Halal procurement strategy in the food industry

Purchasing is the professional buying by organisations. Purchasing defines the buyer-supplier relationship, also known as reverse marketing. Although much research has been conducted on the buying intention of halal products by Muslim and non-Muslim consumers, little research has been conducted on the professional buying of halal products, services, and works by organisations.

A focus group discussion on halal procurement strategy was conducted with food multinationals under the aegis of the Universiti Malaya Halal Research Centre. The focus group discussion illustrated that leading halal procurement strategies are founded on solid halal risk & reputation management; harmonise, standardise and simplify halal; backup plans for halal critical items purchasing; local suppliers of halal critical items; all suppliers of halal critical items need to be halal certified; business contingency plans by suppliers; and leveraging synergy advantages. There is a preference for local or regional sourcing instead of global sourcing, and a preference for multiple sourcing, instead of single sourcing. The substance of relationship between buyer and supplier evolves based on the maturity of a supplier relationship. Monitoring and evaluation of halal critical suppliers require a combination of vendor rating, benchmarking, and physical audits. There is potential for collaborative purchasing with purchasing organisations both within and outside their own group of companies. As halal procurement is a new field of research, further qualitative research has been recommended.

The full research article is published in the International Journal of Islamic Marketing and Branding under the title ‘Halal procurement strategy in the food industry: a focus group discussion’.