Content uploaded by Teresa Briz
Author content
All content in this area was uploaded by Teresa Briz on Apr 29, 2014
Content may be subject to copyright.
1
Quality management and improvement in the Spanish SME Food Industry:
The adoption of ISO 9000
Authors
Briz Julian *,Arribas Nuria***Garcia Marian **,Briz Teresa*, de Felipe Isabel*,
* Polytechnic University Madrid,**Imperial College London,***FIAB Madrid
Contact:julian.briz@upm.es
Paper prepared for presentation at the XI Congress of the EAAE
(European Association of Agricultural Economists),
Copenhagen, Denmark: August 24-27, 2005
Copyright 2005 by J.Briz et al. All rights reserved. Readers may make
verbatim copies of this document for non-commercial purposes by any means,
provided that this copyright notice appears on all such copies.
2
QUALITY MANAGEMENT AND IMPROVEMENT IN THE SPANISH
SME FOOD INDUSTRY: THE ADOPTION OF ISO 9000
Abstract
This paper presents the results of a large-scale study in the Spanish F&DI aimed to identify the
motivators, perceived costs, and benefits of implementing ISO 9000 standards. Results indicate the
increasing importance of ISO 9000 standards as a strategic tool in the Spanish F&DI with an
increasing number of F&D companies seeking ISO 9000 certification. Despite being a recent strategic
option among Spanish F&D companies latest figures show a total of 1,754 firms being ISO 9000
certified (a significant increased from a total of 4 firms in 1993)
Keywords: ISO 9000 certification, food industry, Spain, performance
1. Introduction
Small and medium enterprises (SMEs) dominate the Spanish food and drink industry and the
adoption of quality control system is one of the ways to increase efficiency.
On the other hand increasing competition and the need to adapt their performance to the food safety
regulation and traceability systems, are driving the entrepreneurs to incorporate quality control.
However action have some risk and they also face a high cost of adoption (Yiridoe 2004)
ISO 9000 is a series of standards and guidelines developed by the International Organisation for
Standardisation (ISO), which requires companies to document their quality assurance operations and
procedures. This family of standards were first published in 1987 and subsequently updated in 1994
and 2000. To date, 161 countries have adopted ISO 9000 series as their national quality standard, and
over 500, 000 certificates have been issued world-wide (ISO, 2002).
The ISO 9000 comprises a set of standards, which were simplified in December 2000 (Table 1).
Under the revised version, ISO 9000:2000 is the general standard that serves as an overall guide to the
other standards. Its purpose is to provide definitions of terms and a basic explanation of the ISO
9000:2000 standards. ISO 9001:2000 consolidates the former ISO 9000/9002/9003 standards into a
single document and is the only standard to which certification is currently assessed. ISO 9004:2000
provides further guidelines for continuous improvement of internal quality management systems.
Table 1. The ISO 9000 Series
Standard Focus
Original Standard (ISO 9000)
ISO 9000 Quality management and assurance standards for selection and use
ISO 9001 the most comprehensive, encompasses design, development, production,
installation and servicing
ISO 9002 guides the development of a quality management system when design
control is not a requirement
ISO 9003 the least comprehensive, addresses only final inspection and testing
Revised Standards (ISO 9000:2000)
3
ISO 9000:2000 Quality management systems fundamentals and vocabulary – defines
terminology and standard
ISO 9001:2000 Quality management systems requirements –used to assess compliance
with requirements (consolidates the former ISO 9001/9002/9003 into a
single document)
ISO 9004:2000 Quality management systems guidelines for performance improvement –
offers guidelines for continual management system improvements
When working procedures and practices reach required ISO standards, the company receives a
certificate (through an audit performed by an independent, third-party registrar). This involves the
development of three documents: (i) a quality handbook, which describes the company structures and
its quality policy; (ii) a procedure handbook, which describes procedures according to required
processes; and (iii) a written document containing work instructions for specific tasks.
Studies have pointed out improved operational efficiency as one of the main benefits of ISO 9000
certification (Seddon et al., 1993) as it would give the system structure and formality in place of
chaos, which currently represents the approach of most companies to quality management. However,
despite the increasing number of ISO 9000 certified companies world-wide and the availability of
numerous well developed materials to help companies through the certification process, achieving
certification is complex, and this complexity is costly both in term of financial and human resources.
Moreover, companies seem to be interested in obtaining the actual quality certificate than improving
quality (Stevenson and Barnes, 2002).
