muhammad ulil albab: Halal Supply Chain Management

Demand of halal products in Indonesia tend increasingly both from domestics and foreign. In other hand, halal supply chain management in Indonesia is very low for example distributing halal products. Regulation about Halal Supply Chain Management is not arranged clearly. Indonesia Ulama Council (MUI) also didn’t give a formal instruction. Certifications about halal supply chain be required by considering Indonesia as the largest country with Muslim population in the world, so these regulations need to be calculated clearly in order that UMKM (Micro, Small, Medium Enterprises) couldn’t collapse. Regulation about special transport can be included to regulate halal supply chain management.

Now, small business already has halal certification from MUI so few, approximately 3.000 small business. While, total of small business and home industry approximately 1,2 million, added medium business as much as 6.000. Law of Halal Product Guarantee (UU JPH), will be implemented in 2019, so this regulation will useless to small industry because it’s not already to fulfill halal certification. Halal certification of company and logistics supplier in Indonesia is very low. To ensure halal of product until consumer must be started from upstream and downstream, as described by the figure bellow.

Figure 1: Flow representation of Logistics (FMCG)

Figure shown representation of Logistics, the supply chain is viewed as a single entity consists a series of fragmented elements such as procurement, manufacturing, distribution. In this area there are many strategy about planning process, with a particular emphasis on strategic decision making rather than on the operational cost. Halal Supply Chain Management consists of product, modal transport and warehouse. Each of parts from suppliers, logistics, and distributes to customers must be kept not be interfered with forbidden products (haram), to ensure that the products are halal and getting certificate from the authority in Indonesia (MUI). It’s still has great opportunity because the awareness of Indonesia society about halal product tend increasingly, each company which is targeted expanding to Indonesia, can be get opportunity and profit if they are aware of halal certification. Central of the success of effective halal supply chain management is the use of integrated information system and full supported from stakeholder.