The Shrimp Supply Chain Quality Improvement Perspective of Seafood Companies in the Mekong Delta,Vietnam

Seafood Supply Chain Quality Management: The Shrimp Supply Chain Quality Improvement Perspective of Seafood Companies in the Mekong Delta, Vietnam Vo Thi Thanh Loc Centre for Development Studies Rijksuniversiteit Groningen Dierenriemstraat 100 9742 AK Groningen The Netherlands ISBN 90-367-2670-0 Rijksuniversiteit Groningen Seafood Supply Chain Quality Management: The Shrimp Supply Chain Quality Improvement Perspective of Seafood Companies in the Mekong Delta, Vietnam Proefschrift ter verkrijging van het doctoraat in de Bedrijfskunde aan de Rijksuniversiteit Groningen op gezag van de Rector Magnificus, dr. F. Zwarts, in het openbaar te verdedigen op donderdag 26 june 2006 om 13.15 uur door Vo Thi Thanh Loc geboren op May 20, 1963 te Tien Giang (Vietnam) Promotores: Prof. Dr. J. Wijngaard Prof. Ir. A.C. Waszink Beoordelingscommissie: Prof. Dr. Ir. C.T.B. Ahaus Prof. Dr. S.W.F. Omta Prof. Dr. Ir. C. Schweigman Acknowledgements This dissertation was performed at the Faculty of Management and Organization, Centre for Development Studies (CDS), the Faculty of Economics of the University of Groningen in the Netherlands, and the School of Economics and Business Administration (SEBA) of Cantho University in Vietnam. Numerous institutions, organizations and individuals contributed to this dissertation in one way or another, such as financial, intellectual, logistical and moral support. For this reason, it is my pleasure to express my thanks. First, I would like to extend my gratitude to NUFFIC organization and the University of Groningen for their financial support and to Cantho University as well as SEBA for giving me the study leave to pursue a Ph.D. programme. On the intellectual side, this dissertation could have never seen the light of the day without the unstinting support and encouragement of my promotors Professor J. Wijngaard and Professor A.C. Waszink from the Faculty of Management and Organization. I would like to express my profound gratitude for opening the door for me to become a PhD candidate at this faculty. Without both of you, I would never have had that opportunity. I deeply thank you for your weekly supervision. I have enjoyed our discussions and have learned a great deal from you. My special thanks are devoted to Professor A.G. M. Steerneman for your statistical professional guidance and crucial comments. All three of you provide me with the freedom to explore research directions and choose the routes that I wanted to investigate. I would also like to thank Professor C.T.B. Ahaus, Professor S.W.F. Omta, and Professor C. Schweigman for reading my manuscript and for giving me critical comments. I sincerely thank all of the executive board members of 32 Seafood Companies in the MD for your information, data and hospitality. I am also grateful to all employees of company A and Company B for your assistance in testing the quality management framework and in having your feedback on the quality improvement plan. My special thanks will go to Mr. Tuong, Mr. Hieu, Ms. Nga, Mr. Ky, Mr. Ba Dung, and Mr. Dung. Without your support, this work would not have been undertaken. I especially thank Ms. Hong Minh, the deputy of Fisheries Industry; Mr. Dinh Hoe, the deputy head of VASEP in Ho Chi Minh City; Mr. Nguyen Chinh, the director of the NAFIQAVED branch in Cantho for all your information, comments and support. I would like to extend my gratitude to all members of local Agricultural departments and those of the shrimp supply chain for your ii support and information. The dissertation benefited from the secondary data and information provided especially by Mr. Thang, Mr. Tung, Mr. Quan, Ms. Tuyet, Ms. Thu Van and Mr. Thong in the provinces. I would like to thank Madeleine C. Gardeur, Erik Haarbrink, Gonny Lakerveld, Wiebe Zijlstra, Renny Kooi, Frans Tempelaar, Reike Tempelaar, Ger Lanjouw, Leidy Lanjouw, Pieter Boele, Blaine A. Thacker, Huong Nguyen Thu and Arthur de Boer for your help in different occasions. Anita Veltmaat and Richard Hughes deserve some extra words of thanks as you devoted much of your time to the correction of the first English version of this dissertation. While conducting the thesis, I also obtained helps from my colleagues Thu Tra, Thanh Be, Sanh, Nghia, Hanh, Dong Loc-Diem, Doan Khoi, Sinh-Khuyen, Hien, Tuyet, Thanh Quan, Tan Loc, Thanh Trieu, Bich-Phat, Hong Nhung. I would like to express my gratitude to all that you did for me. And, I really would like to thank all my other colleagues at SEBA for helping to cover my duty at the School. I am grateful to my close friends Duy Nguyen, Phu Son, Minh Yen, Hong-Tung, and Peter Bodde for your sympathy, love, and support when I faced problems in my study and in my life. I