ISO 9000 standards started being a QMS in Europe and nowadays are an internationally recognised
quality assurance standard, and in some market an indispensable condition for contracting suppliers.
Over the last decade, ISO 9000 certifications have been growing world-wide, and according to the
latest statistics (ISO, 2002) up to the end of December 2001, at least 510, 616 ISO 9000 certificates
had been awarded in 161 countries which represents an increase of 24.96% over the end of December
2000. Of the ISO 9000 total, 44,388 were certificates of conformity to ISO 9000:2000 (8.7% of the
overall total).
Europe accounts for over half of total ISO 9000 certifications (53% in 2001); though significant
increases are seen in other geographical areas like the Far East with 126,779 certificates in 2001,
which represents an increase of 55% from the previous year, and Central and South America with a
33.5% increase from December 2000 to December 2001.
The aim of this paper is to explore the process of ISO 9000 implementation in the Spanish F&DI.
The paper presents the results of a large-scale questionnaire administrated in January 2002 aimed to
determine the major costs of implementing and operating ISO 9000 standards, the major problems
encountered by firms by implementing the system as well as the major perceived benefits.
The paper is structured in three parts. After this introduction, in section two, the paper examines
briefly the development of ISO 9000 in the Spanish F&DI. Then section three is an account of the
methodology used in this research followed by the results. Finally, in section four the paper provides
some conclusions and recommendations.
2. ISO 9000 In the Spanish Food and Drink Industry
According to the latest statistics published by the Spanish Ministry of Agriculture, Fisheries and
Food (MAPA), at December 2001 there were 1,754 Spanish F&D companies with ISO 9000, which
represents a significant increase from previous years where, for instance, in 1995 there were only 102
ISO certified F&D firms far from the initial 4 in 1993. Hence, ISO 9000 is a quite recent movement in
the Spanish F&DI with 74% of the firms being ISO certified between 1998 and 2000 (Figure 1). The
4
different programmes developed by the Spanish government to provide financial aid to implement
QMS in the Spanish industrial sector are likely to increase the number of ISO 9000 certified firms in
the near future.
Figure 1. Number of ISO 9000 certifications in the Spanish F&DI, 1993-2001
931
17 81
272
188
154
140
64
1754
920
648
460
306
166
102
21
4
0
200
400
600
800
1000
1200
1400
1600
1800
2000
1993 1994 1995 1996 1997 1998 1999 2000 2001
Number of Firms
ISO 9000 CERTIFIED ANNUAL GROWTH
Source: MAPA
The sectoral distribution of ISO 9000 certifications shows the processing and preserving of fruit
and vegetables as the leading sector in terms of the total number of certifications in the Spanish F&DI
(18%) (Table 2). The international orientation of this sector appears as the main driver behind the
management decision to seek certification. In second place, we find the meat sector with 136 ISO
certified firms (17%). This sector has always maintained a leading position regarding the number of
certifications given its economic relevance and position in the Spanish F&DI, and in response to
market demands (customer-driven). It is worth noting the high number of certified firms in the wine
sector (10%). These three sectors plus miscellaneous food products account for more than half of the
total number of ISO certifications in the Spanish F&DI.
The increasing importance of ISO 9000 as a strategic tool in the Spanish F&DI is reflected in the
decision of leading F&D firms in each sector to seek this certification, and in some sectors appears to
be a standard business practice (i.e., in the sugar and beer sector the entire production is ISO certified).
5
Table 2. Sectoral distribution of ISO 9000 certificates in the Spanish F&DI, 2000
SECTOR No of
Certified Firms
% total ISO
certificates
Meat products 136 16,7
Fish processing 44 5,4
Processing of fruits and vegetables 145 17,8
Organic oils and animal fats 45 5,5
Dairy products 44 5,4
Grain milling 30 3,7
Animal feeds stuffs 29 3,6
Miscellaneous food products 106 13,0
Industrial baking 44 5,4
Sugar processing 14 1,7
Cocoa, chocolate & sugar
confectionery
12 1,5
Coffee, Tea and Infusions 13 1,6
Species, souces and condiments 17 2,1
Baby food and diet products 6 0,7
Spirits distilling 15 1,8
Wine 78 9,6
Brewing and malting 12 1,5
Water and soft drinks 24 2,9
Total Spanish F&DI 814 100%
Source: MAPA
3. The Strategic Use of ISO 9000 in the Spanish F&D Industry
3.1. Sampling Frames and Data Collection
The target population for this study consisted of ISO 9000 certified F&D companies in Spain. The
database was obtained from MAPA and included all ISO 9000 certified F&D companies until 30
December 1999 (MAPA, 2000). The list included a total of 534 F&D firms. The database was
extended by including additional F&D companies certified by AENOR (the leading ISO 9000
registration company in Spain) during 2000. The final database contained 654 ISO 9000 certified F&D
firms. Contact details of the companies (i.e., address, phone number, fax, etc.) were obtained from the
annual business directory Alimarket 2001. The annual Food and Drink published by Alimarket
provides firm level data on sales volume by product type for a group of firms accounting for around
90% of total Spanish Food production.
