmful materials even the red offal’s are stored

separately. Still we don’t use any kind of GPS technology so we ear tag the

animals. GPS technology is highly expensive and as an exporter our freight

forwarders do have a GPS tracking system so we can track our products at

live. Halal doesn’t come alone it brings quality with it so for quality assurance

we can track through animal number or supplier code. For distribution

purposes we use the tagging on animals legs and shoulders so that we can

know where that particular product is heading towards. We are also training

our suppliers in different location for traceability purpose so as to increase our

visibility.

62



meat in Logistics?

In Pakistan the concept RFID and technology of RFID is still not fully

implemented only few MNCs are using such technology there are for few

standards developed in Punjab side but its implementation is arduous due to

low literacy level and that it’s an expensive project because RFID’s are linked

with a system where the whole information is centralized. Al Shaheer is also a

part of that team striving to bring such technologies but barriers are high and

such issues restrict us from entering in European market because it demands

the pre-purchase of livestock.

According to the set protocols of our company if an animal is identified with

carrying a disease, it is returned to the supplier. Moreover there is established

process of our own in which color tagging and holding is carried out just to

make our traceability system more effective. By tagging the animals according

to the color designated for a specific supplier traceability measures are taken

into account so that we know what provided by whom in case of adversity or

return ability.


Hurdles do come in when you are taking about quality and halal is a brand

itself so yes financial hurdles do come in when we talk about Halal because

our promise is hygiene and natural process slaughtering so we do face hurdles

63


not only financial but operational also like training of slaughter men etc.

talking about finances so yes we have to take extreme care of contamination or

impure remnant so yes they do come in but they are curable enough unless

there is a breakdown in our operations or facilities because our chilling system

is what makes the product curable to consume.

Q: How much impact certifications & Halal compliances play when you

deal in B2B?

No response

64


Appendix “C”


Halal supply chain?

To ensure production of healthy chicks we even raise their parents with an

environment controlled poultry houses we have a team of doctors which

ensures their health throughout this process. Halal is an integral part of any

company operating in Muslim world and even in Non-Muslim region because

of the vast spreading of Muslim population. So halal is basically part of

quality which ensures the religious side as well as from a business point of

view hygiene and trust factors which essentially is a win-win situation for both

the consumer and the producer. Now the world has taken serious measures and

there are certification which ensures the operational process through internal

audit by different compliances and we are certified by Darul-Ifta by Jamia

Naeemia and Jamia Ashrafia and these certifications make our processes

Halal.


We have our own fleets of logistics which enhances our visibility of our

products even in a container and because chicken meat is highly demanded by

consumers so we have to be very agile because competition is increasing.

Once the product is packed and stacked in container so we have to observe a

certain ambient and temperature for preservations otherwise it will start to

65


appear fluffy so yes for that we have chiller container operating at -6C but

GPS technology is expensive so we can only exchange information from the

operating room where the order has reached. In case of malfunction we have a

technician with that fleet so that it can be corrected then and there but

definitely it hurts in our kpi of otif. If a serious problem occurs than we have

to move that product into another container which increases our handling cost.

In chicken meat industry use of antibiotics is minimum yes normal vaccination

is done in the initial stages of chick so as to cure it from diseases because it’s a

very very fast moving product so antibiotics are used in rare case and it the

repercussions are high by the use of such vaccine. We have our own farm so

chickens are raised in highly hygienic environment so there is a very little

chance of birds getting diseases and even if they do get it we don’t use them

for production because of our protocol.


No response

Q: How much impact certifications & Halal compliances play when you

deal in B2B?

Certifications have a huge impact on consumers especially when you are

dealing in export market because the legal implications are so tough that you

have to be certified from a certain body operating in your region whether its

halal or quality or HACCAP but in retail market now its evolving more

66


towards such certifications because of the use of internet and people gaining

knowledge which actually is good because you don’t want to consume

anything which is harmful and then you have to pay for it as well. We have

our customers forcing us to show the required certifications or documents

before starting business and this is the reason we haven’t captured a large size

of European market because of inflexible legalities from them. Now

companies are focusing more towards this point and hopefully it will be a

turnaround in the next 3 years or so.


meat in Logistics?

The technology which we are using is coloring our chicken; we place a spot on

their skin with a designated color so that we can trace it rather it’s a procedure

not a technology. RFID is expensive and private sector can’t implement it on

its own for that we need governmental support. Most of the countries are using

this technology for traceability and tracking but in Pakistan there has been any

effort from either side for the use of such technology because to run such a

project you will be in need of high finances with highly technical people

because it’s kind of like a centralized information exchange where you can

trace that this bird was procured by this supplier form this region and that in

forward distribution the information will be at live so the communication gap

also minimizes by such projects but for that you need governmental support.

