Beruflich Dokumente
Kultur Dokumente
.
So, it is important in considering the employee satisfaction with emphasizing on the shift work. Shift work
could affect many aspects in individual for the employees and as the impact it will influence the company itself
for the productivity, effectiveness, efficiency and performance (Baron and Armstrong 2007, Dessler 2005, and
Wayne 2006). In other side, the company strategic plan is to implement the alternative of highway gate
transaction management that consists of semi-automatic integrated system and automatic system by using smart
card. The semi-automatic integrated system is the transaction of taking the highway card and the payment
transaction using smart card but still need human for the transaction. In the future, PT. Jasa Marga has planned to
implement the automatic transaction which is the transaction that didnt need human assisting. This option could
create several decisions for employees. It could make easier for employee to work and also it could create the
possibility that will impact the reduction or escalation number of employee.
According to both conditions above, PT. Jasa Marga, Purbaleunyi branch office will face the human
resource difficulty. As the research questions, with the output of employee satisfaction analysis and the
recommendation for personnel planning about number of personnel needed. The analysis will be focus on:
Highway shift work
What the output of employee satisfaction survey? Are the current shift hour have given employee
satisfaction, related to companys goods and employee need as an individual? What is the ideal new
shift work? Is there any increasing or decreasing in the number of people?
Technology
Can the implementation of new technology solve/ support employee satisfaction? With the new
technology, how the shift will be? What are the consequences in implementing the new technology?
Compare with the manual system, is it more effective or not related with the personnel planning?
In additional, within the analysis of employee effectiveness, ratio of highway length : employee amount = 1:
12. While, as a comparison, the ratio of highway length : employee amount in Malaysia is 1: 3 and in South
Korea is 1: 2.3. In fact, this comparison ratio could be influenced by many factors, such as, government
regulation, technology, management, system work for toll collector gate, etc. The ratio number above represent
that numbers of employee in PT. Jasa Marga were in big amount. In one side, it could be assume that PT. Jasa
Marga put into action about their corporate function, as the social and economic function. In other side, it is
important to have a target of employee efficiency, PT. Jasa Marga have target to decrease number of ratio.
2. Research Methodology
The process of this research begins with the informal discussion in PT. Jasa Marga to find what are the
current issues or problems present. Following informations about the current issue, it continued by the analysis
to decide the research project. Then, continued by the data collection in PT. Jasa Marga Purbaleunyi branch
office. In the data collection, confirmation of a data is very important. Consequently the data collection also
complicated by the informal discussion. Figure 1 shows the research methodoly.
\
|
+
|
|
.
|
\
|
2
2
2
3
1
1
y
S
y
k
R. Magdalena Supplier Selection for Food Industry ... 5
The 3rd International Conference on Technology and Operations Management (ICTOM)
Conference Proceedings 2012 ISBN: 978-979-15458-4-6
where:
k =
L = loss m = target A
0
= cost due to loss
y = measured value S
2
= variance of distribution
0
= tolerance
k = loss constant y = average distribution
2.3. Taguchi Loss Function
Fuzzy Linear Programming is a method of linear programming using the consideration of human thinking in
distinguishing qualitative information. By using this method, the conditions arising from the dominant
subjectivity and intuition can be resolved, not only based on the assumption of certainty as in the typical linear
programming. Bellman and Zadeh (1970) suggested a fuzzy programming model for decision making in a fuzzy
environment. Later, their method was first used by Zimmermann (1978) to solve fuzzy multi-objective linear
programming problems. In addition to Zimmermann, there are also other studies which used fuzzy-AHP
approach, such as Sevkli et al. (2008) and Indrapriyatna et al. (2010). In this sub-section, the general fuzzy
multi-objective model for supplier selection for m criteria is described in the following equation:
(4)
and constraints: (5)
where:
Z
k
= objective function for criteria k
C
ki
= supplier value for criteria k
X
i
= the i-th supplier
Every objective function value, Z
k
, changes linearly from
min
k
Z to
max
k
Z . So it may be considered as a
fuzzy number with the linear membership function
zk
as shown in Figure 1.
min
k
Z and
max
k
Z are obtained
through solving the multi-objective problem as a single objective.
Fig.1: Fuzzy linear membership function
If Equation (4) is added to the value of non-negativity of the X
i
suppliers, it will be the following linear
Program (Zimmermann, 1978):
(6)
subject to:
k
Zk
(7)
Xi 0
2
0
0
A
A
m k where Z X C Z
k
n
i
I ki K
,...., 3 , 2 , 1 , . max
0
1
= > =
=
=
n
i
i
X
1
1
=
=
m
k
k k
w Z Max
1
6 R. Magdalena Supplier Selection for Food Industry ...
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Conference Proceedings 2012 ISBN: 978-979-15458-4-6
(8)
Where w
k
and
Zk
represent the solution of membership function, weighting coefficients that present the
relative importance among the fuzzy goals and membership function of the objective function.
k
is the
minimization of the objective function
Zk
.
AHP method is often combined with Fuzzy Linear Programming in the decision-making process. Fuzzy
objective and fuzzy constraint used in the optimization of Fuzzy Programming vagueness serve to accommodate
the information that occurs in the supplier selection problem with no precise criteria (Zimmerman, 1978).
The combination of AHP-Fuzzy Linear Programs has been demonstrated by Sevkli et al. (2008). Pi and Low
(2005) combined the AHP with the Taguchi Loss Function in the selection of suppliers. Indrapriyatna, et al.
(2010) utilized AHP-Fuzzy-Taguchi combination in his works. This study adds another criterion (environmental
management) and utilize Taguchi Loss Function (Zimmerman, 1978), which will then be integrated with the
AHP and resolved by fuzzy linear programming.
3. Research Methodology
The steps to find a good supplier for the company by integrating the Taguchi Loss Function with Fuzzy
AHP are schematically described as follows (workflow of this research is shown in figure 2 ):
Fig. 2: Diagrammatic representation of the research workflow
0 , 1
1
> =
=
k
m
k
k
w w
R. Magdalena Supplier Selection for Food Industry ... 7
The 3rd International Conference on Technology and Operations Management (ICTOM)
Conference Proceedings 2012 ISBN: 978-979-15458-4-6
1) Determine the suppliers and select the criteria for the supplier selection. This step can be done by
interviewing the purchasing Head, the QC head, and the head of production.
2) Develop hierarchical structure of the supplier selection. Perform pairwise comparison of each of the
selection criteria and pairwise comparison of the supplier (for each criterion) that can later be used to
calculate the weight of the criteria and the weight of the suppliers for each criterion. From the pairwise
comparison, Consistency Ratio (CR) can be calculated. If CR 0.1, then the results of the evaluation
criteria correspond to acceptable suppliers.
3) Calculate the value of loss by looking for data from the last three months by using equation (1), (2) or
(3) based on predetermined criteria. Subsequently, the weighted Taguchi loss for each supplier is
calculated. The value of weighted Taguchi loss is the sum of the multiplication of the weight criteria
with the loss criteria. Normalized value of the weighted Taguchi loss is obtained by dividing the value
of the total loss weighed Taguchi with the Taguchi loss weighted value of each supplier
4) Construct the supplier selection model according to the criteria, weighted Taguchi loss, constraint and
suppliers. Find the lower bound
min
0
Z and upper bound
max
0
Z to solve the multi-objective supplier
selection problem as a single-objective linear programming model. Use lower bound and upper bound
of the objective functions to find the membership function for each criterion in equation (4) and
equation (5).
5) Based on AHP-Taguchi Loss weighted model, formulate the equivalent crisp model of the fuzzy
optimization problem according to equations (6), (7) and (8). Solve problem using Scilab software.
6) Find the optimal solution of the original multi-objective supplier selection problem.