Each firm was contacted by telephoned and the objectives of the research explained to the
responsible of the quality control department. If the firm was willing to participate, the questionnaire
6
was, depending on their preference, sent my mail, fax or email. A total of 557 food companies
received the questionnaire.
The questionnaire (a copy of which is available on request) was pre-tested among a sample of
senior quality control managers who completed the draft questionnaire and provided feedback on the
comprehensiveness and phrasing. The survey was administered in January 2002. A reminder letter or
phone call with an additional copy of the questionnaire was posted five weeks after the mail-out, and a
second remainder six weeks later, which noticeably improved response rates. Completed
questionnaires were received from 199 firms, giving a response rate of 36%, which is regarded as
significant considering the difficulties and problems involved in large-scale postal questionnaires
(Similar response rates have been achieved in recent ISO and HACCP studies in the food industry:
Henson et al., (1999); Turner et al., (2000)). Table 3 shows the responses by manufacturing sector.
56% of respondents were SMEs (fewer than 100 employees), which emphasises the importance that
these companies attribute to the certification; and 59% indicated that export activities accounted for
less than 15% of their sales.
3.2. Results
Certification Status
Most F&D firms were certified to ISO 9002 (89%) and 25 to ISO 9001. None had ISO 9003
certification (Table 4). Only 2 companies have been certified under the new version- ISO 9000:2000
(Companies already holding ISO 9000 certification will have 3 years to transition to the new version
ISO 9000:2000. As with ISO 9000, however, companies seeking initial ISO 9000:2000 certification
must be audited by an independent third party certified and the implementation process will be similar
to that of the previous standard). With regard to the newly developed environmental standards -ISO
14000- 14% of respondents have obtained this certification.
Most ISO 9001 and 9002 certifications were obtained in 1997 and 1999, respectively, which
support previous arguments on the relatively newness of these quality management systems (QMS) in
the Spanish F&DI. However, data shows a significant increase in the number of certifications since
1996 highlighting the increasing relevance of ISO 9000 as a strategic tool for the Spanish F&DI. The
first and most obvious benefit in today’s ever-increasingly competitive environment is marketing
advantage, and being ISO 9000 certified tends to indicate that a firm is more likely to meet the
demands of its customers than a rival without certification.
7
Table 3. Responses by manufacturing sector
Total
Sample
Response Rate
SIC
Code
Sector
No of
Firms
No of
Firms
%
15.11
Animal slaughtering, by-product
processing and fellmongery 12 6 1,08
15.12/13
Meat Processing and Preserving 60 24 4,31
15.20 Fish Processing and Preserving 28 6 1,08
15.32 Manufacture of fruit and vegetable
juice
34 17 3,05
15.33 Fruit and Vegetables Processing 42 10 1,79
15.42 Manufacture of Refined Oils and
Fats 36 12 2,15
15.51 Milk and Milk Products 22 14 2,51
15.61 Grain Milling and Manufacture of
Cereal products 18 12 2,15
15.71 Manufacture of Prepared Feeds for
Farm Animals 19 9 1,62
15.81 Manufacture of Bread, Fresh
Pastry Goods and Cakes 13 3 0,54
15.82 Manufacture of Rusks, Biscuits
and Preserved Pastry Goods 24 8 1,44
15.83 Manufacture of Sugar 9 1 0,18
15.84 Manufacture of Cocoa, Chocolate
or Sugar Confectionery 13 8 1,44
15.86 Tea or Coffee Production 15 6 1,08
15.87 Manufacture of Condiments and
Seasoning 12 4 0,72
15.88 Manufacture of Homogenised
Preparations and Dietetic Foods 5 1 0,18
15.89 Manufacture of Soups and Other
Food Products not elsewhere
classified
101 19 3,41
15.91 Manufacture of Distilled Potable
Alcoholic Beverages 5 3 0,54
15.93 Manufacture of Wine 23 14 2,51
15.94 Manufacture of Cider, Perry and
Other Fermented Fruit Beverage 18 8 1,44
15.96 Manufacture of Beer 8 4 0,72
15.98 Production of Mineral Water and
Soft Drinks 10 10 1,79
Total 557 199 35,73
The average time for certified firms to reach certification was slightly longer for ISO 9002 (16.6
months on average) than for ISO 9001 (15.5 months). This time, however, is reduced by half in the
case of the revised ISO 9000:2000 standards. The average implementation time, however, do not seem
to suggest significant differences across sectors (first vs. second transformation) or firm size (small vs.
