International Journal of Business and Economy (IJBEC) eISSN: 2682-8359 [Vol. 4 No. 2 June 2022]
Journal website: http://myjms.mohe.gov.my/index.php/ijbec
IMPLEMENTATION OF THE RETAIL HALAL CONTROL POINTS: ASSESSMENT LEADING TO SUSTAINABLE COMPETITIVENESS IN COTTAGE FOOD BUSINESSES
DURING POST-PANDEMIC RECOVERY
Anizah Zainuddin1*, Sarah Irdina Ridzwan2 and Sarah Batrisyia Ridzwan3
1 Faculty of Business Management, Universiti Teknologi MARA, Puncak Alam Campus, Kuala Selangor, MALAYSIA
2 Faculty of Accountancy, Universiti Teknologi MARA, Puncak Alam Campus, Kuala Selangor, MALAYSIA
3 Faculty of Dentistry, Universiti Kebangsaan Malaysia, Kuala Lumpur Campus, Kuala Lumpur, MALAYSIA
*Corresponding author: [email protected]
Article Information:
Article history:
Received date : 10 April 2022 Revised date : 16 April 2022 Accepted date : 27 May 2022 Published date : 15 June 2022 To cite this document:
Zainuddin, A., Ridzwan, S. I., &
Ridzwan, S. B. (2022).
IMPLEMENTATION OF THE RETAIL HALAL CONTROL POINTS: ASSESSMENT LEADING TO SUSTAINABLE
COMPETITIVENESS IN COTTAGE FOOD BUSINESSES DURING POST-PANDEMIC RECOVERY.
International Journal of Business and Economy, 4(2), 1-11.
Abstract: This study investigates the importance of retail halal control points (RHCP) in the cottage food businesses. The examination of the RHCP application on the cottage food providers is to facilitate the business entity in obtaining halal compliant status. The RHCP method will assist the cottage food management to control for prohibited or illegal elements from infesting to the entire food supply chain system, thus would comply with the Islamic teaching on halal principles.
However, it appears that up to now, there is no study in that direction. This study therefore, was conducted to fill the gap by examining the possibility to apply the concept of RHCP guideline in the cottage food businesses. Using purposive sampling technique, 15 cottage food businesses located in Selangor were cross-examined.
Business providers from 15 cottage food businesses were interviewed extensively using open ended questions. The interview transcripts were then analysed by using thematic content analysis. The results showed that the all selected managers concur to follow the procedure in the standard operating guideline of RHCP for their business operations. This would certainly help the cottage food management in preparing and planning their business
1. Introduction
Offering effective services generally starts far before customers make purchases in a store. It involves the entire chain of product creation and transportation, from manufacturing to forecasting demand for inventory management for delivery. Good supply chain management practices help retail outlets ensure effective inventory control and timely delivery of products.
First of all, we need to understand why the management of the supply chain is important in the retail industry? Effective retail supply chains management is important as it provides capabilities such as ensuring access to products, providing a framework for setting goals, improving productivity and improving teamwork, developing practical protocols for inventory management and order fulfilment, as well as used to evaluate work procedures and also ensure quality service and customer satisfaction. Without good supply chain management structure, a company can experience an array of difficulties such as disorganized employees, fulfilment issues, shipping delays, customs delays, overall customer dissatisfaction and revenue loss.
Without the proper supply chain management structures, employees may not have a clear idea of what company expects from them. The absence of clear goals can also lead to downturns in engagement and motivation, which may lead to further declines in productivity. The absence of a reliable supply chain management structure often leads to fulfilment issues. Without a comprehensive system for processing and tracking orders, a company will likely experience difficulties with timely and accurate fulfilment. Some orders may get lost in a large, disorganized warehouse. Or employees might grab the wrong items or forget a certain product.
