Reg Clause Ag Marketing Resource Center Iowa State University Extension rclause@iastate.edu

Ray Hansen Specialist Ag Marketing Resource Center Iowa State University Extension hansenr@iastate.edu

Through implementation of an ISO program an organization develops its own system of guidance in order to better manage the business. Implementation of this system results in:

• Increased revenue or access to markets by responding to market opportunities.
• Improved utilization of resources and assets
• Strengthened customer loyalty
• Continual improvement of the business

Quality Management Principles

Intertwined throughout all successful ISO quality management systems eight guiding principles will be found.

1. Customer Focus -- Understanding current and future needs of customers because the success of the organization is entirely dependent on customer satisfaction.
2. Leadership -- Clear direction and purpose should drive every activity and decision within the organization.
3. Involvement of People -- Structuring the organization to empower people to best ensure success.
4. Process Approach -- Goals and objectives are more easily met when resources are managed as a system.
5. System Approach to Management -- Identifying and managing interrelated processes to achieve organizational effectiveness.
6. Continual Improvement -- A permanent goal should be to continually improve the overall performance of the organization.
7. Factual Approach to Decision Making -- Implementing factual analysis of data provides a basis for effective decision-making.
8. Mutually Beneficial Supplier Relationships -- Because every organization is dependent on both its customers and its quality suppliers mutually beneficial supply networks must be created.

The Certification Process

The following flow chart outlines the procedures for becoming ISO certified. However, prior to starting the audit process the business entity will need to develop and coordinate the appropriate documentation and procedures. There are four major documentation components:

• Quality Manual - provides a description of the enterprise and an overview of the QMS structure.
• Procedure Documents - Instructions for activities that effect quality. Defining who is responsible, when it is performed, where it occurs in the process.
• Working Documents - Specific instruction for each quality related task, and may include blueprints, checklists, flowcharts etc.
• Documentation Controls - Specific regulations on handling records, forms, labels. Orders etc.

ISO Certification Process

• Procedure Documents - Instructions for activities that effect quality. Defining who is responsible, when it is performed, where it occurs in the process.
• Working Documents - Specific instruction for each quality related task, and may include blueprints, checklists, flowcharts etc.
• Documentation Controls - Specific regulations on handling records, forms, labels. Orders etc.

Can ISO 9000 Successfully be Applied to Agriculture?

Although standardization and quality management systems have been around since the early 1900's and are widely accepted as the "norm" in business and industry they have never been widely adopted for production agriculture or for any significant portion of the food industry.

The rate at which production agriculture moves away from bulk commodities to differentiated products will dictate the rate at which quality management systems, such as ISO, gain acceptance. During the past decade biotechnology developments, increased organic acreage, and food traceability issues have all demonstrated the need for specialized marketing systems that help maintain product purity and quality control.

Evolving markets such as these repeatedly give us two important lessons.

1. The customer defines acceptable quality.
2. Early adapters to change have the most to gain.

Initial Certification

The amount of time and resources needed to reach the point of certification will vary with each individual business operation. Preparatory costs and time commitments are drastically reduced if the operation already utilizes some or all of the major documentation material. Costs can be reduced if portions of the QMS can cooperatively be developed within a farmer's group, guild or similar enterprises. Adequate time for training and implementation with all employees must also be factored into the time and cost equations. Depending on the level of involvement from outside consulting services a conservative time estimate from the time of commitment until certification can be achieved is 12 to 16 months. Because of the number of variables related to scope detailed cost estimates of achieving certification are difficult to estimate but can easily exceed several thousand dollars.

Post Certification

The actual cost of the third party audits will vary depending on the registrar firm used, but recent inquires indicate that audits will cost $1200-$1500 per day. A farm operation with less than 5 employees would require 2 days of audit time plus travel expenses once initial certification is achieved. Again these costs could be reduced slightly if working with a group or guild of producers.

The commitment to achieve and maintain ISO certification requires a significant allocation of resources. As the industry recognizes that nothing in the marketplace will pay more dividends than customer satisfaction "Quality Management" will increasingly become a very important value-added tool.