large) as suggested by previous studies in the Spanish F&DI (MAPA, 1999). However, the time
required to achieve certification would depend on the firm’s in-house capabilities in quality
management (i.e., current level of work quality, extent of current documentation, etc.); and thereby
firms without prior knowledge in this area would have to rely more heavily on external consultants to
achieve certification. It is in this area where there seem to be firm size differences with small firm
8
hiring more often external consults (81% of small F&D firms) to achieve certification while large
firms tend to internalise the QMS. Hence, while differences in-house knowledge may not be reflected
on the time needed to achieve certifications, since deficiencies could be overcome by using external
aid, they result on higher certification cost for smaller firms as shown in Table 6.
Table 4. ISO 9000: Certification Status
Number of
Firms
Year in which
certification was achieved
(average)
Time needed to
achieve certification
(months)
ISO 9001 25 (12 %) 1997 (32%) 15.5
ISO 9002 178 (86.5%) 1999 (24%) 16.6
ISO 9003 0 - -
ISO
9000:2000
3 (1.5%) 2001 7.0
ISO 14000 20 (14.6%) 2000 12.9
Reasons for Seeking Certification
To determine the main reasons for seeking ISO certification, respondents were asked to indicate the
importance of a number of firm-driven factors (i.e., operational efficiency, reduction in error rates and
costs, etc.) and customer-driven variables (i.e., legal requirements, customer demands, gain market
share, etc.) using a five-point scale ranging from 1 (‘Not at all important’) to 5 (‘Extremely
important’). As Table 5 shows, internal factors like the reduction of error rates and improve
operational efficiency in order to obtain a competitive advantage were regarded by surveyed firms as
the key determinants for adopting ISO 9000 quality assurance standards. The importance of internal
(firm-driven) factors compared to external (customer-driven) motives have also been highlighted by
similar studies in the agrifood sector (Holleran and Bredahl, 1997; Turner et al., 2000; Lloyds, 1995);
however, the importance of ‘staying in business’ by responding to customer demands is and will be
increasingly important in a ever-increasing competitive environment (internal and external factors are
not mutually exclusive). It is worth noting, however, that the need to response to private demands (i.e.,
food retailers) appears to be significantly more important for F&D firms than meeting legal
requirements. The F&DI is an example where the private sector has been more proactive in developing
QMS given the failure of public controls. These private quality initiatives are supported by more
frequent and rigorous inspections than public enforcement bodies are able to attain (Northen, 2001).
Moreover, food retailers’ increasing bargaining power enables them to impose their product
specifications on the supply chain more effectively.
While adoption motivation has been found size dependant by previous studies (Seddon et al., 1993;
Holleran et al., 1999): internal reasons in the case of larger firms and external motives for small firms,
results from this study did not find statistically significant differences in the reasons for seeking ISO
9000 certification in terms of firm size (Firm size was defined in terms of the number of employees
and treated as a two-category variable, being firms regarded as ‘small’ if employing fewer than 100
employees or ‘large’ otherwise). However, some customer-driven variables like access to new markets
and meeting customer demands seems to be dependant on the export orientation of the firm.
Factor analysis was conducted to measure the underlying structure of the reasons for seeking
certification. A varimax rotation was conducted and the standard criterion of an eigenvalue >1 was
applied to determine the appropriate factor structure. Three factors were extracted and collectively
accounted for 66% of the total variance (Table 5). Previously, Cronbach’s Alphas were computed to
measure the reliability of the initial constructs.
