Halal procurement strategy for the halal pharmaceutical industry in Indonesia

Abstract

Purpose This study aims to develop a halal procurement strategy for the halal pharmaceutical industry in Indonesia. Design/methodology/approach This qualitative research is based on in-depth interviews, followed by a strength, weakness, opportunity and threat analysis (using analytical network process technique) to develop halal procurement strategies for the halal pharmaceutical industry in Indonesia. Findings Access to halal-certified raw materials is the most difficult issue for pharmaceutical business procurement departments. Because Indonesia is heavily dependent on raw material imports, developing the raw material industry should be a top priority. Recommendations are drafted for the government, pharmaceutical industry and education to strengthen Indonesia’s halal pharmaceutical sector and procurement strategies. Research limitations/implications Few studies have been conducted on halal procurement in the pharmaceutical industry, and case studies are recommended to further explore halal procurement best practices. Quantitative research is also recommended to better understand existing halal procurement strategies and the purchasing process of halal critical items for pharmaceutical industries in Muslim-majority countries like Indonesia. Practical implications Halal critical items sourced for the halal pharmaceutical industry require halal certification, multiple supplier sourcing, evaluation mechanisms and benefit from horizontal collaboration. The main bottleneck for the halal pharmaceutical industry is lack of raw materials with the right halal certificates. Originality/value To the best of the authors’ knowledge, this is the first study on halal procurement strategies in the pharmaceutical industry. Its findings are relevant to regulatory, technical and business strategies in Muslim-majority countries.