Supply Chain Management: An International Journal, Volume 22, Issue 2, Page 186-199, March 2017.
Purpose Much has been written about the importance of external integration for the integrity of food products. To achieve food integrity, all actors along the supply chain have to be fully integrated and comply with an assurance system or process. The more complex the supply chain operations are, the greater will be the need for integration. This research paper investigates the impact of external integration on compliance with halal standards, as an example of product integrity within the food industry. Design/methodology/approach A survey of 1,000 food manufacturers was conducted. Partial least squares structural equation modelling was used to test the effect of external integration on compliance with halal standards. Findings The results showed that there were links between halal assurance system and external integration. Nevertheless, it was discovered that only customer integration mediated the relationship between the halal assurance system and product quality and production cost. Practical implications The practical implications of the findings extend to managers in the food industry who might pursue supply chain integration as a structure to achieve excellence. The findings suggested that the deployment of a halal assurance system has a positive effect on operational performance. Furthermore, the results show that managers who wish to implement the halal assurance system should carefully invest in an external integration strategy, depending upon the operational performance improvement intended. Originality/value This research is one of the first studies to investigate the effects of external integration on halal food in general and is the first empirical investigation of the effect of safeguarding halal integrity on operational performance.