Fulfilment issues often come in the form of shipping delays too. Items might sit for days in the warehouse because employees can’t track or expedite the fulfilment process. If customers expect their items within a specific time frame, the delays associated with poor supply chain management can leave them frustrated and confused. Customs delays are also common if a company doesn’t have a dependable supply chain management structure. Without an overarching system to coordinate orders, shipments may show up at customs in many different packages rather than as one more manageable order. This disarray can lead to extended processing times and delays. Thus, customers who receive partial, incorrect or delayed orders will feel inconvenienced and unhappy. They may become less loyal to your business either shopping less frequently or turning to companies that can better meet their needs.
Malaysia has experienced exceptional developments in the development of the halal industry at national and international levels over the last few decades. According to The State of Gobal Islamic Economy Report 2019/20 Increased demand for halal products around the world will reach AS3.2 Trillion in 2024. Malaysia remains top spot in Global Islamic Economy Indicator 2020/2021 in UAE and Bahrain. This development will increase the demand for halal supply chain services including retail. There are about 1.6 billion Muslims worldwide and it is anticipated that Muslims will occupy 35% of the world population by 2030 according to new population projections by the Pew Research Center’s Forum on Religion & Public Life (https://www.pewforum.org). Halal trade on a global scale is estimated to be realised between USD2.1 trillion and USD6 trillion in the coming years. This is because consuming halal certified products is obligatory for Muslims to perform as consuming otherwise is not Keywords: Retail Halal Control Points, Cottage Food, Thematic Content Analysis, Malaysia.
permissible in Islam. Hence, the retail supply chain process needs to ensure that food and food services are halal and Shariah compliant. On this new development, company needs to ensure that they are in accordance with the Shariah permissible guidelines in each of its activity including implementing best practice guideline using the retail halal control points.
2. Literature Review
Cottage food based business is a small industry that been operated in the home. The definition of a cottage business by Investopedia (2019) is a small scale; decentralized manufacturing business often operated out of a home rather than a purpose-built facility. While Merriam Webster Dictionary (2019) defined the cottage business as an industry whose labour force consists of the family unit or individual working at home with their equipment. This kind of business will be operating in the area of the house with a short number of the employee.
Food processing industry generally, is a large complex sector from the global food industry dominated by large companies. However, whether a small company or large company, it is necessary to comply with various safety and labelling laws at federal and state levels.
Therefore, making and selling cottage food requires growing capital and resources. At present there is no cottage food law (including rules and regulations) that can be referred. Commercial food production laws for example require that food products are made in certified commercial kitchens. To be certified, the kitchen must meet the tight food safety requirements, such as having a surface made of stainless steel and a separate washing place. For the most part, the law does not allow the house kitchen to be certified as a commercial kitchen. Building a commercial kitchen will be too expensive for most cottage food providers. Without proper cottage food preparation guideline, providers may be forced out of the market.
In Malaysia, cottage food industry was described as the development of downstream products that contribute to the economics of the rural area and often includes preservation processes such as bottling, canning and freezing. Cottage foods business fall into the “low-risk” food category. The FDA defines what foods are low-risk versus high-risk but generally speaking foods that can spoil or require refrigeration are considered high-risk and those that do not tend to pose a risk of food-borne illness are considered low-risk. High-risk foods are foods like meat and dairy whereas low-risk foods include mostly baked and dry goods. It was reported that, the cottage food business is ventured by those who do not have or have a low level of education.
Interestingly, over the last few years there has been an increased number of cottage foods entrepreneur who are well educate; many are interested in supplying and preparing homemade foods.
With the uncertain economic conditions due to pandemic and now endemic, the involvement and demand of the cottage food business has increased. Local providers especially those engage with cottage food venture have to meet with unusual demand. An important issue that needs to be addressed is the quality, hygiene, safety and halal food. Cottage food providers must ensure that there is no health risk either from bacteria, viruses, parasites and also from chemical and physical pollution. The number of cases of food-related diseases estimated by the World Health Organization is 600 million a year with more than 420 thousand deaths worldwide (https://www.who.int/activities/estimating-the-burden-of-foodborne-diseases).