am also indebted to a few anonymous contributors and supporters whose constructive suggestions led to improvements in this book. Last but not least, though words may fail to express how I feel, I wish to thank my family members who took the burden of family responsibility while I was away from home. All of you supported and encouraged me so that I could concentrate on my studies. Also, I wish to express my gratitude to my mother and my siblings for their continual support, encouragement, love, and prayers during the last few years. I would like to apologise to those I do not mention by name here, however, I highly valued your kind support. I thank you all from deep in my heart! Groningen May 20, 2006 Vo Thi Thanh Loc iii Abstract In recent years, food quality and safety has become an issue of critical importance to all food businesses. Several examples of food quality and safety incidents have been highlighted in the media. These things have increased public concern regarding the safety of food supply in general and high-risk products in particular. Consumers and governments are demanding safe food, and these demands are being passed back along each step of the food supply chain, ultimately ending with the food producers. For different segments of the supply chain, special Quality-Assurance (QA) programs have been developed, in response to perceived risks, potential price premiums and customer requirements. Such QA programs, of which the Hazard Analysis and Critical Control Points (HACCP) methodology is the most important in terms of international trade and food quality and safety. The absence of such systems will increasingly constitute a barrier to accessing export markets. The present research deals with Seafood Supply Chain Quality Management - The Shrimp Supply Chain Quality Improvement Perspective of Seafood Companies in the Mekong Delta (Vietnam). It will show the development of a supply chain quality management framework through a techno-managerial approach. The framework includes measures for shrimp quality and safety assurance (i) in primary production, such as supplier quality management and partnerships; (ii) at company level such as quality management, especially HACCP implementation; and (iii) at the distribution stage with focusing on storage and transportation. In addition, the framework demonstrates roles of the government, local agricultural departments, the Vietnam Association of Seafood Exporters and Producers (VASEP) and The National Fisheries Quality Assurance and Veterinary Directorate (NAFIQAVED) that are crucial for achieving quality and safe objectives for Vietnam’s seafood in the entire chain, especially in primary production. The products of the research also provide a quality improvement process for the seafood companies and potential measures to improve further product safety and quality in the chain. Contents Acknowledgements Abstract Contents List of figures List of tables Glossary of Acronyms PART 1 INTRODUCTION Chapter 1 Research Introduction 1 1.1 Common problems in global food safety and quality 1 1.2 Vietnam’s sea product problems: an overview 3 1.2.1 General introduction relating to seafood products in Vietnam 3 1.2.2 Problems relating to the quality of Vietnam’s seafood products 7 1.3 Shrimp quality control problems in the MD 10 1.3.1 Introduction 10 1.3.2 Shrimp quality control problems in the MD 12 1.4 Research objective 20 1.5 Research structure, methods and methodology 20 1.5.1 Step 1 - Research background, structure and methodology 21 1.5.2 Step 2 – Literature review 21 1.5.3 Step 3 – Company survey 21 1.5.4 Step 4 – Development of a supply chain quality management framework 22 1.5.5 Step 5 – Testing the framework at the SFCs 22 1.5.6 Step 6 – The intra-SFC quality improvement measures 23 1.5.7 Step 7 - The chain quality improvement measures 23 1.5.8 Step 8 - Research conclusions and recommendations 24 1.6 Summary 24 vi PART 2 LITERATURE REVIEW Chapter 2 Literature review 25 2.1 Introduction 25 2.2 The role of HACCP in ensuring food safety 27 2.2.1 The HACCP system 27 2.2.2 HACCP and other prerequisite programs 31 2.3 The role of government and industry in food safety assurance 33 2.4 Current situation of HACCP implementation in the world 36 2.4.1 HACCP and international trade 36 2.4.2 The implementation of HACCP in the world 38 2.5 Food safety constraints and problems in developing countries 41 2.5.1 Technological constraints in HACCP implementation 41 2.5.2 Managerial problems of HACCP implementation 42 2.5.3 Techno-managerial constraints of HACCP implementation in Vietnam 43 2.6 Techno-managerial approach for food safety and quality management 44 2.6.1 Techno-managerial approach 44 2.6.2 The food quality management model by means of a techno-managerial approach 45 2.6.3 Food supply