Supply chain challenges in kelulut honey small medium enterprises

Abstract

Kelulut honey, a highly valued product in Malaysia’s agricultural sector, is prized for its unique nutritional properties and increasing consumer demand. However, its high moisture content makes it susceptible to fermentation and microbial growth if not stored and processed correctly. Local Small and Medium Enterprises (SMEs) face challenges in managing these risks, particularly often lack of the dehumidifier equipment needed to meet the Malaysian Standard MS2683:2017. This gap impacts the quality, taste, texture, and shelf life of kelulut honey. The financial constraints faced by many SMEs, particularly in procuring proper dehumidification and storage equipment, further exacerbate these challenges, especially since kelulut honey production tends to be lower during the final quarter of the year due to seasonal weather patterns, such as frequent rain. As a result, the long-term sustainability of Malaysia’s kelulut honey industry is at risk. This study addresses a critical gap in research related to the challenges SMEs faced in terms of the supply chain constraints, which impact production efficiency, product quality, and market competitiveness. Through a mixed-method approach, including in-depth interviews, physical site observations, focus group discussions (FGDs), and literature analysis, this research aims to provide a comprehensive understanding of the issues faced by local SMEs and compare these challenges with those encountered by their counterparts in other countries. Three primary challenges were identified: inadequate storage conditions, processing limitations, and inefficient inventory management. Many SMEs are unable to maintain proper storage conditions, which leads to premature spoilage and fermentation,reducing honey’s commercial viability. The inventory management system is largely manual, with no effective tracking mechanisms, leading to difficulties in maintaining stock and product movement. To mitigate these issues, this study proposes a cost-effective, easy to-implement strategy by adopting the First-In, First-Out (FIFO) inventory management approach. FIFO ensures older stock is used or sold first, minimizing spoilage and preserving product freshness. The FIFO method not only improves storage layout and addresses processing limitations but also enhances inventory management, reducing spoilage and ensuring consistent product quality. Importantly, the solution does not require monetary investment, making it accessible for SMEs operating under financial constraints. Rather than costly equipment or infrastructure, FIFO leverages existing resources and operational adjustments that can be implemented without additional financial burden. Furthermore, this research highlights the importance of aligning FIFO practices with Sustainable Development Goals (SDG) and Environmental, Social, and Governance (ESG) principles. By doing so, SMEs can improve operational efficiency, enhance product quality, and increase market competitiveness while promoting responsible business practices. Incorporating SDG and ESG frameworks also contributes to the long-term resilience of the kelulut honey industry, ensuring that it remains sustainable in the face of both local and global challenges. In conclusion, the study provides practical recommendations for SMEs to overcome their supply chain challenges. By adopting cost-effective strategies like FIFO, which require no monetary investment, and aligning with SDG and ESG principles, SMEs can improve their operational efficiency, reduce waste, enhance product quality, and contribute to the sustainable growth of Malaysia’s kelulut honey industry.