Based on reports issued by the Ministry of Health Malaysia in 2020, the main reason for food pollution was mostly occurring during the preparation process. This includes an imperfect cooking process, food storage mixed with raw food, foods are stored in unsuitable temperatures and hygiene and hygiene operators of the area around the cooking area. Therefore, it is important to ensure that throughout the process of producing food that starts from the farm is safe. This indicates that safety and hygiene controls should be emphasized at each level of cottage food supply chain to curb the risk of pollution and thus prevent the danger to consumers. However, until now there is no standard regulatory system that controls and monitors the overall cottage food supply chain process, that comply with the principle of halal.
This study investigates the importance of Retail Halal Control Points (RHCP) guideline from cottage food business perspective. Specifically, looking at the need to the introduction of the RHCP guideline to the cottage food providers. Are there certain guidelines given before the food is produced and then sold? For those who are interested to become cottage foods providers, there are still many responsibilities they need to learn. Get into the business may be easy but they need to follow the guidelines that must be understood and complied with will be challenging. The questions are, what guideline do they need to followed? Who will be responsible to prepare it? Who will be responsible if the guideline was not abide by? In this study, the role of the retail halal control points will be introduced and discussed.
3. Relationship between Hazard Analysis and Critical Control Point
The concept of halal control points has its origin from the notion of hazard analysis and critical control point (HACCP). Hazard analysis and critical control point was designed to prevent microbial, physical and chemical hazards in food for space assignment or mission (Janevska et al., 2010). HACCP implementation consists of seven principles. According to FDA (https://www.fda.gov), the seven principles are;
• Analyse hazards;
• Identify critical control points;
• Establish preventive measures with critical limits for each control point;
• Establish procedures to monitor critical control points;
• Establish corrective action to be taken when monitoring shows that a critical limit has not been met;
• Establish procedures to verify that the system is working properly and
• Establish effective record keeping to document the HACCP system.
Studies that use the HACCP mostly concentrate on ensuring food safety, and halal analysis of food products (Riaz and Chaudry, 2004) and equipment or machines that come in contact with food (Henderson, 2015). The HACCP concept is also used in studies involving the supermarket as it is a potential place for contamination too. In the relevant literature, there are several authors who suggest that HACCP can also be used in ensuring halal compliance (Kohilavani et al., 2013; van der Spiegel et al., 2012; Bonne and Verbeke, 2008). For example, the concept of HACCP enables the elements of retail halal control points (RHCP) to be identified that can eliminate the possibility of the presence of illegal components in the entire retail supply chain.
Consequently, the safety of the entire supply chain can be rest assured. Hence, the RHCP can be defined as a point, step, or procedure that monitors the entire operation of the retail supply chain. Through the RCHP, company can identify and control possible contaminations in its entire retail supply chain. This ensures the safety of goods. As such, the goods sold will not endanger consumers. Coincidently, this initiative conforms to the teaching of Islam (Ambali
and Bakar, 2014). Although the concept of HACCP can be explained clearly (Henderson, 2015;
Kohilavani et al., 2013), the practical interpretation is very different for a company or sector, and also for a Western country or Islamic country. Information concerning laws and regulations of halal goods and general guidelines for the handling of halal goods generally are available, but very limited and if available are not comprehensive enough. Understanding the concept of retail halal control points within the industry is also different and limited (Anizah & Sarawati, 2016; Anizah et all, 2020). Therefore, the objective of this study is to;
• link the concept of retail halal control points and cottage food business;
• recognise the appropriate elements of retail halal control points that need to be understand from the cottage food business outlook.
It is hoped that the identified elements from the study can be used as a useful guideline in preventing contamination in cottage food businesses. Moreover, this initiative also ensures halal and shariah-compliant process being exercised. At the same time, this study will help cottage food providers towards obtaining halal certification status for their business.
