Quality Assurance System in the Fish Supply Chain: The Case of Pangasius Industry in the Mekong River Delta, Vietnam45240

Quality Assurance System in the Fish Supply Chain: The Case of Pangasius Industry in the Mekong River Delta, Vietnam Khoi Le Nguyen Doan 1 * 1 Can Tho University, Can Tho, Vietnam *Corr

Quality Assurance System in the Fish Supply Chain: The Case of Pangasius Industry in the Mekong River Delta, Vietnam

Khoi Le Nguyen Doan (1) (*)

(1) Can Tho University, Can Tho, Vietnam

*Correspondence: lndkhoi@ctu.edu.vn

Abstract: Quality assurance systems have become of increasing concern for suppliers in both developed and developing countries Pangasius produced in Vietnam often do not fulfil the expectations of Western consumers with respect to the desired quality Small-holders are not acquainted with the wishes and demands of the foreign consumers of the products, and therefore cannot gear their production methods towards the desired product quality Moreover, fish production chains do not always operate efficiently and effectively, adding an additional hurdle to successful market penetration The scientific challenge with respect to the improvement of the quality performance of Pangasius supply chains implies the structural incorporation of the important elements in the process of food production, which are based on current scientific research for quality-orientated product development In this paper, a novel tool called QACCP (Quality Assurance Critical Control Points) is introduced to support supply chain management in taking appropriate technological actions in a food chain to realize a desired consumer-orientated quality performance QACCP is an extended concept of HACCP focusing on the management of quality assurance QACCP is of another dimension than HACCP because HACCP is limited to the prevention of

‘negative’ quality aspects (physical, chemical and microbial hazards) whereas QACCP also encompasses ‘positive’ quality aspects

Keywords: quality assurance; fish supply chain; Pangasius, Mekong River Delta, Vietnam

1 Introduction

During the last half of the 20th century the complexity of agro-food supply chains has increased considerably Raw materials are obtained from sources worldwide, an ever-increasing number of processing technologies are used, and a broad range of products is produced In addition, consumer expectations are continuously changing, demanding more convenience, less processing, and fresher foods with more natural ingredients Hence, food quality management has become increasingly important in the agro-food sector (Spiegel et al., 2003), due to changing consumer requirements, increasing competition, environmental concern, and governmental interests Higher consumer demands which regarding the quality, traceability and environmental friendliness pose the challenges for primary producers, especially smallholders in the developing countries (Henson et al 2000; Humphrey and Oetero, 2000)

Consumers realize how many steps and procedures are required to put food on the supermarket shelf, nor do they know how it is produced, or from which towns and villages

it originates Although this is changing for some consumers who are becoming more aware

of the type of food they eat, most other actors in the supply chain must meet global standards and monitor activities to be able to satisfy consumers’ demands Supply chains for agricultural products such as fish have changed from supply-driven to demand-driven

That means consumers are the key agent in the chain Hence, coordination, trust and governance of the chain are of vital important to satisfy consumer preferences This research focus on fish quality management supply chain in Vietnam

Since the beginning of the 20th century, several quality scholars advocated that appropriate quality could be obtained by reduction of uncertainty and variability in the design and manufacturing process To achieve this, many useful techniques have been

developed for the control and improvement of quality problems Quality control involves

determining what to control, establishing units of measurement for gathering data, establishing standards of performance, measuring actual performance, interpreting the difference between actual performance and the standard, and taking action on the difference

in order to prevent quality problems in the next batch/production Improvement is a form

of control in the control process, where attention is paid to structural causes and solutions (Luning et al., 2006)

Luning et al 2006 defined quality control as technological and managerial quality functions In an established food supply chain the quality control should be implemented

in the process and product of each member To guarantee quality, these activities can be controlled at critical control points (CCPs) According to Reilly and Kaferstein (1997), the following CCPs which are in quality control at aquaculture farm level must be monitored: site selection, water supply, production and input supply The way quality is controlled will have consequences for the performance of the chain