4. Result and Discussion
Based on interviews with the Head of Purchasing, Head of QC Section and Head of Production, it was found
that all packaging suppliers offer similar prices. This implies that the price criterion is no longer relevant to be
used as a basis in selecting suppliers. Based on some historical data, it is agreed that there are four criteria to be
used in the selection of suppliers, i.e. quality, delivery, completeness and environmental management.
Quality is measured from how close the goods are to the manufacturer's specifications. Delivery is measured
from the ability of suppliers to deliver the goods on time according to the agreed arrangement. Completeness is
measured from the degree of matching between the amount of goods provided by the suppliers and the amount
ordered by the company. Finally, environmental management is measured from the physical condition of the
suppliers workplace with respect to the company standards. In our case, the company has three possible
suppliers for packaging: Supplier1, Supplier2 and Supplier3.
Calculation of weights was carried out using the AHP supplier. After selected the suppliers and established
the suppliers criteria, pairwise comparisons were carried out to find out the normalized weighted value of each
supplier and each criterion. Pairwise comparison for each supplier for each criterion can be seen in Table 1.
Pairwise comparison for each criterion can be seen in Table 2.
Table 1. Pairwise comparison for suppliers
Quality Delivery
Supplier 1 2 3 weight CI=0.003 Supplier 1 2 3 weight CI=0.037
1 1.00 0.50 0.33 0.163 1 1.00 0.33 3.00 0.272
2 2.00 1.00 0.50 0.297
CR = 0.005
2 3.00 1.00 4.00 0.608
CR=0.064
3 3.00 2.00 1.00 0.539 3 0.33 0.25 1.00 0.120
5.00 4.50 1.83 1.000 4.33 1.58 8.00 1.000
Completeness Environmental Management
Supplier 1 2 3 weight CI=0.027 Supplier 1 2 3 weight CI=0.009
1 1.00 0.25 0.50 0.133 1 1.00 0.25 0.33 0.123
2 4.00 1.00 4.00 0.655
CR=0.047
2 4.00 1.00 2.00 0.557
CR=0.016
3 2.00 0.25 1.00 0.211 3 3.00 0.50 1.00 0.320
7.00 1.50 5.50 1.000 8.00 1.75 3.33 1.000
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Table 2. Pairwise comparison for criteria
Criteria Quality Delivery Completeness Environmental weighted
CI= 0.015
CR =0.017
Quality 1.000 2.000 2.000 3.000 0.423
Delivery 0.500 1.000 2.000 2.000 0.271
Completeness 0.500 0.500 1.000 1.000 0.162
Environmental 0.333 0.500 1.000 1.000 0.144
For quality criteria, the normalized weighted value of Supplier1, Supplier2, and Supplier3 are 0.163, 0.297,
and 0.539, respectively, and the Consistency Index (CI) is 0.003. For delivery criteria, the normalized weighted
value of Supplier1, Supplier2, and Supplier3 are 0.272, 0.608, and 0.120, respectively, and the CI value is 0.037.
For completeness criteria, the normalized weighted value of Supplier1, Supplier2, and Supplier3 are 0.133,
0.655, and 0.211, respectively, and the CI value is 0.027. For environmental management criteria, the normalized
weighted value of Supplier1, Supplier2, and Supplier3 are 0.123, 0.557, and 0.320, respectively, and the CI value
is 0.009. The value of Consistency Ratio (CR) is obtained by dividing CI with Random Index (0.58). If CR <
0.1, it means the degree of consistency is satisfactory. Since CR for all of our results it means that the
management evaluation for all criteria is acceptable or consistent. The normalized weighted value for each
criterion, i.e. quality, delivery, completeness, and environmental management, are 0,423; 0,271; 0.162; and
0,144, respectively.
Based on the January-March 2012 records in the Purchasing Department, the following data for goods
deficit, amount of defective products as received from suppliers, suppliers performance based on delivery
criteria and environmental management data were obtained as shown in Table 3. Historical data for defective
products were used for the Quality criteria. If supplier delivers a product matching the specification, the assigned
value is 0, and 1 if otherwise. Delivery historical data were used for delivery criteria. If supplier delivers on-
time, the assigned value is 0 and if the delivery is late, the assigned value is 1, with unit of weeks as the
reference. Goods deficit data were used for the completeness criteria. If supplier deliver goods precisely as
ordered, 0 is assigned, and 1 if the amount is less than that in the purchase order. For these four criteria, the loss
calculation used the-lower-the-better method. Historical data for supplier environmental management criteria
were obtained from the auditing process on the suppliers working environment. This assessment was carried out
by a professional in the field of environmental audit. If the suppliers physical condition meets the company
standards, 0 is assigned, and 1 if otherwise.
Criteria specification limits and the corresponding penalties imposed on the suppliers should there be
violations against the rules are shown in Table 4. The specification limits and the penalties were determined by
the company according to the contract agreed upon with the supplier, based on the memo from the Head of
Purchasing Department.
Table 3. Historical data
Goods Deficit Data Defective Products Data
Supplier Supplier
Month A B C Month A B C
January 1 1 0 January 1 0 0
February 0 0 0 February 0 1 0
March 0 0 0 March 1 0 1
Late Delivery Data Non-recyclable Products Data
Supplier Supplier
Month A B C Month A B C
January 0 0 0 January 1 1 1
February 0 0 1 February 0 1 1
March 1 0 0 March 0 1 0
Table 4. Criteria specification limits and costs due to violations
Criteria Target Tolerance Loss calculation Cost
Quality 0 (no defective products) max 3 lower the better 85000
Delivery 0 (punctual) at most 4 days lower the better 75000
Completeness 0 (amount of goods as ordered) max 3 lower the better 85000
Environmental
management
0 (meets the standard) 1 (sub-standard) lower the better 60000
R. Magdalena Supplier Selection for Food Industry ... 9
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The loss values of each criterion were calculated from equation (2), while the weighted Taguchi value is the
loss value multiplied by the weight value of each criterion. The calculation of loss, weighted Taguchi, and
normalized values are summarized in Table 5.
Table 5. Loss value calculation for each criterion
quality delivery completeness
environmental
management
weighted
Taguchi normalized
1 52469 10417 20988 133333 47617 0.231
2 20988 0 20988 600000 98678 0.479
3 20988 10417 0 333333 59701 0.290
Based on pairwise comparison of suppliers for each criterion and calculated normalized loss, a multi-
objective fuzzy linear programming model to select packaging supplier was developed. This stage involves
construction of multi-objective linear programming model as a single-objective supplier selection problem using
only one objective each time. The multi-objective linear programming of our application is presented as max Z
1
to Z
5
.
Max Z
1
= 0.163 X
1
+ 0.297 X
2
+ 0.539 X
3
Max Z
2
= 0.272 X
1
+ 0.608 X
2
+ 0.120 X
3
Max Z
3
= 0.133 X
1
+ 0.655 X
2
+ 0.211 X
3
Max Z
4
= 0.123 X
1
+ 0.557 X
2
+ 0.320 X
3
Max Z
5
= 0.231 X
1
+ 0.479 X
2
+ 0.290 X
3
S/T
X
1
+ X
2
+ X
3
= 1
X
1
, X
2
, X
3
0
Then, the linear membership function is used for fuzzifying the objective functions and the constraints for
the above problem. The data set for the values of the lower bounds
min
k
Z and upper bounds
max
k
Z of the
objective functions are provided in Table 6.
Table 6. Data set for the membership functions
max
k
Z (=1)
min
k
Z (=0)
Z
1
-Quality 0.539 0.163
Z
2
-Delivery 0.608 0.120
Z
3
-Completeness 0.655 0.133
Z
4
-Environmental Management 0.557 0.123
Z
5
- Loss 0.479 0.231
In this stage, the membership functions for five objective functions and the constraints are provided to
maximize the performance of suppliers related to each main supplier selection criterion. To exemplify, we take
the performance assessment criteria to show the membership function of Z1. The objective of each membership
function is to maximize the supplier criteria and minimize the loss value. The membership functions are
formulated as shown earlier in Figure 1. The membership functions of supplier selection model for food industry
are formulated as shown in Figure 3.