4. Methodology
The methodology that is applied in this study is qualitative in nature. Interviews with 30 managers or owners or providers are conducted to obtain views from the management side regarding the adequacy of developing a RHCP guideline for small scale food processing businesses located in Selangor. This approach helps in understanding where does the providers stand on the issue of possible contamination in the entire supply chain in the cottage food business. By conducting a series of observations and focus group sessions, the researchers can get more information that could possibly lead to other issues on the topic they are conducting their research. The interviews and focus group sessions are recorded by a digital voice recorder, transcribed and translated. Meanwhile, the observations help the researchers to fully understand the whole process of the RHCP activity in the selected cottage food business providers. Next, comparisons are made among all the selected cottage food business providers.
For this study, the purposive sampling technique is used as the researcher wants to establish two categories of respondents: first, the staff and management (the provider); and second, the concerned authority, that is, the Department of Islamic Development Malaysia (JAKIM), an agency responsible for Islamic affairs including halal certification, in Malaysia. In the first stage, two main staff from the operations are identified to be interviewed. A structured questionnaire is used for the interview about the business’s supply chain operations condition.
The respondents are encouraging to express their opinions on this. Next, a small focus group consisting of the cottage food providers is conducted. At this stage respondent are free to express their opinions in debating this topic. The respondents were grouped into 6 and consisted of 5 providers. Their responses are compared with the responses obtained in the first stage. In the final stage, an interview with the authority (JAKIM) is carried out to approve and endorse the findings of the study. Next, the data obtained is analysed by using a thematic content approach. Thematic content analysis is a method of analysing qualitative data. The data obtained from the interview will be carefully examined to identify themes for ideas surfaced during the interview.
5. Findings
Here are the findings obtained from the focus group sessions.
5.1 Question: What guideline do they need to followed?
There are two main themes identified in this study which often emerge during interviews and discussions; which is the need for proper guideline for all providers that include the controlling and monitoring process which involved with the:
• overall process of supply chain and
• equipment and people.
During the interviews, most discussions rotate around the issue of raw materials that are increasingly expensive and difficult to get especially during the pandemic. This leads to many cottage entrepreneurs deciding to reduce their overall production, which ultimately leads to a reduction in supply. This causes some difficulties to cottage entrepreneurs especially in regaining their business capital back. In addition, these entrepreneurs also agree that it is difficult for them to obtain halal-certified transit and logistical practices for transportation purposes. This is because most lorries/vans are belonging to themselves and if they need to hire, most will rent through the residents who are stayed around the area in which generally are not certified. Respondents believed with proper guidelines they feel they will be able to cope with these issues.
Methods of processing foods such as equipment’s used for butchering, cooking, baking and mixing were usually follow the standard operation procedure that has been briefing before the job started. However, proper guideline should be introducing and implementing as to prevent contamination. Another aspect discussed during the discussion is the packaging and/or labelling. The respondents mostly agreed that most products were prepared and packaged individually thus no specific requirement from the authority as how to handle this task suitably.
Anyone are free to packing and labelling their own products according to their preferences.
Moreover, discussions also debated on the need for all employees including management to be more careful with every situation occurs in the work area. They need to ensure that only certified goods/items are used and stored in the work area. Good internal and external communications between management and staff will have a positive impact to ensure that the correct procedures can be carried out effectively. All interviewees agree that any changes to be made must be well communicated. At the end of the interview, all participants involved emphasize that an appropriate guideline should be established. They also mentioned that maintaining personal hygiene in the workplace are vital to the overall operation process. The management must ensure that they are aware of these requirements as to prevent contamination. The overall result is shown in Table 1.
Table 1: Findings from Focus Groups A. The Guideline for Control Process Involved in the Overall Operation
1 Origin of materials must be documented no standard guideline
2 Ingredients, including additives and processing aids such as:
- biological/ chemical/ physical descriptions from suppliers must clearly understand.