The functions quality control needs to be assured by the quality assurance Quality assurance (QA) encompasses all planned and systematic actions required to ensure that a product complies with the expected quality requirements It also provides customers and consumers with the assurance that quality requirements will be met Quality assurance focuses on system quality instead of product quality The system must be audited to ensure that it is adequate both in the design and use Hence, the focus has changed from how to inspect to how to produce Food products are not only tested on their product characteristics, but also on production, packaging, handling and distribution Control activities form the basis of several QA systems, such as HACCP (safety guarantee by using critical control points) The implementation of quality assurance systems, especially in the agricultural-food business, is an issue of the greatest importance There are several characteristics of food chains posing challenges to QA system: agricultural products are often perishable and subject to rapid decay due to physiological processes and/or microbiological contamination; most agricultural products are harvested seasonally; products are often heterogeneous with respect to desired quality parameters, such as the content of important components (e.g antibiotics), size, and color These issues depend on cultivation differences and seasonal variables, which are hard to control Moreover, primary production of agricultural products is undertaken largely by farms operating on a small scale, e.g fish culture (Khoi, 2007)

It is against background that the total food supply chain has to assure and demonstrate that the highest standards of quality and safety are maintained (Hoogland et al., 1998)

2 Quality performance of export fish chains

Van der Spiegel el al (2004) summarized the possible reasons for increased food safety problems in agri-business and the food industry including: increased complexity of supply chains and networks; increased consumption of manufactured food (such as convenience food); changes in the way of shopping and consumption (such as more outdoor consumption); increased vulnerability of consumers to infectious diseases (such as an increase in the elderly population); changes in food production methods and techniques (such as mild processing); intensification of agriculture (such as intensive culture) and increased international trade and travel (such as the import of more new (exotic) products) Hence, there are many reasons for the rise in food safety problems especially in the fish sector Moreover, consumer perceptions towards food safety and quality have increased, which is reflected in the media attention given to a variety of food safety and quality issues (Luning and Marcelis, 2007) To meet these trends, quality assurance systems are being developed, implemented, improved, and combined in order to guarantee food quality and safety to consumers, purchasers, retailers, government, and other stakeholders Currently, consumers are becoming increasingly concerned about the food production methods and the effects this could have on their own health Hence, quality assurance has focused on the fulfillment of quality requirements and proving confidence in meeting customer requirements In essence, all parties involved must apply quality assurance measures in order to control all aspects through the chain that may influence product quality Table 1 describes terms used in the quality assurance system

Table 1 Description of terms used

Food safety Refers to the requirement that products must be “free” of hazard with an

acceptable risk

Quality control Quality control is the ongoing process of evaluating performance of both

technological and human process and taking corrective actions when necessary (Evans and Lindsay, 2005; Luning et al 2006) Quality

assurance

Part of a quality management system focused on fulfillment of quality requirements and providing assurance in meeting customer requirements

(ISO, 1998) Quality

management

Is a part of the overall management activities that focuses on quality

Total quality

management

Involves the application of quality management principles to all aspects of the organization, including customers and suppliers, and their integration with

the key business processes (ISO, 1998) Quality

performance

Quality performance considered from a broader perspective includes quality dimensions of the product (product quality, availability, costs) and those of the organization (flexibility, reliability and service), and also includes the extended quality triangle (Luning et al., 2002, Spiegel et al., 2003)

Quality system Is defined as the organizational structure, responsibilities, processes,

procedures and resources that facilitate the achievement of quality

management Quality

assurance

system

This term is used for the specified systems such as HACCP, BRC, ISO that

cover part of a quality system

Risk A measure of the probability and severity of harm to human health System Interrelated and interacting processes working in harmony (ISO, 1998)

(Source: Luning et al., 2006)

For example, a Pangasius quality assessed early in the chain must be white colour and appropriate size and weight, free from antibiotic residues, suitable for handling and transportation, whereas fish purchased in the supermarket should be ready for consumption The quality definitions differ, though the underlying physiological mechanisms causing the quality changes are the same Moreover, technology plays an important role in managing these quality changes in the food supply chain

3 Food quality assurance

In the agro-food industry, QA systems like GMP, HACCP and ISO are widely applied GMP aims to combine procedures for manufacturing and quality control in such a way that products are manufactured consistently to a quality appropriate to their intended use (IFTS, 1991) HACCP aims to assure the production of safe food products by identifying and controlling the critical production steps (Leaper, 1997; NACMCF, 1998) ISO aims to achieve uniformity in products and/or services, and to prevent technical barriers to trade through the world

