Ứng dụng chu trình PDCA tại doanh nghiệp nông sản đạt chuẩn hữu cơ USDA. Nghiên cứu tình huống tại Công ty TNHH tiềm năng sinh thái Hòa Lạc

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Bài viết này chỉ ra tầm quan trọng của các sản phẩm hữu cơ, qua đó giới thiệu một tiêu chuẩn hữu cơ của Mỹ - USDA Organic, đồng thời thảo luận các vấn đề cốt lõi khi áp dụng tiêu chuẩn USDA Organic. Nghiên cứu sử dụng cách tiếp cận 4M1E và sơ đồ xương cá Ishikawa để phân tích các quy định cụ thể trong chứng nhận USDA Organic thông qua nghiên cứu thực nghiệm tại Công ty TNHH Tiềm năng Sinh thái Hòa Lạc. Mời các bạn cùng tham khảo!

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Nội dung Text: Ứng dụng chu trình PDCA tại doanh nghiệp nông sản đạt chuẩn hữu cơ USDA. Nghiên cứu tình huống tại Công ty TNHH tiềm năng sinh thái Hòa Lạc

INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2020 ICYREB 2020 THE APPLICATION OF THE PDCA CYCLE IN AGRICULTURAL ENTERPRISES MEETING USDA ORGANIC CERTIFICATION A CASE STUDY OF HOALAC POTECO CO., LTD ỨNG DỤNG CHU TRÌNH PDCA TẠI DOANH NGHIỆP NÔNG SẢN ĐẠT CHUẨN HỮU CƠ USDA. NGHIÊN CỨU TÌNH HUỐNG TẠI CÔNG TY TNHH TIỀM NĂNG SINH THÁI HÒA LẠC Nguyễn Mạnh Tiến; Nguyễn Thị Thanh Huyền; Nguyễn Thị Chung Anh University of Economics and Business, VNU nguyenmanhtiend32@gmail.com Abstracts This paper presents the importance of organic products, introduces USDA Organic certi- fication and discuss some practical issues for Vietnamese organic producers to achieve this cer- tificate. This study uses the 4E1M concept and Ishikawa fishbone diagram to analyze the specific regulations being gained through the field study of Hoalac Poteco. The findings show that there are some ineffective points in the process of applying these standards in Hoalac Poteco. Thus, this paper suggests solutions for Hoalac Poteco in particular and Vietnamese agricultural en- terprises in general by applying the PDCA Cycle to meet standards of USDA Organic Certifica- tion effectively and efficiently. Keywords: organic food, USDA certification, PDCA cycle, 4E1M concept, Ishikawa diagram. Tóm tắt Bài viết này chỉ ra tầm quan trọng của các sản phẩm hữu cơ, qua đó giới thiệu một tiêu chuẩn hữu cơ của Mỹ - USDA Organic, đồng thời thảo luận các vấn đề cốt lõi khi áp dụng tiêu chuẩn USDA Organic. Nghiên cứu sử dụng cách tiếp cận 4M1E và sơ đồ xương cá Ishikawa để phân tích các quy định cụ thể trong chứng nhận USDA Organic thông qua nghiên cứu thực nghiệm tại Công ty TNHH Tiềm năng Sinh thái Hòa Lạc. Kết quả nghiên cứu chỉ ra rằng trong quy trình sản xuất sản phẩm của Công ty TNHH Tiềm năng Sinh thái Hòa Lạc vẫn còn tồn tại một số yếu tố hoạt động chưa hiệu quả. Do đó, nhóm tác giả đề xuất một số giải pháp cho doanh nghiệp sản xuất Hòa Lạc nói riêng và các doanh nghiệp nông sản Việt Nam nói chung bằng cách áp dụng chu trình PDCA trong vận hành doanh nghiệp để đáp ứng các tiêu chuẩn khắt khe của chứng nhận hữu cơ USDA một cách hiệu quả. Từ khóa: thực phẩm hữu cơ, chứng nhận hữu cơ USDA, chu trình PDCA, 4M1E, sơ đồ xương cá Ishikawa. 1. Introduction Vegetables play an irreplaceable role in human diet. According to the World Health Or- ganization (WHO), each person should consume 400g of vegetables and fruits per day (Kinder- sley, D. 2015). 169
INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2020 ICYREB 2020 In recent decades, the demand for agricultural products and the prices of such products are on the rise under the shifts in the population structure and environmental factors. Indeed, the cur- rent world population is 7.4 billion and is projected to reach 9.5 billion by 2050 (United Nation, 2012). This is compounded by the fact that the world’s population is not only increasing, but also getting wealthier. Particularly, only 1.4 billion people in the world were middle class in 2000, but this figure is estimated to increase to 3.25 billion by 2020 (Kharas, H. & Gertz, G. 2010). Since the middle class consumes more and requires better-quality products, the agricultural sector is expected to grow considerably with a larger market. Besides, some factors regarding climate change, industrialization and urbanization have a substantial impact on the resources of this sector. Therefore, it can be seen that the new approach for food production needs to address the issues of quantity, quality and sustainability. Organic agriculture is one of the promising models meeting the above conditions. Organic foods are particularly appealing to health-conscious consumers as they are cultivated without the involvement of chemicals. The global organic food and beverages market is projected to reach $327 billion by 2022, about three times more than $115 billion in 2015 (Dwivedi, D. 2016). Sim- ilarly, the domestic market itself shares the same tendency as Vietnam’s economic growth is main- tained at a high level, averaging 6.5% per year (The World Bank, 2019). In addition, the growing concern over food contamination has been making fresh produce, especially organic food, gain more traction among customers. Vietnam is a tropical country with many favorable conditions to develop the agricultural industry. With geopolitical incentives, agriculture is