-
3 For transit, mostly use own home as transit while for logistics usually using personal transportation such as lorries, vans and cars. Certified halal transit and logistics practices mostly based on the availability and negotiation
no standard guideline
4 Methods of processing e.g., butchering, cooking, baking and mixing, etc.
usually follow the standard operation procedure
no standard guideline 5 Packaging and/or labelling - Products prepared and packaged individually
in store
no standard guideline 6 Storage conditions and shelf life are personally managed no standard guideline 7 Loading area including floor are free from:
● Rats & mice
● Cockroaches
● Flies
no standard guideline
8 Good control of contamination practices and good hygiene no standard guideline 9 Good practice on traceability and monitoring system no standard guideline 10 Digitalize every control point for efficiency no standard guideline
& suggestion for improvement
The Guideline for Control Involved with Employee’s Personal Hygiene & Equipment Used 1 a) Procedures of proper handwashing are clearly stated. make known to all
b) The appropriate use of gloves and dispensing utensils make known to all c) Control of bare hand contact with ready-to-eat products and/or
goods
make known to all d) Exclusion and restriction to all employees:
e)
make known to all
i. Smoking make known to all
ii. Spitting make known to all
iii. Touching the hair, face or parts of the body or clothing make known to all
iv. Eating make known to all
v. Working while ill with diarrhoea, vomiting or any infectious diseases
make known to all vi. Wearing watches or jewellery, as they can fall in the food. make known to all 2 Cross-contamination from utensils, machine and equipment’s are clearly
managed
no standard guideline 3 Food handler must have his/her certificate of anti-typhoid vaccination (valid
for 3 years) and must be certified by a registered medical practitioner.
All food handlers are required to:
i. Attend food handler’s training ii. Typhoid vaccination
make known to all
4 Kitchen environment specifications no standard guideline
5.2 Question: Who will be Responsible to Prepare the Guideline?
Respondents argued that the industry players together with the JAKIM (Department of Islamic Development Malaysia) and Islamic State Authorities should discuss details of the guidelines.
Series of discussions with other parties such as suppliers, transport operators and local authorities should also be carry-out for confirmation and later introduce to the industry.
5.3 Question: Who will be Responsible if this Guideline is not Complied with?
Respondents argue that the authorities need to monitor this guideline properly from time to time. In this case the JAKIM (Department of Islamic Development Malaysia) and Islamic State Authorities need to work together in achieving this goal. The public should also be educated especially on the contents of the guideline and they can act as middlemen too; to deliver relevant information to the authorities if this guideline is not followed or misused.
6. Managerial Implications
In general, respondents are of the opinion that guidelines for small-scale cottage food processing manufacturers need to be developed to help them in focusing on what they are doing well. This is to ensure that standard procedures have been introduced to all registered cottage food providers. This guideline helps new cottage food providers in understanding the needs they must comply before they explore into the business in the future. Therefore, the conclusion is, it is timely for the relevant parties to provide and implement retail halal control points guideline for the needs of the cottage food business in Malaysia.
7. Suggestions for Future Research
It is evident from the earlier sections that the RHCP is the system to adopt by cottage food providers as it shields/protects the operations from contamination due to pollution or viruses;
and it is also compliant with the Shariah as it can be considered to have the ‘uruf’ element.
‘Uruf’ is something that has been set, recognized and accepted or something that is practiced in everyday life which determining halal or haram for any form of food in the Islamic society.
However, benefits that it can bring need to be further investigated. For example, research need to be carried out for the verifications in other contexts. There are other areas of the RHCP that need to be explored for its other benefits that can be offered to improving the quality of life/mankind and life, as well as other matters related to Shariah compliance and Islamic teaching. All these aspects need future research with the expectation that the RHCP guidelines can be widely used throughout the country and not just in certain areas. Therefore, future research needs to consider the widespread use of RHCP guideline and not just focused on cottage food businesses is very much needed. The willingness of the cottage food providers to adopt the RHCP guideline should be studied in more detail as it is helping post-pandemic recovery.
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