9
The cut-off for interpretation purposes was factor loadings greater or equal to ± 0.5 on at least one
factor. These loadings may be considered to be a conservative criterion. Kim and Muller (1978)
suggest factor loadings of 0.30 as a cut-off for significance. Likewise, Nunnally (1978) indicates, “it is
doubtful that loadings of a smaller size be taken seriously, because they represent less than ten
percent of the variance of the factor” (p. 423).
As Table 5 shows, a highly interpretable simple structure factor solution was obtained (i.e., only
one loading on any factor for each variable). These factors are summarised below:
•
Factor 1 -‘Competitive advantage’: firms seek ISO 9000 certification to enhance their
competitive position in the market by meeting customer demands and/or as a means to enter
new markets.
•
Factor 2 – ‘Operational efficiency’: associated with internal motive (i.e., productivity, costs,
error rates).
•
Factor 3 – ‘Regulation driven’: associated with the need to meet legal requirements and reduce
business risks.
Table 5. Factor analysis of reasons for seeking ISO 9000 certification
F1 F2 F3
Reasons Mean* Competiti
ve
Advantag
e
Operation
al Efficiency
Legal
Requiremen
ts
Increase market share 3.34 0.862 0.091 0.167
Access to new markets 3.46 0.855 0.032 0.103
Obtain a competitive advantage 4.01 0.739 0.247 0.024
Meet customer requirements 3.78 0.700 0.023 0.279
Become the leading firm in the sector 3.57 0.540 0.297 0.058
Improve operational efficiency 4.08 0.057 0.842 0.086
Reduce error rates 4.24 0.067 0.818 0.120
Reduce costs 3.11 0.228 0.665 0.243
Improve the profitability of the firm 3.21 0.546 0.606 0.037
Meet legal requirements 2.56 0.106 0.074 0.903
Reduce business risks 2.82 0.224 0.412 0.714
% of total variance explained 29.3 22.9 13.9
1
1 = Not at all important; 5= Extremely important
ISO 9000 Costs and Benefits
The majority of Spanish F&D firms indicated to be satisfied with the implementation of ISO 9000
(91.4% of respondents were satisfied/highly satisfied with the QMS). Moreover, when ask to compare
the costs versus the benefits, over third quarters of the surveyed firms regarded the costs of becoming
certified as low or moderate. Only a small minority of F&D firms (11.6%) considered the cost of
certification high or excessive. Similar levels of satisfaction have been reported in other studies
(Capmany et al., 2000).
The average cost (per plant) of becoming certified was 23,368.86€ with the maintenance of the
certification status costing 6,037.06€ per year (Table 6). The analysis of the costs per employee,
10
however, clearly indicates the importance of economies of scale in the implementation and
maintenance of QMS. One-way ANOVA test indicated a statistically significant difference between
size clusters for certification and maintenance costs (p<0.01). While previous studies suggest that
certification costs should not represent a barrier towards achieving certification (Zaibet and Bredahl,
1997), evidence from this paper, however, contradicts this hypothesis showing how cost per employee
estimates may be prohibited for SMEs. Similar diseconomies for small firms were obtained by Turner
et al. (2000) study.
Table 6. Cost of ISO 9000 certification
Certification Cost
N.
Employees
Average
(Euros)
Cost per Employee*
(Euros)
1-49 15,108 703
50-499 24,286 214
>500 39,066 61
Total 23,404 342
Maintenance Cost
N.
Employees
Average
(Euros)
Cost per Employee*
(Euros)
1-49 4,542 206
50-499 7,104 61
>500 5,052 7
Total 6,053 95
* (p<0.01)
ISO 9000 implementation costs include items like staff training, record keeping, hiring of external
consultants, purchasing of new equipment and structural changes to infrastructure and buildings. To
measure of relative importance of these cost items in the overall certification cost, participants were
asked to rank them. If a cost had not been incurred, firms were asked to allocate a rank of zero.
Overall, record keeping ranked as the most important cost for ISO 9000 certified firms (only 0.7% of
respondents did not incurred this cost), followed by the cost of hiring external consultants (Table 7).
Most surveyed firms had to rely on external consultants from start to finish to ensure passage of the
ISO audit while only 14% of respondents used external expertise for specific parts of the procedure,
mainly at the beginning and with the elaboration and preparation of documentation. The main reasons
behind the use of external consultants to achieve ISO 9000 certification were consultants’ more
independence of judgement and the lack of knowledge of requirements by companies. Conversely,
costs related to the purchasing of new equipment or due to structural changes in infrastructure and
buildings ranked lower.