chain management 49 2.7 Summary 49 PART 3 RESEARCH IMPLEMENTATION AND PRODUCTS Chapter 3 Seafood supply chain quality issues and discussion in the MD 51 3.1 Data collection by questionnaire 51 3.1.1 Questionnaire design 51 3.1.2 Questionnaire contents 53 3.2 The survey results: general information 54 3.2.1 Interviewee general information 54 3.2.2 Company general information 55 3.2.3 Quality management of the interviewed SFCs 56 3.3 The role of the government and industry 58 3.4 Shrimp supply chain quality issues and resulting discussion in the MD 59 3.4.1 Hatchery production 60 3.4.2 Farm production 63 3.4.3 Catching activities 65 3.4.4 Collector/Wholesale buyer 65 3.4.5 Manufacturing process 68 vii 3.4.6 Distribution stage 72 3.5 The supply chain deficiencies in shrimp quality assurance 75 3.6 Summary 77 Chapter 4 Supply chain quality management framework 79 4.1 Shrimp quality and safety in primary production 80 4.1.1 The role of government institutes, industry and support organizations 82 4.1.2 The role of seafood companies 83 4.2 Measures for shrimp quality management and improvement in SFCs 85 4.2.1 Quality control problems at the company level 85 4.2.2 Quality management in SFCs 85 4.2.3 Measures to improve the HACCP system 87 4.2.4 Shrimp quality and safety at the distribution stage 93 4.3 Summary 94 Chapter 5 Test of the quality management system in the MD’s seafood companies 95 5.1 Selection of case studies and test plan 95 5.1.1 Case selection 95 5.1.2 Test plan 96 5.2 Company information and test results 97 5.2.1 General information relating to the two test companies 97 5.2.2 Quality management information of the two test companies 100 5.2.3 HACCP test results 102 5.3 Explanation and discussion of test results 104 5.3.1 Quality gaps in the companies 104 5.3.2 Deficiencies in the test company chains 109 5.4 Summary 115 Chapter 6 The seafood supply chain quality improvement 117 6.1 Introduction 117 6.2 The intra-SFC’s quality improvement measures and feedback 118 6.2.1 The intra-SFC’s quality improvement implementation process 118 6.2.2 Feedback about the SFC quality improvement implementation Process 125 6.3 Seafood chain quality improvement measures 127 6.3.1 Feedback about chain quality improvement of the SFC meeting participants 127 6.3.2 Chain quality improvement measures 128 6.4 Summary 134 viii PART 4 CONCLUSIONS AND RECOMMENDATIONS Chapter 7 Conclusions and recommendations 135 7.1 Introduction 135 7.2 The most important research findings and conclusions 135 7.2.1 Importance of HACCP systems in food quality assurance 135 7.2.2 The survey results 136 7.2.3 The seafood supply chain management framework 138 7.2.4 Test results in two case studies 138 7.2.5 The SFC quality improvement process 139 7.2.6 Chain quality improvement measures 139 7.3 Recommendations for further seafood quality improvement 140 7.3.1 Recommendations for the test companies 140 7.3.2 Recommendations at chain level 141 7.3.3 Managerial recommendations 141 7.3.4 Technological recommendations 143 7.4 General situations of SFCs in the MD and the test companies at present (2006) 144 7.5 Recommendations for further research 144 REFERENCES 147 APPENDICES 1. Questionnaire to interview SFC 161 2. Coding 179 3. List of the seafood companies 181 4. List of the interviewees 185 5. The situation of the world’s, Vietnam’s and the MD’s seafood markets 189 6. HACCP procedure and principles and supplier selection criteria 205 7. Test plan and test result tables 213 8. Questions for chain actors’ interviews 225 SUMMARY IN ENGLISH 229 SUMMARY IN DUTCH 231 SUMMARY IN VIETNAMESE 233 ix List of figures Figure 1.1 Maps of Vietnam and the South of Vietnam 5 Figure 1.2 The structure of Vietnam’s SFC organization 6 Figure 1.3 The supply chain quality management of interviewed SFCs 13 Figure 1.4 The fish chain in the Netherlands 14 Figure 1.5 The shrimp chain in the MD 15 Figure 1.6 The life cycle of the black tiger shrimp 16 Figure 2.1 Different approaches to food quality management 45 Figure 2.2 Food quality management model (Luning, et al., 2002) 46 Figure 2.3 Common QAS schematically mapped according to their technological and management focus 47 Figure 3.1 Questionnaire design process 52 Figure 3.2 Managerial structure of the Fisheries Ministry regarding fishery safety and protection 59 Figure 3.3 The HACCP and the role of government in the shrimp chain in the MD 60 Figure 3.4 Shrimp problems in hatchery and farm productions 62 Figure 3.5 Shrimp problems at the collector/wholesale buyer stage 67 Figure 3.6 Shrimp problems in the manufacturing process 69 Figure 3.7 Shrimp problems in Distribution stage 73 Figure 3.8 Supply chain deficiencies in shrimp quality assurance 75 Figure 4.1 Seafood Supply Chain Quality Management Framework 81 Figure 4.2 Tools for supplier quality