Towards Developing Halal Logistic Comprehensive Model for Importers in Cosmetic Industry (S/O 13806)

• Main Authors: Yatiban, Aminurraasyid, Arbak, Salwani, Subhan, Muhammad
• Format: Monograph
• Language: English
• Published: UUM 2021
• Subjects: HC Economic History and Conditions
• Online Access: https://repo.uum.edu.my/id/eprint/31512/1/13806.pdf; https://repo.uum.edu.my/id/eprint/31512/

The Malaysian Halal Industry has grown rapidly and has become one of the leading players in Malaysia economy. JAKIM's halal logo and certification has also been recognized by many countries around the globe. Thus, Malaysia has taken the halal industry seriously by implementing several policies as the national economic agenda by establishing the Halal Industry Master Plan 2008-2020 which targeting RM 50 Billion worth of halal exports. The initiative has seen splendid growth as Malaysia has recorded rapid increase in the value of RM 19 Billion in halal exports in 2011 and RM 40 Billion in 2018, especially in the pharmaceutical and cosmetics sectors. The Malaysian halal industry covers several key sectors such as food, logistics and cosmetics. World demand for cosmetics consumers has changed the landscape of the Malaysian halal cosmetics industry with an estimated export value of RM 3 Billion Malaysian cosmetics products by 2018. However, most local cosmetics manufacturers are importing raw materials from overseas especially Europe and Korea to produce final products. This has led to the logistic process of handling imported raw materials in various ways according to the internal procedures established by the firms. The landscape of the Malaysian halal cosmetics industry is huge, encompassing a wide range of final products and raw materials from a variety of local and international brands. As such, Malaysia requires importers or manufacturers to obtain halal certification issued by 84 authorized Halal Certification Bodies (CBs) from 46 countries around the world that have been recognized by the Department of Islamic Development Malaysia (JAKIM). In this regard, halal cosmetics importers are also closely related to halal logistic activities. Halal logistic and halal cosmetic practices in Malaysia are also accredited by the Department of Standards Malaysia (DSM). Halal logistic involving 3 Malaysian Standard (MS) MS 2400-1: Halal Transportation, MS 2400-2: Halal Warehousing and MS 2400-3: Halal Retailing. In addition, the halal cosmetics halal also related to 3 MS namely MS 2200: Islamic Consumer Goods, MS 2424: Halal Pharmaceutical and some of halal raw materials are classified as food-based products that fall under MS 1500: Halal Food. However, in real practices shown that not all MS are used by importers because of their niche of business and capacity of firms. In fact, all these MS are voluntary-based applications. Therefore, the issue of integrating halal logistic and halal cosmetic industry involving various Malaysian Standards is an important focus of this research. This is because of the inconsistencies in the standard of procedures (SOP) adopted by different firms which makes it a risk of halal guarantees in handling logistics of final products and halal cosmetic raw materials. Possibility of breaching the halal chain is high. Therefore, this study proposes the development of a comprehensive model for addressing halal logistic issues for importers in the Malaysian halal cosmetics industry. Therefore, this study will identify the characteristics of the firms involved in importing cosmetics raw materials. Then, examines the current logistic practices of these halal importers and manufacturers. As a result, a comprehensive model has been developed considering the overall standards established by the Malaysian Standard (MS) involving import activities for the halal logistic and cosmetics sector in Malaysia. This is in line with helping the halal industry throughout the supply chain to ensure Malaysia continues to be a major player in the halal industry