The burden of keeping records is equally high for larger and small firms; however, small firms
seem to rely more on external help throughout the implementation process. The larger firms seem to
internalise the QMS, and therefore devote more resources to staff training and changes in management
practices with highly in-house trained professionals being responsible for managing the ISO 9000
process.
11
Variations between individual respondents regarding the cost of hiring external consultants have
been also reported by Henson et al. (1999); however they related these differences to the starting
position of the firms, that is, whether firms previously operated to standards of good manufacturing
practices and/or had a highly trained work force. However, it could be argued that larger firms are
more likely to operate some kind of QMS and therefore have the required in-house expertise to
implement ISO 9000 while smaller firms would have to buy-in this expertise.
Table 7. Rank scores for costs of implementing ISO 9000
Costs % of respondents
giving 0 rank
(cost not incurred)
% of respondents
giving rank of 1
(most important cost)
Record keeping 0.7 43.8
Using external consultants 4.4 33.6
Staff training 1.5 7.3
Managerial changes 13.3 5.2
Structural changes to
infrastructure/buildings
19.0 4.4
Purchasing of new equipment 10.4 3.7
In addition, respondents were presented with a list of issues, which previous studies have suggested
can be problems in the implementation of QMS. They were asked to indicate how much of a problem
each of these issues had been when implementing and maintaining ISO 9000 in their firms using a
five-point scale ranging from 1 (‘Not a problem at all’) to 5 (‘Major problem’). As Table 8 shows,
mean scores were relatively low for all the issues presented to surveyed firms, suggesting that no
major difficulties were encountered by ISO certified firms when implementing ISO 9000 standards.
Only two issues were above the 3 point on the scale and both related to the motivation of staff, both
production and supervisory level; these results suggest again the difficulties to implement a culture of
quality in the firms. Similar results were reported by Henson et al. (1999).
Factor analysis was conducted to measure the underlying structure of the problem variables. A
varimax rotation was conducted and the standard criterion of an eigenvalue >1 was applied to
determine the appropriate factor structure. Two factors were extracted and collectively accounted for
59% of the total variance (Table 8). Previously, Cronbach’s Alphas were computed to measure the
reliability of the initial constructs.
As Table 8 shows, a highly interpretable simple structure factor solution was obtained (i.e. only
one loading on any factor for each variable). These factors are summarised below:
•
Factor 1 – ‘Operational flexibility’: related with the flexibility of internal operational
processes.
•
Factor 2 – ‘Business culture’: associated with the attitude/motivation and need to retrain
staff.
12
Table 8. Factor analysis of the difficulties to implement ISO 9000
Mean* F1 F2
Operatio
nal
Flexibility
Business
Culture
Reduced flexibility of production staff 2.29 0.891 0.115
Reduced flexibility of the production
process
2.34 0.874 0.035
Reduced flexibility of the NPD process 2.18 0.866 0.051
Recouping costs of implementing ISO 9000
2.67 0.477 0.159
Reduced time available for other tasks 2.96 0.458 0.313
Need to retrain production staff 2.89 0.045 0.795
Attitude/motivation of production staff 3.26 0.227 0.767
Need to retrain supervisory/managerial staff
2.61 0.090 0.760
Attitude/motivation of
supervisory/managerial staff
3.06 0.134 0.743
% of total variance explained 31.4 27.7
1
1 = Not at all important; 5= Extremely important
As pointed out Spanish F&D ISO 9000 certified firms consider that the benefits of ISO 9000
certification outweigh the cost incurred. A number of studies have looked at the benefits obtained with
the ISO 9000 certifications and highlighted factors like: increase in company quality awareness,
increase in product quality awareness, improvement in company management, increase in customer
relations, improvement of the products and services offered, improvement of the relationship within
the organisation, and increase in customer satisfaction (Brown and Van der Wiele, 1995; Henson et
al., 1999; Augustyn and Pheby, 2000).
In order to determine the type of benefits derived from ISO 9000 certification, respondents were
presented with a list of 16 factors and asked to indicate the importance of each benefit using a five-
point scale ranging from 1 (‘Not at all important’) to 5 (‘Extremely important’). The possibility of
obtaining a competitive advantage over their competitors appears as the main benefit for the Spanish
F&D firms from ISO 9000 certification. This advantage is derived from the possibility of improving
product traceability, which is considered a key requirement in the current supplier-buyer relationships.