10 R. Magdalena Supplier Selection for Food Industry ...
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Conference Proceedings 2012 ISBN: 978-979-15458-4-6
Fig. 3: The membership function of supplier selection model for food industry
The fuzzy multi-objective formulation of the application as in equations (4) and (5) is shown below.
Max Z
1
= 0.163 X
1
+ 0.297 X
2
+ 0.539 X
3
0
1
Z
Max Z
2
= 0.272 X
1
+ 0.608 X
2
+ 0.120 X
3
0
2
Z
Max Z
3
= 0.133 X
1
+ 0.655 X
2
+ 0.211 X
3
0
3
Z
Max Z
4
= 0.123 X
1
+ 0.557 X
2
+ 0.320 X
3
0
4
Z
Max Z
5
= 0.231 X
1
+ 0.479 X
2
+ 0.290 X
3
0
5
Z
S/T
X
1
+ X
2
+ X
3
= 1
X
1
, X
2
, X
3
0
After the membership functions were obtained, with the help of equations (6), (7), and (8), the single
Taguchi Loss Function-Fuzzy-AHP can be constructed as follows:
Max w
1
(0.423
1
+ 0.271
2
+ 0.162
3
+ 0.144
4
) + w
2
(
5
)
S/T
i
X
i
= 1
X
i
0
0
1
,
2
,
3
,
4
,
5
1
min max
max
) (
k k
k k
Z Z
x Z Z
5
X
1
+ X
2
+ X
3
= 1
X
1
, X
2
, X
3
0
0
1
,
2
,
3
,
4
,
5
1
After the model of Taguchi loss function is created, the problem is solved using Scilab software to obtain X
1
= 1, X
2
= 0 and X
3
= 0, meaning that the selected supplier is Supplier 1. When each value of X
i
is substituted
into the objective function, Z
i
values are obtained.
Z
1
= 0.163, Z
2
= 0.272, Z
3
= 0.133, Z
4
= 0.123, Z
5
= 0.231
1
=
1 Z
= 1
2
=
2 Z
=0.689
3
=
3 Z
=1
4
=
4 Z
=1
5
=
1 Z
=1
The obtained values for each membership function show that the achievement levels of Z
1
quality criteria,
Z
3
completeness criteria, Z
4
environmental management criteria and Z
5
loss are higher than Z
2
delivery
criteria. In other words, the achievement level of the objective functions corresponds to the priority of supplier
selection criteria (based on decision makers preferences) and indicates that Supplier 1 is selected as the
optimum supplier.
5. Conclusion and Recommendation
The aim of this study was to perform supplier selection to choose the best supplier by integrating the
Taguchi Loss Function with Fuzzy-AHP with respect to several criteria, namely the quality, delivery,
completeness, and environmental management.
Based on the results of data processing, it can be concluded that by integrating the Taguchi loss function
with Fuzzy-AHP, Supplier 1 was found to be the best packaging supplier alternative.
Future studies are expected to add other criteria, such as risk factors and uncertainty factors. In addition,
further research can use other methods such as combining fuzzy-AHP method with a utility function.
References
[1] Amid, A., Ghodsypour, S. H., and OBrien, C. (2006), Fuzzy Multiobjective Linear Model for Supplier Selection in
a Supply Chain, International Journal Production Economics, Vol. 104, pp. 394407.
163 . 0 539 . 0
) 539 . 0 297 . 0 163 . 0 ( 539 . 0
3 2 1
+ + X X X
120 . 0 608 . 0
) 120 . 0 608 . 0 272 . 0 ( 608 . 0
3 2 1
+ + X X X
133 . 0 655 . 0
) 211 . 0 655 . 0 133 . 0 ( 655 . 0
3 2 1
+ + X X X
123 . 0 557 . 0
) 320 . 0 557 . 0 123 . 0 ( 557 . 0
3 2 1
+ + X X X
231 . 0 479 . 0
) 290 . 0 479 . 0 231 . 0 ( 479 . 0
3 2 1
+ + X X X
12 R. Magdalena Supplier Selection for Food Industry ...
The 3rd International Conference on Technology and Operations Management (ICTOM)
Conference Proceedings 2012 ISBN: 978-979-15458-4-6
[2] Bellman, R.G. and Zadeh, L.A. (1970), Decision making in a fuzzy environment, Management Science, Vol. 17 No.
2, pp. 141-64.
[3] Guller, M. E. (2008), Incorporating Multi-Criteria Considerations into Supplier Selection Problem Using Analytical
Hierarchy Process: A Case Study, Journal of Yasar University,Vol. 3 No. 12, pp. 1787-1810.
[4] Indrapriyatna, A. S., Meuthia, Y., Fatrias, D, Gusti, Monalisa, G. (2011), Integrasi Taguchi Loss Function dengan
Fuzzy Analytical Hierarchy Process dalam Pemilihan Pemasok, Jurnal Teknik Industri, Vol. 13, No. 2, pp.65-73.
[5] Nydick R., and Hill R. P. (1992), Using the Analytic Hierarchy Process to Structure the Supplier Selection
Procedure, International Journal of Purchasing and Materials Management, Vol. 28 No. 2, pp. 31-36.
[6] Pi, W. N., and Low, C. (2005), Supplier Evaluation and Selection Using Taguchi Loss Functions, The International
Journal of Advanced Manufacturing Technology, Vol. 26, pp. 155160.
[7] Saaty, T. L. (1994), Fundamentals of Decision Making and Priority Theory, RWS Publications, Pittsburgh.
[8] Sarkis, J., and Talluri, S. (2002), A Model for Strategic Supplier Selection, Journal of Supply Chain Management,
Vol. 38 No.1, pp. 18-29.
[9] Sevkli, M., Koh, S. C., Lenny, Zaim, S., Demirbag, M., and Tatoglu, E. (2008), Hybrid Analytical Hierarchy
Process Model for Supplier Selection, Journal of Industrial Management and Data Systems, Vol. 108 No.1, pp. 122-
142
[10] Taguchi, G., Elsayed A. E., and Thomas C. S. (1989), Quality Engineering In Production System, Mc-Graw Hill
Book Company.
[11] Taylor, B. W. (2010), Introduction to Management Science, 10
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Cite this paper
Magdalena, R. (2012). Supplier Selection for Food Industry: A Combination of Taguchi Loss Function and Fuzzy
Analytical Hierarchy Process, Proceedings of The 3
rd
International Conference on Technology and Operations
Management: Sustaining Competitiveness through Green Technology Management, BandungIndonesia (July 4-6), pp.
3-12. ISBN: 978-979-15458-4-6.
Available at www.ictom.info
Conference Proceedings 2012 ISBN: 978-979-15458-4-6
www.sbm.itb.ac.id www.cob.uum.edu.my
The 3rd International Conference on Technology and Operations Management
Sustaining Competitiveness through Green Technology Management
Bandung Indonesia, July 4-6, 2012
Comparison of Environment Impact between Conventional and
Cold Chain Management System in Paprika Distribution Process
Eidelweijs A. Putri
1,2,*
, Kiyoshi Dowaki
1
, Gatot Yudoko
2
, Kenji Koido
1
1
Department of Industrial Administration (IA) - Tokyo University of Science (TUS),
1-3 Kagurazaka, Shinjyuku-ku, Tokyo 162-8601, Japan
2
School of Business and Management (SBM) Institut Teknologi Bandung (ITB),
Jl. Ganesha 10 (Gedung SBM-ITB), Bandung 40132, Indonesia
Abstract. Pasir Langu village in Cisarua, West Java is the largest central production area of paprika in Indonesia. In
agriculture sector, the boycott of product including for paprika commonly occurs and would become a major problem.