At the moment, the basic QA systems are often combined to assure several quality aspects, e.g the combination of HACCP and ISO 9000 (Barendsz, 1998, Robert, 1999) Moreover, QA systems are often developed specifically for an industry like e.g EUREP-GAP (Euro Retailer produce- Good Agricultural Practice), which is integrated into new systems such as BRC (British Retail Consortium) and SQF (Safe Quality Food) (EUREP-GAP, 2001) However, total quality cannot be realized by using these specific quality systems, because they each cover only a part of a quality system A quality system is defined here as the organizational structure, responsibilities, processes, procedures, and resources that facilitate quality management Quality management includes the total activities and decisions performed in an organization, to produce and maintain a product with a desired quality level at minimal cost

Table 2 Basic and derived quality assurance systems for food safety

9001:2000

EUREP

- GAP

Organization quality

Environment, and health and safety

at work

X

Total quality

Awards/Self-assessment

Quality

management

Location in

supply chain

Manufacture sector

Organization quality

Total quality Composition Combination of

QA systems

HACCP ISO

HACCP ISO

(Source: adapted from Spiegel et al., 2004; Khoi, 2010)

Technological and Managerial approach in food quality management

Food quality management is a rather complicated procedure It involves the complex characteristics of food and their raw materials, such as variability, restricted shelf life, potential safety hazards, and the large range of chemical, physical and microbial processes According to Luning et al (2006), food quality management is much more complicated due

to the dynamic and complex character of perishable food products in combination with the dynamic behavior of people involved in food production Producing high quality food products requires a special approach due to the wide range of factors in the food supply chain that can affect quality Poon et al (2003) also mentioned food quality management embraces the integrated use of technological disciplines as well as the integrated use of managerial sciences Both the use of technology to understand behavior of living fish materials and the use of managerial sciences to understand human behavior is needed Hence, both technological aspects (i.e fish characteristics and technological conditions) and managerial aspects (i.e human behavior and administrative conditions) should be managed

in order to improve food quality products

Luning et al (2002) proposed a techno-managerial approach for food quality management as a way to analyze and solve the complex quality issues They distinguished

Technological

facts

Management

approach

Managerial approach

Management aspects

Technological aspects

Technological approach

Management facts

between three different approaches, i.e the managerial, the technological and the techno-managerial approach as illustrated in figure 3.1 The approaches differ in the extent to which they integrate managerial and technological sciences Technological measures for solving quality issues are, for example, obtaining a better understanding of the chemical mechanisms, the development of more sensitive (e.g microbial) analyses, or reducing defects by genetic modifications Managerial measures concern human behavior and its working environment that can affect food safety In contrast, the techno-managerial approach encompasses both technological and managerial aspects in order to predict food systems behavior, and to generate improvements of the system The following paragraphs address technological and managerial aspects that play a role in the performance of QA systems

Figure 1 Techno-managerial approach (adapted from Luning et al, 2002)

* Technological functions

The quality of food products and raw materials change continuously and can decrease rapidly due to their perishability Food characteristics and process conditions have

to be analyzed, to know how these affect physical product properties Typical measures to reduce effects of variation and perishability on food quality are selection of raw materials, processing and preservation techniques, packaging, storage, and distribution Technological functions are activities, tools, equipment or methods that are necessary to produce goods with certain physical properties Lunning et al (2007) argue that these technological functions are strongly related to the first three primary activities distinguished by Porter (1995), namely:

Physical supply and storage of incoming food materials (inbound activities) Transformation of food materials into processed food products (transformation)

Technological approach Techno-managerial approach

Managerial approach

Physical storage and distribution of processed food products (outbound activities)

* Managerial functions

From a managerial point of view, quality behavior is dependent on the disposition and ability of employees (Gerats, 1990) According to Gerats, disposition is the employee’s own disposition to behave in a certain direction Factors that influence the disposition are knowledge, standards and information about the results In addition, ability is the objective opportunity to behave in a certain direction Factors that influence ability are skills, competence, facilities, and availability of time Typical measures to manage human aspects

of food production quality are providing suitable facilities, training employees, communication, motivational programs and empowerment, and creating commitment Managerial functions are defined as the necessary decision-making activities to activate the food production system, as well as the management system

Quality, as seen from the consumers’ perspectives, is a multifaceted concept, based

on quality expectations as perceived prior to consumption and quality experiences as perceived during and after consumption (Grunert, 2002) While quality experience is very much related to physical product properties, quality expectation is related to previous quality experience as well as information about the production methods, packaging and the appearance