Evidence suggest that the implementation of private QMS helps to improve suppliers’ relationships
with their customers, particularly if the customer has significant market power, and therefore it
improves the image of the firm in an ever-increasingly competitive environment. As Holleran et al.
(1999) point out the single fact of satisfying customer demands may be of such importance that the
certification costs and other benefits of the QMS are irrelevant.
Additional benefits related to the internal functioning of food companies as the ‘improved
management and control of the firm’, ‘improved definition of responsibilities and duties of production
staff’, and ‘improved quality of products and services’. It is worth noting the positive impact of QMS
on the business culture of surveyed firms where the quality concept appears to play a key role in the
business strategy of the firms as in the productive process.
Previous studies have fund that large companies derived more benefits from ISO 9000 certification,
especially in terms of positive cultural change, corporate image, quality awareness, better
13
documentation procedures, better working environment and continual improvement (Seddon et al.,
1993; Holleran and Bredahl, 1997). However, as for the motives behind seeking ISO 9000
certifications, evidence from this study did not support the hypothesis that benefits from the ISO 9000
adoption are firm size dependant nor related to export propensity.
Factor analysis was conducted to measure the underlying structure of the benefit variables. A
varimax rotation was conducted and the standard criterion of an eigenvalue >1 was applied to
determine the appropriate factor structure. Four factors were extracted and collectively accounted for
67% of the total variance Previously, Cronbach’s Alphas were computed to measure the reliability of
the initial constructs.
4. Conclusions and Recommendations
This paper has reported the results of one of the first comprehensive study on the implementation
of ISO 9000 in the Spanish F&DI, in particular its use as a marketing tool and impact on business
performance.
Evidence from this study suggest that the majority of ISO 9000 F&D firms consider that the net
benefits of ISO 9000 certified quality systems outweigh the cost incurred. However, cost estimates for
the sector clearly indicate economies of scale in the implementation and maintenance of QMS.
Strategies, therefore, need to be formulated to address those issues commonly identified as a negative
outcome such as record keeping, but more critically those barriers particularly faced by SMEs. Results
indicate that policy-makers should consider the important reliance of SMEs on external support
throughout the implementation process when formulating advice and/or support mechanisms.
14
REFERENCES
Henson, S., Holt, G. and Northen, J. (1999), ‘Costs and benefits of implementing HACCP
in the UK dairy processing sector’, Food Control, Vol. 10, pp. 99-106.
Holleran, E., Bredahl, M.E. and Zaibet, L. (1999), ‘Private incentives for adopting food
safety and quality assurance’, Food Policy, Vol. 24. Pp. 669-683.
Holleran, E. and Bredahl, M. (1997), Food safety, transaction costs and institutional
innovation in the British food sector, in Schiefer, G. and Hilbig, R. (eds.), Quality
Management and Process Improvement for Competitive Advantage in Agriculture and Food,
University of Bonn, Bonn.
International Organisation for Standarisation (ISO). (2002) The ISO Survey of ISO 9000
and ISO 14000 certificates: eleventh cycle 2002: up to and including 31 December 2001.
http://www.iso.ch/iso/en/prods-services/otherpubs/pdf/survey11thcycle.pdf (October 2002)
Lloyds Register Quality Assurance. (1995), ISO 9000: Setting Standards for Better
Business, Hoboken, NJ.
Ministerio de Agricultura, Pesca y Alimentacion (MAPA). (2000), La Industria
Alimentaria: Empresas Certificadas ISO 9000, Subdireccion General de Industrias
Agroalimentarias, MAPA, Madrid.
Stevenson, T.H. and Barnes, F.C. (2002), ‘What industrial marketers need to know now
about ISO 9000 certification. A review, update, and integration with marketing’, Industrial
Marketing Management, Vol. 31, pp. 695-703.
Turner, C.R., Ortmann, G.F. and Lyne, M.C. (2000), ‘Adoption of ISO 9000 quality
assurance standards by South African agribusiness firms’, Agribusiness, Vol. 16, No. 3, pp.
295-307.
Yiridoe EK, Marett G.E. (2004). Mitigating the high cost of ISO 14001 EMS Standard
certification: Lesson from agribusiness case research. IAMA. Volume 7. Issue 2. pp 37-62
Zaibet, L. and Bredahl, M. (1997), ‘Gains from ISO certification in the UK meat sector’,
Agribusiness, Vol. 13, No. 4, pp. 375-384.