Through the behavior, the paprika is unfit for market in retailer side finally. In average, for every 200 kg of paprika the
rejection number is 3 kg. This situation caused money loss for wholesalers and waste. In one year they can lose
approximately IDR 11,700,000 because of paprikas boycott. The cold chain is a logistic system that provides a series of
facilities for maintaining ideal storage conditions for perishables from point of origin to the point of consumption in the food
supply chain. The cold chain refers to the transportation system which is managed by the temperature sensitively. That is, we
consider the supply chain due to cold energy and refrigerated packaging and the logistics to secure the integrity of the product
shipment. Therefore, the paprika wholesalers in Pasir Langu village recently are developing cold chain management system
to maintain quality of paprika so that number of rejection can be reduced. The objective of this study is to compare
environmental impact between conventional and cold chain management system in paprika distribution process using Life
Cycle Assessment (LCA) methodology and propose Photovoltaic (PV) system in paprika distribution process, and we
propose the environmentally friendly distribution system so as to secure the quality of products. The result implies that the
cold chain system produces more CO
2
emission compared to conventional system. However, due to the promotion of PV
system, the emission would be reduced. For future research, it is necessary to reduce CO
2
emission from transportation
process since this process is biggest contributor of CO
2
emission at whole distribution process.
Keywords: LCA, Environmentally friendly distribution, Paprika, Cold chain, PV system
1. Introduction
The demand pull created by an agro-industrial enterprise stimulates businesses well beyond the closest links
with its direct input suppliers and product buyers; a whole range of ancillary services and supporting activities in
the secondary and tertiary sectors of the economy are also positively impacted. Because of the generally
* Corresponding author. Tel.: +81-906-0100-499; fax: +81-4-7122-4566
E-mail address: eidelweijs@sbm-itb.ac.id
14 E.A. Putri, K. Dowaki, G. Yudoko, and K. Koido Comparison of Environment Impact ...
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Conference Proceedings 2012 ISBN: 978-979-15458-4-6
perishable and bulky characteristics of agricultural products, many agro-industrial plants and smaller-scale agro-
processing enterprises tend to be located close to their major sources of raw materials [1]. In addition, the
boycott due to poor quality of agriculture products such as rotten and overripe one, etc commonly occurs and
becomes a major problem in distribution process of agriculture products.
This condition also happens for paprika. In Indonesia, paprika is categorized as valuable vegetable. Pasir
Langu village in West Java province is the largest central production of paprika in Indonesia. The boycott of
paprika is occurring in a retailer side because of rotten one. In average, for every 200 kg paprika the rejection
number is 3 kg and it is likely to be equal to IDR 45,000. That is, the paprika wholesalers would lose their
money of approximately IDR 11,700,000. The aspects due to paprika not only caused the financial loss for both
farmers and wholesalers but also produce the waste.
Therefore, the paprika wholesalers in Pasir Langu village develop the cold chain management system to
maintain paprika quality recently. Cold chain is a logistic system that provides a series of facilities for
maintaining ideal storage conditions for perishables from point of origin to the point of consumption in the food
supply chain [2]. The cold chain refers to the transportation system which is managed by the temperature
sensitively. That is, we consider the supply chain due to cold energy and refrigerated packaging and the logistics
to secure the integrity of the product shipment [3]. A cooling process of fresh fruit and vegetables before
processing them removes heat around them, and that would inhibit decay and help maintain moisture content,
sugars, vitamins, and starches, while the quick freezing of processed fresh fruit and vegetable maintain the
quality, nutritional value, and physical properties for extended periods [4].
On the other hand, due to the promotion of cold chain management system, that is, the system, which
requires electricity for pre-cooling and storage in cold circumstance and fossil fuel for refrigerated transportation,
would generate more CO
2
emission compared to the conventional one. The impact of agriculture on the
environment is an extremely important issue since the ecological influence for natural resources is already
overstrained. In general, the agricultural impact on nature is well known and the agricultural environmental
indicators have been developed for national monitoring systems. Thus, the efficient methods to comprehend the
agricultural impacts on the environment indicators with sustainable factors are significantly required [5].
Therefore, the objectives of this study are to propose the cold chain management system and estimate CO
2
emission against the conventional one by using LCA methodology. In addition, in order to abate its impact, we
propose the advanced system of paprika distribution process with PV system. The result from this study would
be contributed to the development of cold chain management system so as to keep environmentally friendly
condition and to maintain the paprika quality.
2. Method
2.1. LCA Methodology
LCA is a technique that aims at addressing the environmental aspects of a product and their potential
environmental impacts throughout that products life cycle. The term product refers to both goods and services.
A products life cycle includes all stages of a product system, from raw material acquisition or natural resource
production to the disposal of the product at the end of its life, including extracting and processing of raw
materials; manufacturing; distribution; use; re-use; maintenance; recycling; and final disposal (i.e., cradle-to-
grave) [6].
The most well-known application of LCA can compare the total environment impact of a product or service
with an alternative (comparable) product or service. LCA is often considered as a tool that provides the answer
to the question of which product has least environmental impact [7].
The tasks with suppliers and supply chain issues are rapidly increasing as an important strategic
consideration. Traditionally, enterprises manage suppliers in order to optimize the supply chain, the flow of
information, the materials and funds, and the logistics of supply and distribution, minimize cycle times and costs
in order to integrate processes and functions for the supply chain. A life cycle management framework is for the
improvement which is continuous and based on a full system or a life cycle perspective; thus, the supply chain
management practices are an entry gate for a life cycle management [8].
A LCA methodology was used to analyse distribution process of paprika in Pasir Langu village. The system
boundary of paprika distribution process in Pasir Langu village is shown in Fig. 1. In the distribution process,
there are four main processes such as cultivation, transportation from greenhouse to wholesaler, packaging, and
transportation from wholesaler to retailer. Based on these conditions, the CO
2
emissions from our proposed
systems were estimated and the environmental impact was argued.
E.A. Putri, K. Dowaki, G. Yudoko, and K. Koido Comparison of Environment Impact ... 15
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Fig. 1: System Boundary of Paprika Distribution Process in Pasir Langu Village
2.2. Scenarios and Data Collection
In this study, there are three scenarios of calculating CO
2
emission both for conventional and cold chain
management system. These scenarios are based on the differences of distance from greenhouse to wholesaler and
from wholesaler to retailer. First scenario is calculating the farthest distance, second scenario is calculating the
nearest distance and third scenario is calculating the average distance.
The data collection was conducted through an interview, a field observation, and a review of secondary data.
The interviews in Pasir Langu village were conducted with key workers from paprika business such as farmers
and wholesaler in order to clarify the factors on paprika distribution process in the life cycle stage. The field
work regarding paprika distribution process in Pasir Langu village was implemented in April to September 2011.
The observations include the site visits to paprikas greenhouse and wholesaler. Secondary data was collected by
websites, books, national and international journal.
3. Result and Discussion
3.1. LCA Conventional System
A LCA methodology in this study was used to calculate the CO
2
emission from four main processes at
paprika distribution system in Pasir Langu village (see Fig. 2). Eq. (1) was used to calculate CO
2
emission.
(1)
where, A
i
is the direct or indirect energy input of i-th energy source (electricity, fertilizers, and fuel), FE
i
is the i-
th specific emission factor. The suffix of j is represented as the elements of cultivation, transportation from
greenhouse to wholesaler, packaging, and transportation from wholesaler to retailer, respectively. There are three
scenarios for estimating CO
2
emission based on the differences of distance both in transportation from
greenhouse to wholesaler and transportation from wholesaler to retailer.
Fig. 2: Paprika Distribution Process: Conventional System
(1) Cultivation
According to the farmers interview, the greenhouse area was assumed to be 1000 m
2
, in which 4,000
paprika plants can be plant. A cultivation period of paprika per one cycle would require 8 months or 32 weeks.