67


Q1 Which guidelines and principles are essential for the Halal integrity of Halal supply chain? Initial Coding Focused Coding

Respond 1

We deal in raw product not a finished good so for a raw product it becomes very simplified when it comes to Halal implementation but (there are compliances and we are certified by JAKIM for our functionalities of Halal). In process industry every product needs to be evaluated even if it’s a flavor, its CO Etc. but when you are dealing in raw meat so we have to ensure that the animal was slaughtered in accordance to the guidelines of the Shariah. Basically, Halal standards comes from different region for example Malaysia has JAKIM a popular standard then we have different Madarsa’s (local standards) we do we have a compliance with them. (An audit is been run by different companies such as SGS but it’s a Quality audit company). It audits the way an animal is being slaughtered, its handling through-out in that process, the ambient for that product wasn’t contaminated. In our company the whole process is being carried out by a factory hand slaughtered then we make sure that direct contact surface of the meat shouldn’t be done and for that purpose we use rawlin cotton to wrap that meat produced till the time it reaches to the cutting tables. So throughout this procedure (either the meat is in hanging position or wrapped in rawlin cotton until it reaches to the chiller vans) so we have to run a cold supply chain through-out this process till the time it reaches to the shopping bags of the customer.

Halal compliances External audit Minimizing the

risk of contamination

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7.4 Appendix “D”


Respond 2

In Al-Shaheer what we have done is that we have formed our own Sharia team headed by Mufti Mujeeb then we have Sharia advisor Mufti Farhan, then Me SabeenMehmood as (Sharia Compliance Officer because according to JAKIM it is mandatory to have at least one Sharia compliance officer at the facility.) He/she or would be responsible for any issues during the operations. We have merged (PS-3733 and JAKIM commonalities into our checklist so as to monitor the operations from initial to final stage.) As we are certified from both countries Pakistan and Malaysia so we have merged the guidelines of both certifications so as to (save our time and increase the worth of the document.) For example (HCP-1 ensures the source of the product as halal. In HCP-2 an anti-bottom inspection) is carried out to examine the body temperature, or any food or mouth disease in our animals.

Sharia Compliance PS-3733 Reduce

examination time Anti-bottom

inspection

Merger of Halal Compliances

Respond 3

To ensure production of healthy chicks we even raise their parents with an (environment controlled poultry houses) we have a team of doctors which ensures their health throughout this process. Halal is an integral part of any company operating in Muslim world and even in Non-Muslim region because of the vast spreading of Muslim population. So halal is basically part of quality which ensures the religious side as well as from a business point of view (hygiene and trust factors which essentially is a win-win situation for both the consumer and the producer.) Now the world has taken serious measures and there are certifications which ensure the operational process through internal audit by different compliances and we are (certified by Darul-Ifta by JamiaNaeemia and JamiaAshrafia and these certifications make our processes Halal.)

Environment controlled poultry houses

Hygiene and trust Darul-ifta by

jamianaeemia and jamiaashrafia

Curtailing Inspection Criteria

Q2 What is Halal from a logistics, supply chain point of view?

Respond 1 Contamination comes in with different outcomes like meat having a (direct Direct contact with

69


contact with surface) or the storage of meat with any other product even with chicken so as (to minimize the chances of cross contamination.)We can’t have the same (storage chiller) for red meat and fish so we have different chillers and storage facilities for different product category so it has a different process where the cross- contamination is minimized. We have different fleets for every 3 raw product so it doesn’t escalates the chances of contamination, then its (stored in distance so as the blood of 1 product can’t be mixed with another.) So basically, this is what happen when you try to minimize the chances of impurity with different product categories, contamination with any material for that matter so you can’t store anything or any material even the offal’s can’t be stored because its pure red blood.

surface Cross

contamination Chiller vans Storage and

preservation

Respond 2

In logistics cross contamination is avoided through making sure that it is not in contact with any impure/harmful materials even the red offal’s are stored separately. (Still we don’t use any kind of GPS technology) so we (ear tag) the animals. GPS technology is highly expensive and as an exporter our freight forwarders do have a GPS tracking system so we can track our products at live. Halal doesn’t come alone it brings quality with it so for quality assurance we can track through animal number or supplier code. For distribution purposes we use the tagging on animals legs and shoulders so that (we can know where that particular product is heading towards.)We are also (training our suppliers) in different location for traceability purpose so as to increase our visibility.

Non usage of GPS technology

Ear tagging Supplier

Development Enhancement of

visibility

Installation of Reefer Storage Facilities

70


Respond 3

We have our (own fleets of logistics) which enhances our visibility of our products even in a container and because chicken meat is (highly demanded by consumers so we have to be very agile because competition is increasing). Once the product is packed and stacked in container so we have to observe a (certain ambient and temperature for preservations) otherwise it will start to appear fluffy so yes for that we have chiller container operating at -6C but (GPS technology is expensive) so we can only exchange information from the operating room where the order has reached. In case of malfunction we have a (technician with that fleet.); so that it can be corrected then and there but definitely it hurts in our (kpi.) If a serious problem occurs than we have to move that product into another container which increases our handling and transportation cost.