Since these characteristics are specific for the agri-food chain, an integrated approach

of management and technology is required for the measurement of food quality systems

In conclusion, quality is considered from a broad perspective by selecting a management and a production based description However, these descriptions have to be made quantifiable in order to measure the effectiveness of food quality systems

Quantification

Quality performance of the end product is determined throughout the total value chain quality management, and starts at the beginning of the chain If the farmer starts with weak fingerlings that are receptive to disease and treats them with forbidden antibiotics, this can have consequences for the whole supply chain The same applies for process temperature; if this is too high, the amount of bacteria can multiply too fast Thus, quality needs to be managed and must be quantifiable in order to measure the effectiveness of the production system In order to quantify the production quality, several concepts are available in literature These concepts are based on the measurement of several quality aspects It is very likely that performance objectives will influence each other In the fish industry, consumers not only have concerns about physical product features, but also on quality aspects that are related to primary activities such as aquaculture farming practices Therefore, all these aspects should be incorporated into one concept that integrates management and product based aspects

Based on these concepts, the following performance objectives have been selected in order to evaluate quality management for every stage of the supply chain Khoi (2008) stated that product quality, costs, and reliability are the main performance drivers in the Pangasius industry If the quality of the Pangasius products is good and consistent, it can lead to a

reliable supply chain The quality rejection of the batches of fish products has major impacts

on the reliability and costs and thus the performance of the chain These dimensions will be discussed in general with the Pangasius supply chain in mind

- Product quality

Product quality refers to intrinsic and extrinsic quality attributes of the food product Intrinsic attributes are directly related to the physical product characteristics (e.g safety, health, sensory value, convenience), while extrinsic ones refer to the way in which the product is produced (e.g animal friendly) (Luning et al., 2002) Quality attributes are the result of (various) product properties, which are noticeable by sensory observation or communication, and contribute to quality perception and experience of consumers (Van Trijp and Steenkamp, 1998)

- Cost

The cost of the product is cumulative throughout the chain The chain can only be sustainable when the cumulative costs of the members are lower than the price paid by the customer This also has to be the case between every connection within the chain The customer value is the basis for the quality/price perception To make the supply chain more profitable, one can produce a premium quality and get a premium price or reduce costs through omitting non value adding activities (unnecessary transportation) Often the costs are related to the other performance dimensions as well Cutting costs will often mean that one of the performance dimensions will be affected

- Reliability

Reliability or dependability is the ability of an organization to fulfill its commitments (e.g contract with suppliers and customers) A high reliability implies that the dates of delivery are met Reliability also implies that quality demands are met

Reliability in the long term refers to the sustainability of the chain At the moment the density of Pangasius aquaculture is intensifying enormously This could pose a threat to the sustainability of the industry, due to the effect on the environment and the effects on water pollution However, there has been no study that confirms that the water pollution in the MRD is decreasing, or what causes the outbreak of diseases

In our research, quality control concept will be applied at farm level in order to

analyze how smallholder farmers implement critical control points to fulfill quality requirements of primary activities In addition, quality assurance will be considered to recognize the procedures and the distribution of responsibilities at the chain level to ensure

the fulfillment of customer expectations

Global value chain

The global fish business is increasingly dominated by value chain relationships in which lead firms exercise vertical coordination Vertical coordination describes the business relationships between producers and processors are organized in food supply chains which

is not a yes or no decision (Schulze et al 2006) With increasing globalization, the physical distance between producers and consumers of food products tends to increase, which

implies that actors at both ends of the chain are not aware of each others needs, opportunities and constraints Consumers may or may not be aware of the conditions under which producers (have to) work, and producers may not understand the legitimate concerns

of consumers with respect to food safety and food quality Food safety and quality concerns may bother various classes of stakeholders, e.g suppliers, buyers, and both internal and external institutions (Ruben et al., 2007)

In our case, the global value chain concept will be used to study coordination problems, taking consumer preferences as a starting point for most fish (consumer-driven) chains This approach will reveal the structure of business relations (including transactions and human behavior) related to information, product, and financial flows through the chains Hence, value chain management offers an opportunity to capture the synergy of intra- and inter-company integration and management (Porter, 1985; Lambert and Cooper, 2000; Luning et al., 2006)