management 84 Figure 5.1 Some examples of shrimp products from Company A 99 Figure 5.2 Some examples of shrimp products from Company B 100 Figure 6.1 The quality improvement implementation process 119 Figure 6.2 The seafood supply chain factors 126 Figure 7.1 Managerial levels, knowledge and skills 143 x List of tables Table 1.1 Top ten export SFCs in 2002 11 Table 1.2 Factors affecting shrimp product quality 12 Table 3.1 General information about the companies interviewed 55 Table 3.2 Leadership related to QM of interviewed companies 56 Table 3.3 Data set for flow diagrams of SFCs 70 Table 3.4 The percentage of SFCs that have established CCPs 71 Table 5.1 Main characteristics of selected cases in terms of the indicators 96 Table 5.2 General information relating to the test companies 98 Table 5.3 Chain information for the companies 100 Table 5.4 HACCP test results 102 Table 6.1 The interview schedule and tools 129 Table 6.2 The relation of chain problems, interview topics and chain factors 130 xi Glossary of Acronyms BRC British Retail Consortium CCP Critical Control Points DF Department of Fisheries DST Department of Science and Technology EC Extension Centre EU European Union FRDP Fisheries Resource Development & Protection FS Food Safety GHP Good Hygiene Practices GMP Good Manufacturing Practice HACCP Hazard Analysis and Critical Control Points HCMC Ho Chi Minh City ICMSF International Commission of Microbiological Specifications for Foods ISO International Standard Organization MBV Monodon Basulovirus MD Mekong Delta NACMCF National Advisory Committee for Microbiological Criteria for Foods NAFIQACEN National Fisheries Inspection and Quality Assurance Centre NAFIQAVED National Fisheries Quality Assurance and Veterinary Directorate OASIS Organization for the Advancement of Structured Information Standards PL15 Size of shrimp seed ready for the farmers to breed QA Quality Assurance QC Quality Control QM Quality Management SCM Supply Chain Management SEAPRODEX Sea Product Import-Export Corporation SFCs Seafood Companies SOEs State Owned Enterprises SQF Safe Quality Food SSOP Sanitation Standard Operation Procedures SWOT Strengths, Weaknesses, Opportunities, Threats TQM Total Quality Management US United States USDA United State Department of Agriculture xii VASEP Vietnam Association of Seafood Exporters and Producers VCCI Vietnam Chamber of Commerce and Industry WHO World Health Organization WSD White Spot Disease YHD Yellow Heat Disease Chapter 1 Research Introduction At present (2002), Vietnam’s seafood products in general and shrimp products in particular face many quality control challenges throughout the product range – particularly in export markets. Incomplete quality control during the primary production has caused hazardous infections in raw materials. The lack of strict quality management and modern technological investments during processing and distribution, especially the insufficient application of Hazard Analysis and Critical Control Points (HACCP), continues to lead to hazardous infection in final products. As a result, Vietnam’s seafood products do not meet customer requirements and expectations with respect to product quality. This is one of the reasons why research on quality control management in the seafood supply chain – the Shrimp Supply Chain Quality Improvement Perspective for Seafood Companies (SFCs) in the Mekong Delta (MD), Vietnam – is being conducted. Chapter 1 will describe in more detail the present seafood situation in Vietnam. More specifically, it will present the background and necessary information for establishing research problems, the research objective, the research structure, methods, and methodology. The changes of these situations in the coming years will be discussed in a Section 7.4 of Chapter 7. 1.1 Common problems in global food safety and quality Food quality assurance is now recognized as essential for an efficient and internationally competitive business. International markets demand that all steps in the food supply chain take customer and consumer preferences fully into account, that suppliers meet tighter food hygiene and safety standards, and assure constant quality. Indications are that world food suppliers will be required to provide food safety and quality assurances by the year 2010. Global trends that have an impact on food safety and quality assurance can be summarized as follows (Vietnam Economic Review, 2002): • The demand for food is at the cost of economic growth; Chapter 1 2 • The demand for ‘safe food’ is increasing; • The demand for ‘quality assured’ food is increasing; • Business structures are changing; and • Food-borne illnesses occur more frequently. The World Health Organization (WHO) reports a rising number of food-borne illnesses in industrialized countries. The po