Every paprika plant consists of 5 step harvesting processes and 3 pieces of paprika with average weight of 150 g
ECO
2 j
= A
i
x FE
i
16 E.A. Putri, K. Dowaki, G. Yudoko, and K. Koido Comparison of Environment Impact ...
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would be yielded in each process. That is, the annual average yields for every 1000 m
2
greenhouse would be
9,000 kg.
A cultivation process consists of two main processes, seedling and planting. Both seedling and planting
processes was done in the same greenhouse, so for electricity and fertilizers usage was calculated as one unit for
both processes. In the paprika cultivation process, the following factors are necessary; charcoal husk as a media
planting, poly bags which are made by plastics, water, seed, pesticides, fertilizers, and electricity which uses for
some equipment of a pump and a lamp operation. From those inputs, the indirect CO
2
emissions of fertilizers and
electricity should be considered and the rests are ignored.
The farmers in Pasir Langu village generally use AB Mix fertilizers which consists of N, P, and K in
cultivation process and the annual consumption is 960 kg/yr. Also, they have to pay IDR 200,000 in average on
electricity fee of 5 greenhouses to government electricity company (PLN). Using the data from the government
electricity company, we estimated the average electricity consumption of 87.91 kWh/yr for each greenhouse.
Here, note that the price per kWh is IDR 455 and the annual electricity consumption is 703.297 kWh in the total.
Table 1 is shown factor emission for each variable.
Based on those data, the CO
2
emissions of both consumption of electricity and fertilizers are 2.098 gCO
2
per
paprika and 3.2 gCO
2
per paprika, respectively. Using Eq. (1), the total CO
2
emission from cultivation process is
5.298 gCO
2
per paprika.
Table 1: Factor Emission
No Variable Factor Emission Source
1 Electricity 0.179 kgCO
2
/ kWh [9]
2 Fertilizers (N,P,K) 0.2 kgCO
2
/ kg fertilizer [10]
3 Gasoline 2.31 kgCO
2
/ L [11]
4 Diesel 2.68 kgCO
2
/ L [11]
(2) Transportation from greenhouse to wholesaler
In average, a truck with 1 ton capacity goes to 10 greenhouses for collecting paprika every day. The load
capacity is 50 kg due to the limitation of space. The farthest distance is 1.5 km, the nearest is 0.5 km, and the
average from greenhouse to wholesaler is 0.95 km, and it is assumed that the frequency of truck is 4 operations
of 0.5 km case, 3 ones of 1 km case and 3 ones of 1.5 km case every day. The fuel consumption of the truck is 15
km/L. Using Eq. (1), the CO
2
emissions of transportation from greenhouse to wholesaler for the farthest, the
nearest, and the average distance are 0.693 gCO
2
per paprika, 0.231 gCO
2
per paprika, and 0.439 gCO
2
per
paprika, respectively.
(3) Packaging
The packaging process is doing at wholesaler in Pasir Langu village. The packaging house, in average, has
to pay IDR 150,000 per a month for electricity. Therefore, assuming that price per kWh is IDR 455, the average
electricity consumption per a month for packing and sorting them is 329.67 kWh per a month, that is, 10.989
kWh per a day. In one day, the packaging house can receive around 500 kg paprika in order to be sorted and
packed. Thus, using Eq. (1), the total CO
2
emission from packaging process is 0.590 gCO
2
per paprika.
(4) Transportation from wholesaler to retailer
The wholesaler distributes paprika for export and local market through retailer and directly to the traditional
market. For the export market, there is the case that paprika from Pasir Langu village is export to Singapore. The
paprika for local market is distributed through local distributors who distribute to restaurants and/or
supermarkets. The wholesaler has to send paprika three times per a week for each market. The distance from
Pasir Langu village to exporter is 60 km, and that of local distributor is 20.4 km and that to the traditional market
has 29 km. Thus, the total distance from wholesaler to retailer is 36.467 km in average.
The Wholesaler sends the products of 100 kg to 400 kg to exporter. Those of 200 kg to 500 kg for local
distributor, and of 100 kg for traditional market are delivered. In the distributing paprika to retailer, a truck is
required 15 km/L of gasoline. This 1 tons truck has an average load weight of 233.3 kg paprika for each trip. As
we mentioned before, there are three scenarios to calculate CO
2
emission based on the distance from wholesaler
to retailer. Using Eq. (1), the CO
2
emissions from transportation process from wholesaler to retailer for each
scenario are 5.940 gCO
2
per paprika, 2.020 gCO
2
per paprika, and 3.610 gCO
2
per paprika, respectively. As a
result, the total CO
2
emissions at paprika distribution process for each scenario are shown in Table 2.
E.A. Putri, K. Dowaki, G. Yudoko, and K. Koido Comparison of Environment Impact ... 17
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Table 2: CO
2
Emission in gCO
2
per paprika at Paprika Distribution Process: Conventional System
Process
Farthest
Distance
Nearest
Distance
Average
Distance
Cultivation (Seedling and Planting) 5.298 5.298 5.298
Transportation (from greenhouse to wholesaler) 0.693 0.231 0.439
Packaging 0.590 0.590 0.590
Transportation (from wholesaler to retailer) 5.940 2.020 3.610
TOTAL CO
2
Emission from whole system 12.521 8.139 9.937
Fig. 3: Percentage CO
2
Emission of the farthest distance at Each Process: Conventional System.
Fig. 4: Percentage CO
2
Emission of the nearest distance at Each Process: Conventional System.
Fig. 5: Percentage CO
2
Emission of the average distance at Each Process: Conventional System.
The percentage of CO
2
emission from the farthest distance (see Fig. 3) shows that transportation from
wholesaler to retailer is the highest CO
2
emission (47.4%), while that of CO
2
emission from the nearest distance
and the average distance (see Figs. 4 and 5) shows that cultivation process is highest CO
2
emission (65.1% and
53.5%). The emissions of gasoline and fertilizers usage are attributed to the highest CO
2
emission.
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3.2. LCA Cold Chain Management System
Next, the cold chain management system (see Fig. 6) is assumed to be implemented in Pasir Langu village
in order to maintain the quality of paprika and reduce the boycott products. Since December 2011, the cold
storage was built in Pasir Langu village. The cold storage is equipment in cold chain. The cold storage is a box
made of insulated walls, ceiling and floor that fitted with an insulated door. It is kept at a pre-set temperature by
refrigeration machinery. In this system, the refrigerated transportation will be used to carry paprika from
wholesaler to retailer.
In the cold chain management system, pre-cooling and storage are required to be done in cold storage. This
process is done at wholesaler after packaging process. The facility area of cold storage in Pasir Langu village is
24 m
3
and that is able to store 2,700 kg of paprika for 7 days. At that time, the electricity consumption to operate
the cold storage is 54.601 kWh per a day, that is, 382.204 kWh per a year. Using Eq. (1), the CO
2
emission from
pre-cooling and storage is 3.801 gCO
2
per paprika.
Fig. 6: Paprika Distribution Process: Cold Chain Management System.
On the other hand, since the refrigerated transportation is also required to carry paprika from wholesaler to
retailer in order to keep temperature condition of paprika, the quality of paprika can be maintained. Based on
interview, the fuel consumption for refrigerated transportation is 4 km/L or 0.25 L/km, so total fuel consumption
for one trip from wholesaler to retailer is 10.05 L. Using Eq. (1), the CO
2
emission of the farthest, the nearest,
and the average distance are 25.843 gCO
2
per paprika, 8.787 gCO
2
per paprika, and 15.707 gCO
2
per paprika,
respectively.