4 Quality Assurance Critical Control Points (QACCP)

The nature of QACCP is the identification of critical points that affect quality and the translation of quality into specific quality attributes Thereby providing chain actors with information on steps in the production system that has to be monitored and handled with extra care This covers the main features of a study and their presumed relations, thus helping to decide which relationships are to be of importance and which data are going to

be collected and analyzed (Robson, 1993)

The application of QACCP represents an integrative approach This is a challenging perspective In contrast to most studies quality management is not studied from a firm perspective but from a chain perspective Several studies that address quality management

at chain level focus on governance structures and business relationships (Lazzarini, 2001; Hobbs, 2001; Han el al., 2006), while others focus on the use of proper technologies in primary processes and quality assurance (Henson and Loader 2001; Unnevehr, 2000; Dolan and Humphrey, 2000) Both approaches address relevant queries but may fail to address crucial aspects of channel design if these are beyond the scope of the chosen partial approach For example, the quality standards in the export markets will require the introduction of new technologies However, in order to make these changes successful, the quality management system and the prevailing governance structures coordinating business relationships, have to be fine-tuned simultaneously The integrated conceptual framework consists of three key dimensions namely quality control, quality assurance, and business relationships between the chain actors The arrows reflect the relationship between these dimensions

The first dimension focuses on technological functions This analyzes quality control

at farm level aims to fulfill quality requirements of primary activities In this part, we will study how the small farmers access and apply the required technologies for Pangasius quality control The main primary activities need to be controlled in each Pangasius production cycle These include site selection, design and construction, preparation and cleaning, fingerlings and fingerling stocking, feeds and feeding, water supply management,

fish health management, and harvesting The discussion will be based on these elements of the Pangasius culture cycle Moreover, this study will address financial requirements, as financial constraints are expected to restrict access to proper technologies and the role of the public and the private sector in disseminating proper technologies

The second dimension focuses on managerial functions This analyzes quality assurance at the chain level that refers to the procedures and responsibility, respecting to ensure that the product fulfills or exceeds customer expectations To make the right selection

of appropriate quality assurance systems, their effectiveness have to be investigated This part of the study designs the quality management system within the fish supply chain The applicability of different quality assurance tools is examined: Safety Quality Food (SQF), Hazard Assurance Critical Control Points (HACCP), Better Management Practices (BMPs) Moreover, the role of the processing firm in the quality management system is crucial - not only in ensuring the quality of the final product, but also in determining the requirements for fish suppliers The small farmers and other actors in the chain have to fulfill the quality requirements in order to make the chain operational

In order to implement a good quality assurance system, it is crucial to understand the motives for vertical co-ordination between chain actors (Ziggers and Trienekens, 1999; Hobbs., 2000; Boger., 2001; Schulze et al., 2006) The chain actors are input suppliers such as hatcheries, feed wholesalers, veterinary drugs services; small farmers, traders, processing/export firms Their activities will be studied with regard to elements of quality management such as quality control, and quality assurance In the third dimension, we want

to analyze the incentive structure of some key relationships at smallholder level that affect quality performance It analyzes the business relationships between small fish farmers and their partners in the chain This will help us to understand the role of collective action, trust, opportunistic behavior in the relationship between small scale farmers and chain actors in the current supply chains It will also help to identify possible solutions through co-operation or flexible supply contracts

The chain organization is an open system that interacts with its environment, in particular the institutional environment For example, the role of (local) authorities in developing and disseminating proper production technologies is important for the performance of smallholder production systems The same institutional environment determines access to financial markets for smallholders, a prerequisite for the successful introduction of innovative technologies production systems Therefore, it needs the role of the institutional environment in order to establish regulatory control programs for ensuring food quality at the primary production level To do this effectively, provincial extension centers and the departments of agriculture and aquaculture are important support channels for training, implementation of instructions, and inspection Luning et al (2002) stress that

- in relation to business performance - the quality cannot merely be considered as physical quality (intrinsic and extrinsic attributes), but must also include other dimensions of competition (e.g quality, cost, reliability) Imposed by importers, three criteria concerning quality control and quality assurance, apply: product quality, costs and reliability (Noori and Radford, 1995; Slack et al., 2001; Luning et al., 2002, Khoi., 2008)