Private carrier Agility Operating at

particular temperature

Non usage of GPS technology

Availability of technical staff

Key Performance Indicator

Hindrances in Traceability

Q3 What are the financial hurdles in implementing Halal Supply Chain?

Respond 1

When we talk about implementation of Halal process it brings itself Quality in it which escalates cost. Halal & Quality are combined and definitely (cost increases when you take measures to ensure quality and we can’t built-in that cost in our product prices because that will create a negative impact in the end user) so certainly market compatibility issues are there because people see us at a certain price specially in Pakistani market and all these standards have their own price.

Barriers to implement full quality assurance due to extensive pricing

71


Respond 2

Hurdles do come in when you are taking about quality and halal is a brand itself so yes financial hurdles do come in when we talk about Halal because our promise is hygiene and natural process slaughtering so we do face hurdles not only (financial but operational also like training of slaughter men etc.) talking about finances so yes we have to take extreme care of (contamination or impure remnant so yes they do come in but they are curable enough) unless there is a breakdown in our operations or facilities because our (chilling system is what makes the product curable to consume.)

Increasing operational cost

Training of labor Reefer storage

facilities

Barriers in Implementing Full Quality Assurance

Respond 3 No response

Q4How technology can create an impact in traceability and tracking of meat in Logistics?

Respond 1

Traceability is one component of Halal and Quality but it’s very costly because RFID’s code is linked with animal so to (trace it in overall process its very expensive and you need heavy finances)to run such kind of a process because this industry is not even an (FMCG its very very fast moving consumer good because it’s extremely perishable so once packed it’s very difficult to recall it). But yes, we do recall it if the whole lot has been found spoiled or anything and then we try to

Challenges in RFID usage Barriers in Reverse Logistics Improving customer satisfaction

72


sell it on discounted offers after having clearance from our quality department or we use it in feeds of animals or dump it if totally found lousy. (Yes, we discuss such projects but we don’t discuss in terms of Halal but because of Quality measures and customer satisfaction.) Yes, traceability is there globally but in frozen generally fresh meat doesn’t need that strict traceability.

Respond 2

In Pakistan the concept RFID and technology is still not fully implemented only few MNCs are using such technology there are for few standards developed in Punjab side but its implementation is arduous due to low literacy level and that it’s an expensive project because RFID’s are linked with a system where the whole information is centralized. Al Shaheer is also a part of that team striving to bring such technologies but barriers are high and such issues restrict us from entering in European market because it demands the pre-purchase of livestock.

Establishing a centralized information exchange system No pre-purchase information available

Increasing Visibility through Information Exchange

73


Respond 3

The technology which we are using is coloring our chicken; we place a spot on their skin with a designated color so that we can trace it rather it’s a procedure not a technology. (RFID is expensive and private sector can’t implement it on its own for that we need governmental support). Most of the countries are using this technology for traceability and tracking but in Pakistan there hasn’t been any effort from either side for the use of such technology because (to run such a project you will be in need of high finances with highly technical people) because it’s kind of like a centralized information exchange where you can (trace that this bird was procured by this supplier form this region and that in forward distribution the information will be at live) so the communication gap also minimizes by such projects but for that you need governmental support.

No governmental support Need heavy finances One window solution

Q5How much impact certifications & Halal compliances play when you deal in B2B?

Respond 1Massive, you (can’t deal in export market without certifications because the audit process binds to have such

74


certifications and proper documentation, so it gives us process compliance.) In the last 5 years or so we have seen drastic changes in meat market, at first we didn’t have any B2B customer but now it has expanded and quality certifications is a major factor for such a boom. We have our (NIMCO as our customer and they purchase mince from us for their fried items so they are now demanding us to write a formal letter on our letter head as a MeatOne customer) so he can build a customer confidence so yes certifications play a critical role especially in a world of globalization.

Essential in export market Strict legislation in destination countries Supplier relationship

Respond 2 no response

Respond 3

Certifications have a huge impact on consumers especially when you are dealing in export market because the legal implications are so tough that (you have to be certified from a certain body operating in your region whether its halal or quality or HACCAP but in retail market now its evolving more towards such certifications) because of the use of internet and people gaining knowledge which actually is good

HACCAP Strict export requirements More focus on globally known certification body

Establish a Regulatory body

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because you don’t want to consume anything which is harmful and then you have to pay for it as well. (We have our customers forcing us to show the required certifications or documents) before starting business and (this is the reason we haven’t captured a large size of European market because of inflexible legalities from them). Now companies are focusing more towards this point and hopefully it will be a turnaround in the next 3 years or so.

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challenges in implementation of halal supply chain in meat industry

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