Table 3: CO
2
Emission in gCO
2
per paprika at Paprika Distribution Process: Cold Chain Management System
Process
Farthest
Distance
Nearest
Distance
Average
Distance
Cultivation (Seedling and Planting) 5.298 5.298 5.298
Transportation 1 (from greenhouse to wholesaler) 0.693 0.231 0.439
Packaging 0.590 0.590 0.590
Pre-cooling and storage 3.801 3.801 3.801
Refrigerated transportation (from wholesaler to retailer) 25.843 8.787 15.707
TOTAL CO
2
Emission from whole system 36.225 18.707 25.835
Thus, the total CO
2
emissions at paprika distribution process for cold chain management system for each
scenario are shown in Table 3. The percentage of CO
2
emission from three scenarios (see Figs. 7, 8, and 9)
shows that of transportation from wholesaler to retailer would be the highest CO
2
emission in the total process
due to the high amount fuel of refrigerated transportation.
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Fig. 7: Percentage CO
2
Emission of the farthest distance at Each Process: Cold Chain Management System.
Fig. 8: Percentage CO
2
Emission of the nearest distance at Each Process: Cold Chain Management System.
Fig. 9: Percentage CO
2
Emission of the average distance at Each Process: Cold Chain Management System.
3.3. PV System for Paprika Distribution Process
Next, it is an extremely important purpose to reduce CO
2
emission for the whole system. Here, the specific
CO
2
emission of electricity in our target area (Indonesia) is very large due to much of fossil fuel consumption.
However, there would be plenty of solar resource in Indonesia. Recently, the PV (photovoltaic) system would be
generalized as one of countermeasure of CO
2
emission reduction. Also, this is one of promising system in the
renewable energy ones. In the near future, the number of environmentally friendly system will be increased in
any countries.
The PV system can convert directly sunlight dissociation energy to electric energy. The electric energy
yielded by PV would be little influenced by the sunlight intensity, so that PV can produce electric energy which
is equivalent to the received sunlight [12]. The daily solar radiation data from NASA Surface Meteorology
20 E.A. Putri, K. Dowaki, G. Yudoko, and K. Koido Comparison of Environment Impact ...
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and/or Solar Energy website was used in this study. The average daily solar radiation in Pasir Langu village,
Cisaura is 4.81 kWh/m
2
/day.
The objective in this scenario is to promote PV system installation in greenhouse, packaging house, and cold
storage in order to mitigate CO
2
emission by decreasing electricity usage. This PV hybrid system with electrical
grid of PLN without battery equipment is assumed to yield continuously so as to meet the supply of electric
energy [13]. Here, the PV system would supply the electricity of 30% and the rest electricity of 70% would be
compensated by PLN. Eq. (2) was used to calculate the electricity demand (E
B
) which would be supplied by PV
system (E
A
). Eq. (3) was used to calculate the total energy system (E
T
). Due to Eq. (4), the capacity of PV system
(CPV) whose factor adjustment is 1.1 was estimated, and the total number of PV module which should be
installed to be supplied for energy demand in each process was estimated due to Eq. (5) [12]. In this study, the
capacity of PV module has 100 Wp at 24 V. Table 7 shows the performance results of PV module in the sub-
process of cultivation, packaging, pre-cooling and storage, respectively.
Table 4: Performance Results of PV System Calculation
Data Cultivation Packaging Cold Storage
Energy Demand (E
B
) 2,930 Wh/day 10,989 Wh/day 54,601 Wh/day
Energy from PV (E
A
) 879 Wh 3,296 Wh 16,380 Wh
Total Energy (E
T
) 1,010 Wh 3,791 Wh 18,837 Wh
Capacity of PV (CPV) 231W 867 W 4,307 W
Total PV module 3 9 44
The utilization of solar energy by PV system causes very little environmental problem and provides no
greenhouse effect [14]. The solar energy supply due to a clean energy source does not emit pollutant substances
including CO
2
gas during its operation. On the other hand, in LCA, the environmental load (ex. indirect factors
of manufacturing and materials and so on) from another viewpoint might have to be considered [15]. However,
we referred to the operation only, that is, assuming that PV system produces electricity, we treated the specific
CO
2
emission of PV system as zero emission. As a result (see Table 5), the promotion of PV system in
greenhouse, packaging house, and cold storage, will be able to reduce 1.947 gCO
2
per paprika from whole
distribution process, that is, the percentage of 11.9 % from cultivation , 30% from packaging, and 30% from cold
storage, respectively.
Table 5: CO
2
Emission in gCO
2
per paprika at Paprika Distribution Process: PV system
Process
Farthest
Distance
Nearest
Distance
Average
Distance
Cultivation (Seedling and Planting) 4.669 4.669 4.669
Transportation 1 (from greenhouse to wholesaler) 0.693 0.231 0.439
Packaging 0.413 0.413 0.413
Pre-cooling and storage 2.661 2.661 2.661
Refrigerated transportation (from wholesaler to retailer) 25.843 8.787 15.707
TOTAL CO
2
Emission from whole system 34.278 16.760 23.888
4. Conclusions and Future Research
This paper has shown the calculation of CO
2
emission on paprika cold chain model using LCA methodology.
Based on the result above, the CO
2
emissions from cold chain management system are approximately 2-3 times
higher than a conventional system. In general, that would emit higher CO
2
gas; however, the advanced system
with PV system would contribute environment aspect. Simultaneously, we would be able to secure the quality of
paprika quality.
E
A
= 30% x E
B
(2)
E
T
= E
A
+ (15% x E
A
) (3)
(4)
(5)
E.A. Putri, K. Dowaki, G. Yudoko, and K. Koido Comparison of Environment Impact ... 21
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Therefore, it is important to make optimization model in cold chain management system to mitigate CO
2
emission. Proposing PV system for greenhouse, packaging house, and cold storage reduce CO
2
emission and/or
probably maintain paprika quality.
As other system candidates for paprika cultivation system, Blue-Tower (BT) system also can be used in
order to reduce the CO
2
emission. This is due to the biomass resources. In the previous research [16], it was
shown that in Japan, paprika was cultivated in greenhouse which requires electricity, thermal energy and CO
2
gas as growth agents. The CO
2
emissions from paprika conventional cultivation system of 2 ha to 4 ha were
582.4 to 573.9 gCO
2
per paprika, respectively. Inversely, due to promotion of BT-CGS (Blue-Tower-
cogeneration) or BT-CGS (SOFC-HP) case in the paprika cultivation facility, it enables to mitigate CO
2
emission as shown in Tables 6 and 7.
Table 6: CO
2
Emission and Reduction (BT-GE)
Case name (Cultivation
scale, BT-plant scale)
CO
2
Emission per a paprika
(gCO
2
per paprika)
Rate of CO
2
Reduction (%)
GE-Case1 (2ha 15t) 104.6 82.0%
GE-Case1 (2ha 30t) 68.6 88.2%
GE-Case1 (2ha 60t) 98.9 83.0%
GE-Case1 (4ha 15t) 257.8 55.1%
GE-Case1 (4ha 30t) 93.2 83.8%
GE-Case1 (4ha 60t) 67.4 88.3%
Table 7: CO
2
Emission and Reduction (BT-SOFC-HP)
Case name (Cultivation
scale, BT-plant scale)
CO
2
Emission per a paprika
(gCO
2
per paprika)
Rate of CO
2
Reduction (%)
SOFC-Case1 (2ha 15t) 60.6 89.6%
SOFC-Case1 (2ha 30t) 68.5 88.2%
SOFC-Case1 (2ha 60t) 98.9 83.0%
SOFC-Case1 (4ha 15t) 92.1 84.0%
SOFC-Case1 (4ha 30t) 58.4 89.9%
SOFC-Case1 (4ha 60t) 66.9 88.4%
For future research, it is necessary to reduce CO
2
emission from transportation process since transportation
is the biggest contributor of CO
2
emission in cold chain management system. The CO
2
emission reduction from
transportation process can be done by switching solar system for refrigerated transportation. Also, we need to
consider the scale merit, that is, we have to refer to the relationship between the scale of renewable energy
system and that of cultivation from the viewpoints of environmental impact and/or the cost.
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[11] Gratimah, R. (2009), Analisis Kebutuhan Hutan Kota sebagai Penyerap Gas CO
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Conference Proceedings 2012 ISBN: 978-979-15458-4-6
[12] Bien, et al. (2008), Perancangan Sistem Hibrid Pembangkit Listrik Tenaga Surya Dengan Jala-Jala Listrik PLN
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Cite this paper
Putri, E.A., Dowaki, K., Yudoko, G., and Koido, K. (2012). Comparison of Environment Impact between Conventional
and Cold Chain Management System in Paprika Distribution Process, Proceedings of The 3
rd
International Conference
on Technology and Operations Management: Sustaining Competitiveness through Green Technology Management,
BandungIndonesia (July 4-6), pp. 13-22. ISBN: 978-979-15458-4-6.
Available at www.ictom.info
Conference Proceedings 2012 ISBN: 978-979-15458-4-6
www.sbm.itb.ac.id www.cob.uum.edu.my
The 3rd International Conference on Technology and Operations Management
Sustaining Competitiveness through Green Technology Management
Bandung Indonesia, July 4-6, 2012
Is Halal certification process green?
Mohd Rizal Razalli
1,*
, Suzzaini Abdullah
1
, Rushami Zien Yusoff
1
1
Universiti Utara Malaysia (UUM),
Sintok 06010, Kedah Darul Aman, Malaysia
Abstract. These days, the environmental perspective on operations is becoming more common. In fact, any effort in
improving efficiency in the organization is closely related to sustainability of our environment. The Environmental
Management System (EMS) certification such as ISO 14001 has been accepted as the world standard. In addition to these
ISO standards, there are other certifications such as Halal certification. There is no research that investigates the relationship
between Halal Certification process and its effect on our environment. Hence, our main research question is that is Halal
Certification process can be considered as environmental friendly? In this paper, we argue that Halal Certification also
contributes towards green initiatives. We used EDC-UUM as our case study. EDC-UUM is actively seeking the Halal
certification from Malaysian authority agency or JAKIM. In this study, we assessed the perception of the EDC-UUM staff on
the issue of going green. The findings and implications are discussed in the paper.
Keywords: Halal certification, hotel operations, Sustainability, Green
1. Introduction
Environmental perspective on operations is becoming one of the main concerns of many organizations these
days. This fact has driven the growth of research related to green management [1, 2]. The concept, however, is
still relatively new and that has resulted to simple to complex interpretations by practiced organizations [3].
Moreover, the terms may come in different forms such as green technology, going green, sustainable
development, and environmental and eco-friendly. Even though the terms may differ, they have one common
mission that is to protect the earth from wrongdoing of human behaviour for our future generations.
The negative impact of human behaviour is the central issue in green management. All human activities
must be managed carefully without taking for granted about their consequences and to the welfare of the
environment. Despite the challenges to define green management, many previous scholars have attempted to
provide an exact definition for green management. For instance, after a comprehensive review of literature, the
following definition of green management was proposed.
* Corresponding author. Tel.: + 60-4-928-4595
E-mail address: rizal@uum.edu.my
24 M.R. Razalli, S. Abdullah, and R.Z. Yusoff Is Halal certification process ...
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Green management is the organization-wide process of applying innovation to achieve
sustainability, waste reduction, social responsibility and a competitive advantage via continuous
learning and development and by embracing environmental goals and strategies that are fully
integrated with the goals and strategies of the organizations [3].
In the context of Malaysia, the Ministry of Energy, Green Technology and Water defines green technology
as the development and application of products, equipment and systems used to conserve the natural
environment and resources, which minimizes and reduces the negative impact of human activities [4]. The four
pillars of green technology policy include:
Energy- seek to attain energy independence and promote efficient utilization;
Environment - conserve and minimize the impact on the environment;
Economy- enhance the national economic development through the use of technology; and
Social - improve the quality of life for all.
One of the current established accreditations specifically for green or environmental management (EMS) is
ISO 14001: 2004. This is a management tool that can be used by organizations to identify and control the
environmental impact, to continuously improve environmental performance, and to implement a systematic
approach for assessing the environmental objectives and their implementation [5].
Besides this accreditation, less is known about the Halal certification and its relations to protect the
environment. In fact, there is no such study that has been carried out to see how Halal certification could also
relate to the green management. Hence, this paper aims to answer whether or not halal certification process can
be considered as part of the green management practices. In the quest of finding the answer, we have engaged in
a case study approach. We chose one hotel in the northern part of Malaysia as our case. However, we also
carried out a survey to seek their staffs perception quantitatively. The case is described in the later section.
2. Green Management and Halal Certification in the Hotel Industry
2.1. Green Hotels
The concept of green management is also embraced by the hotel industry. In fact, the Green Hotel
Association (GHA) has been established since 1993 to bring together hotels interested in environmental issues
[6]. According to the GHA, green hotels implement environmental programs that save water, energy, and
reduce solid waste to help protect the one and only earth. The implementation of green management in the hotel
industry is critical. The industry is the most environmentally harmful in the hospitality sector to contribute
substantial impact to the environment [7]. These impacts are associated to the waste production, water, and
energy consumption by hoteliers [8].
In addition to conserve the environment, green hotels would also enjoy various economic benefits from
being green. They can benefits from bigger savings and better efficiency through the adoption of environmental
practice in the area of operating cost reduction and operational efficiency [9]. However, a proper strategy and
implementation should be carried out. Some companies may find the green initiatives to result in lower profit
[10]. In terms of the customers, the green hotels would have a substantial potential market [11]. A study
conducted in Malaysia has found that the hotels customers associated being green to product quality, price, and
social responsibility [11]. Because of these benefits, more and more hotels are practicing green and would like
their properties to be recognized as the green hotels. For example, hotels that have received ASEAN Green
Hotel Award in 2010 increased from 5 to 10. Those hotels were the Andaman Langkawi, Shangri-Las Tanjung
Aru Resort and Spa, Mines Wellness Hotel, Shangri-Las Rasa Ria Resort, Renaissance Kuala Lumpur Hotel,
Hotel Melia Kuala Lumpur, Nexus Resort Karambunai, Shangri-Las Rasa Sayang Resort and Spa, Shangri-La
Hotel Kuala Lumpur and the Frangipani Langkawi resort and Spa [12].
2.2. Halal and Its Certification Process
In order to answer our research question, we need to understand the meaning of halal and the halal
certification process. The Halal certification is a complex assessment on food and beverages, consumer goods,
food premises, and slaughter houses. It is a document given to the applicant that guarantee that the items (either
food and beverages, consumer goods, food premises, or slaughter houses) are halal certified or meet the Islamic
principles and can be consumed by Muslim [13]. In Malaysia, the recognized authority by the Malaysian
government for Halal includes Jabatan Kemajuan Islam Malaysia/Department of Islamic Development Malaysia
(JAKIM), Jabatan Agama Islam Negeri/State Islamic Religious Department (JAIN) or Majlis Agama Islam
Negeri/State Islamic Religious Council (MAIN). Now, the Halal Industry Development Corporation (HDC) has
been appointed by the government to serve as a one stop center to manage the issue of Halal certification for
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Malaysia. In this study, we focus on Halal certification for the hotel industry which is the food and beverages
produced by the hotels kitchen.
What is Halal? According to Halal Malaysia [14], the definition of Halal as stated in the Trade Description
Order (Usage of the Term Halal) 1975 is as follows:
When the term is used in relation to food in any form whatsoever, in the process of trade or commerce as an
aspect of trading or part of an aspect of trading for the referred to food, the terms Halal, Guaranteed Halal or
Muslim Food or any other terms that may be used to indicate or may be understood as meaning to indicate as
permissible to be consumed by Muslims and allowed in their religion for the referred to food to be consumed,
must therefore mean the following, that is, the food for which such terms are being used:
a) does not stem from or consists of any part of or item from animals that are forbidden to Muslims by
Islamic law, or animals that have not been slaughtered according to Islamic law;
b) does not contain any substance that is considered impure in Islamic law;
c) is not prepared, processed or manufactured using equipment or utensils that are not free from impurities
as defined by Islamic law ; and
d) that, in the preparation, processing or storage stage, does not come in contact with or is stored near any
kind of food that does not meet the requirements of para(s) (a), (b) or (c) or any substances that are
considered impure by Islamic law.
From the above definition, we can conclude that Halal certification would not just include the food itself but
also other areas as well. These three main areas are namely (1) the food and the source of the food, (2) the
process of preparation of the food, and (3) the process and handling the storage of the food. The halal
certification process also includes five processes namely the application/document approval, premise inspection,
panel committee/appeal committee, issuance of Halal certification, and monitoring and assessment [15].
The economic benefits of Halal certification are huge. The industry is estimated to worth around US 632
billion per year [16]. This is due to the increasing demand of Halal food around the globe [15].
2.3. Halal certification and green management: The similarities
Figure 1: Halal certification aspects
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The halal certification process would include auditing on various aspects such as items depicted in Figure 1,
while green practices would include aspects such as in Figure 2. From the two figures we can see there are some
aspects that would be related between Halal certification process and green management. Among similarities
identified are (1) waste management, (2) education, (3) water (water supply & drainage), and (4) energy (ceiling,
lighting, ventilation, & temperature).
Figure 2: Green management aspects
3. Methodology
This was a quantitative case study that analysed from the perspective of individual personnel of EDC-UUM.
Almost all staff of EDC-UUM answered our questionnaire related to green and halal certification process. Due to
the scarcity of research on the topic and probably this was the first attempt to relate halal certification and green,
the questionnaire was self-constructed based on the Halal certification audit criteria. The perceived effects of
green and halal certification to performance are measured using various sources particularly from the
Environmental Management System studies [17] [18]. The scale of 1-5 was used ranging from improved
significantly (5) to worse significantly (1). For the level of agreement questions, the scale was ranged from
strongly agree (5) to strongly disagree (1). The questionnaires were also self-distributed and self-collected from
the EDC staff. The quantitative findings would be discussed in relation to the literatures available in the field.
4. Result and Discussion
4.1. EDC-UUM
EDC-UUM is an 8-storey hotel, located near the main entrance of the Universiti Utara Malaysia (UUM)
campus in Sintok. With a capacity of 88 spacious and comfortable guess rooms, EDC-UUM emphasizes value
for money and comfort. It is an ideal venue for business and leisure travelers with modern accommodation and
traditionally warm hospitality. Guest can look forward to affordable accommodation highlights such as a prayer
room, a meeting room, a laundry service, a restaurant and a small convenience store. The EDC-UUM, was
established as a cost centre but later on operating as a strategic business unit (SBU). It commenced its operation
on September 2006. The concept of the hotel is to provide hotel standard products and services and move
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forward to fulfill its market needs. EDC-UUM is committed to providing the highest standards in hotel services
and facilities in keeping with its tagline: "Your Smile, Our Joy".
Since EDC-UUM is rather newly established and given as a strategic business unit (SBU) status, the
management decided to maintain its growth. In 2007 the total revenue was RM 1.8 million. The amount has
increased to RM 3.4 million and RM 3.5 million in 2008 and 2009 respectively. Apparently room and food and
beverage are the two major contributors to the EDC-UUM earnings. Hence, to stay competitive, EDC-UUM
should have the right business strategies in the years to come. One of the strategies is to obtain Halal certification
from JAKIM. Throughout the year of 2011 until the beginning of 2012, EDC-UUM has been aggressively
preparing the required documents for Halal certification for its kitchen. The standards of procedures for the hotel
have also been practiced to comply with the Halal certification.
4.2. Survey Results
Table 1 below shows the respondents background in terms of their role and tenure at EDC-UUM and total
years of experience in the hospitality industry. Most of the respondents of the study were not in the managerial
positions, had less than 1 year working experience at EDC-UUM but had 5-10 years working experience in the
hospitality industry. Note that the EDC-UUM has just been established for only 5 years during the time of the
study.
Table 1: Respondents Background
Respondents Background %
Role in the organization
Senior Management 10.9
Junior Management 7.3
Middle Line 27.3
Others 54.5
Total 100
Years of working in the organization
5 years 18.2
4 years 5.5
3 years 14.5
2 years 9.1
1 year or less 52.7
Total 100
Years of working experience
> than 20 years 1.8
15-20 years 1.8
10-15 years 5.5
5-10 years 16.4
< 5 years 74.5
Total 100
Next, we asked the respondents to indicate their agreement on the relationship between green and halal
certification. The result showed that 57.5% of the respondents agreed that Halal certification contributes towards
green. Another 27.3% even strongly agreed to the statement which made a total of 84.8% of the respondents to
perceive that Halal certification had a relationship with green. The specific result is shown in Figure 1.
Further, we investigated the perceived effect of Halal certification on the green performance. Figure 2 shows
the result. We found that majority (more than 50%) of the respondents indicated that Halal certification would
also be beneficial to EDC-UUM in terms of the following items:
Energy saving
Environmentally conscious
Environment accident
Society
Waste management
Coordination activities
Efficiency
Cost saving
Interaction buyers and customers
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Personnel qualification
Employee motivation
Multi-skillness of employees
Tenders
Note that some of the respondents also perceived that Halal certification would have negative effects on
green performance. However, this was a small group that represented only less than 10% of the respondents as
stated in Table 2.
Fig 1: Level of agreement on Halal and green
Fig 2: Perceived effect of Halal certification on green performance
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Table 2: Total Percentage of level of Halal certification effects on green performance
Green performance Worse (%) Improve (%)
Energy saving 9 62
Environmentally conscious 9 78
Environment accident 9 65
Society 7 76
Waste management 7 76
Coordination activities 7 73
Efficiency 9 80
Cost saving 9 78
Interaction buyer/customer 9 76
Complaint 7 69
Personnel qualification 9 82
Employee motivation 7 80
Multi-skillness of employees 7 80
Tenders 7 75
*moderate effect was uncounted
5. Discussion and Conclusion
Our findings provide evidence for future work in the area of Halal certification. Based on our initial attempt,
we have found that halal certification has somehow related to green. Most of the respondents have indicated their
agreement about the relationship. The top effects of Halal certification that they perceived related to green would
be namely (1) Personnel qualification, (2) employee motivation, (3) Multi-skillness of employees, (4) Efficiency,
(5) Environmentally conscious, and (6) cost saving. From this finding we can conclude that the Halal
certification is closely related to the human resource issue particularly on their training about the Halal
certification. It is interesting to note that halal certification is perceived to have effects on environmental aspect
as well.
As discussed earlier this findings could be associated with the existence of similarities between Halal
certification and green management. The Halal certification, in general, focuses more on the hygienic, quality,
and safety [15] aspects of the food and its preparation, while green management focuses on reducing the
negative impact of human activities towards the environment. Based on this small scale data, we can carefully
conclude that by being hygienic would also protect the environment. After all, Islam teaches us to protect the
environment. And it does not mean we can only do that by having ISO 14000 certification.
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Cite this paper
Razalli, M.R., Abdullah, S., and Yusoff, R.Z. (2012). Is Halal certification process green?, Proceedings of The 3
rd
International Conference on Technology and Operations Management: Sustaining Competitiveness through Green
Technology Management, BandungIndonesia (July 4-6), pp. 23-30. ISBN: 978-979-15458-4-6.