considered a strategic sector of the country. In fact, 37.6% of Vietnamese laborers are involved in this sector (General Statistics Office of Vietnam, 2018). However, the prestige and quality of Vietnamese agricultural products have not been guaranteed because the production process focuses too much on productivity and crop in- tensification, and farmers’ awareness is still low. Consequently, those farmers may use toxic chemicals at their will, which adversely affects the health of consumers as well as the environ- ment. Gradually, customers will lose confidence in Vietnamese agricultural products. Currently, small and medium-sized enterprises (SMEs) in organic production in Vietnam are facing challenges of market pie when cheaper agricultural products from large-scale producing countries are imported into Vietnam. Also, it is the cost that is a problem making such companies unable to compete in traditional markets. Indeed, the primary market segmentation for these com- panies is the middle class and upper class usually living in metropolitan areas. Therefore, im- proving the quality and brand of the product is considered a strategic priority for these SMEs. In particular, an establishment of standards for agricultural production will help businesses not only build a good production model which greatly contributes to the quality improvement, but also gain customers’ trust immediately (National young farmer coalition, 2014). Improving the quality, output and sustainability in agricultural production helps businesses gain consumers’ confidence. In today’s globalized world, promoting international trade is in- evitable. Free trade agreements established between Vietnam and many other countries will be golden opportunities if the domestic production capacity is good. For example, the European Union Vietnam Free Trade Agreement (EVFTA), taking effect in 2020, has paved the way for 170
INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2020 ICYREB 2020 increased trade in many economic sectors, especially in the organic food industry, between Viet- nam and the EU which accounts for 29% of the global market share of organic foods (EU Agri- cultural Markets Briefs, 2019). As a result, it can be said that improving the quality of agricultural products is a strategic opportunity for Vietnam in order to bring this sector to the global market. Therefore, applying organic farming with organic standards for crop production is a po- tential solution for businesses to respond to the requirements of yields, quality and sustainable development. In this study, we selected the USDA organic regulations, which is considered the most rigorous and highest standard in organic production. In Vietnam, there are currently only 114 organizations meeting this standard. By researching on this most advanced organic certifi- cation, authors want to bring out the significant issues that get in the progress of achieving organic approval in general and propose appropriate solutions for these issues. Hoa Lac Potential Ecological Company Limited was established in 2010, and up to now the company has been operating for 10 years under the organic model. In December 2018, this company was certified organic by the U.S. Department of Agriculture (USDA). HOALAC POTECO is one of the few direct manufacturers among 114 firms that certified by USDA in Viet- nam, the rest are distributors and processors. The study focuses on analyzing the resources to meet the USDA organic regulations and finding ineffective points in the process of applying stan- dards of this company, thereby drawing experience and solutions for this company (HOALAC POTECO CO., LTD) in particular as well as other organic producers in general in order to apply organic regulations effectively. 2. Literature review and Methodology 2.1 Literature review Definition of organic production In 1995, the National Organic Standards Board (NOSB) defined organic agriculture as “an ecological production management system that promotes and enhances biodiversity, biological cycles, and soil biological activity.” In 2002, the National Organic Program (NOP) defined organic agriculture as “Organic pro- duction [is] a production system that...respond[s] to site-specific conditions by integrating cultural, biological, and mechanical practices that foster cycling of resources, promote ecological balance, and conserve biological diversity” (Pamela Coleman, 2012). USDA organic regulations Organic certification verifies that organic producers (farmers) or organic handlers (proces- sors) anywhere in the world has complied with organic regulations of the U.S. Department of Agriculture (USDA) and allows them to sell, label and represent their product as organic. These regulations describe the specific standards which are necessary for producers to label their food or fibre products with the USDA organic seal. The National Organic Program (NOP) administers these regulations (National Organic Program, U.S. Department of Agriculture, 2012). A product is required to adhere to very strict rules and standards to be certified organic by the U.S. Department of Agriculture (USDA). Regulations can be found under Title 7, Part 205 of the Code of Federal Regulations (Title 7 deals with agriculture, one of 50 broad topic areas that 171
INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2020 ICYREB 2020 are subject to Federal regulation.). (Electronic Code of Federal Regulations, Title 7 → Subtitle B → Chapter I → Subchapter M → Part 205). In this study, we focus on cultivation criteria to match the research subject of Hoa Lac Potential Ecological Company Limited. The application of the USDA organic regulations can bring about some following benefits: (1) Providing a generally accepted standard, (2) Acting as an effective means of communication with customers (3) Gaining new customers confidence immediately, (4) Marketing and identifying products easily, (5) Explaining the price of products easily and (6) Acting as a guarantee for the quality of products (Oakley, E. 2014). The factors of production Production is the process of combining physical and non-material inputs, such as plans, know-how, etc., to create products for consumption (outputs) (Kotler, P., Armstrong, G., 2006). In particular, factors in production are 4Ms (Man, Machine, Method, Material) which are widely used for root-cause analysis. In a production environment, this pattern is widely applied to control production operations or product improvement (Long Bao, 2019). Also, 4Ms is one of the key tools for leading manufacturers (Schiraldi, M. 2013). In this article, the authors use a more extensive analytical framework called 4M1E or 5Ms (man, machine, method, material, environment). Ishikawa Fishbone Diagram (The cause and effect diagram) This cause analysis tool was named after the Japanese man called Ishikawa Kaoru and made well-known in the 1960s. In fact, he was a pioneer of the quality management process in the Kawasaki shipyards and has been considered one of the leading fathers of modern manage- ment. Because of the shape resembling the side view of a fish skeleton, the diagram is also known as a fishbone diagram. The technique is used as a diagram-based approach for brainstorming all of the possible causes of a problem. By using this diagram, situations can be analyzed carefully. In particular, this tool consists of four stages: (1) Identify the issue, (2) Find out the main involved factors, (3) Identify the possible causes and (4) Analyze the diagram (Liliana, L. 2016). In order to identify these sources of variation, we group causes into main categories. Typ- ically, such categories include: people, methods, machines, materials, measurements and envi- ronment (DK Publish, 2014). In 1990, Ishikawa and Loftus defined the diagram as “a graphic representation that schemat- ically illustrates the relations between a specific result and its causes” (Ishikawa, K. & Loftus, J. H. 1990). In particular, the fish head is the negative problem while the fish bone structure helps to describe the potential causes and the sub-causes. Therefore, the diagram clearly reveals the re- lations between a problem identified in a product and its potential causes. The PDCA Cycle PDCA (Plan – Do – Check – Action), used in company for the control and continuous im- provement of processes and products, is an iterative four-step management method (Tague, N. R. 2005). 172
INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2020 ICYREB 2020 The actual results of an action are compared to a set point or a target in a central process. Then, the discrepancy between the two is noted and if the difference is considerable, some cor- rective measures are adopted. The repeated and continuous nature of continuous improvement follows this usual definition of control and is repeated by the PCDA (Plan - Do - Check - Act) cycle (Basu, R. 2004). This is also referred to as the Deming cycle, named after W. E. Deming. Another variation of PCDA is PDSA (Plan - Do - Study - Act) (Sokovic, M., & Pavletic, D., 2007, 369-378). Act Plan Managing Nonconformity The Quality Concept and Objectives Improvement Statutory Considerations ISO 9001 Certification Product Liability and Product Safety Cultural and Organizational Aspects Training for Quality Total Quality Management The Control of Design Environmental Management Systems Management System Integration Check Do An Introduction to Statistics Procurement Control Charts Just-in-time Supplies Inspection Process Capability Functional Testing Product Reliability Inspection and Measurement Equipment Materials Handling Metropoly Servicing Quality Audits and Reviews Service Quality Quality-Safety-Related Cost Documentations and Records Benchmarking Controlling Changes Standards, Standardization, Conformity and Com- patibility Figure 1: PDCA Cycle Source: Gower Handbook of Quality Management, M. Seaver (2003) 173
INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2020 ICYREB 2020 2.2. Methodology In this study, the authors make use of qualitative research techniques based on analysis of key factors (5Ms: man, machine, method, material, environment) in production and the role of such factors in the application of USDA organic regulations for the company. According to the TQC Center for Testing and Quality Certification, these factors are the main ones for all systems. Similarly, in 1998, Allan Miller et al. recommended to use 4M1E factors to identify the primary, or “root cause”, of a problem and enhance the product quality (Positioning the farm business, 1998). Also, in 2011, it was proved that these factors play an important role in technical quality (Yihua, M., & Tuo, X., 2011). The five factors were analyzed on how it encourages or discourages the progress to company’s achievement of the certificate. Another information collection method used in this study is on-site observation. To be ob- jective researchers take product samples, measure product quality directly over a period of time. In addition, the cause and effect diagram (Ishikawa diagram) are used to identify the root causes of problems. The best technique to find the causes of the problem is to form a quality team (people who often work together) and then brainstorm to detect the main causes. In this study, the quality team consists of two executive officers and 2 leaders of production groups. Since there were some limitations in gathering the quality group for brainstorming, the authors collected opinions of these participants one by one and re-systemed their opinions into the chart. After fin- ishing the chart, each cause was voted to find out the main. 3. The results of factor analysis on the implementation of USDA organic regulations at Hoa Lac Poteco Hoa Lac Potential Ecological Company Limited Hoa Lac Potential Ecological Company Limited was established in September 2010. After nearly 10 years of operation, this company has become one of the largest organic producers in the agricultural industry in Vietnam. The company has obtained many certifications from The International Federation of Organic Agriculture Movements (IFOAM - Organics International), the USDA and ISO 9001: 2015. The average annual turnover of the company fluctuates at 50 billion VND, providing jobs for more than 100 employees. Currently, the company is focusing on growing and supplying organic vegetables and fruits which are labelled as Dai Ngan. The main goals of the business in the next 5 years are to expand the domestic market, to enter the in- ternational market and increase the revenue by 30% from the 2018 figure of 49,382 million VND. The results of 5Ms (4M1E) analysis Man: The company’s employees have long-term experience in agriculture. Through the survey, it was found that 50/50 of surveyed employees (out of a total of 125 employees) have grasped the main rules of organic practice. This is a testament to the effective internal training activities of the company. In fact, although there are no human criteria in the USDA organic reg- ulations, people have a substantial impact on the entire production process. Therefore, the long- term experience of the employees and the effective training activities of the business are the main reasons for the successful application of organic standards. Machine: Since the characteristic of the majority of the organic farming model is labor in- 174
INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2020 ICYREB 2020 tensive, the participation of the modern machinery in this model is far less than that of the inten- sive farming model on a large scale. Besides, it is the production facility located in an uneven and valley-like area that limits the use of large-capacity machines. However, the company is very active in applying tools such as cold chambers, packaging machines, agricultural films, etc. to improve production efficiency. Also, the organic rules do not refer to the productivity and quality aspects of the equipment, but only focus on the equipment hygiene to avoid product mixing and ensuring the organicity of the product. Method: The company has a typical organic model with nearly ten years of experience in this field. The farming techniques used are 100% organic. Particularly, some typical methods of the company are treating organic waste with earthworms, using cover crops to improve soil and water quality, and using sprinkler and drip irrigation systems. Nevertheless, the method of using organic fertilizer applied to the company needs to be changed to meet the criteria of prioritizing prevention over treatment and protect the ecological balance of the cultivating area. Material: Seed is self-controlled by the company (110/112 plant varieties and vermicom- post are produced by the company itself). Self-control of raw materials makes it easy for the com- pany to demonstrate the organic origin, ensuring that products are not mixed with genetically modified, non-organic varieties. Also, autonomous seed systems help to reduce production costs when the seeds proven organic usually are at a high price. Environment: The company is a huge farm with substantial acreage (180 ha, of which 10% is used). The virgin land meets the requirement regarding ecological isolation and balance of the USDA organic regulations. The three natural factors that are important in agricultural pro- duction are soil, water and air. Among them, the arable land of the farm located on Ba Mountain is virgin land with many native trees, such as Imperata cylindrica , Cyperus alternifolius, Mua flower, etc., which have grown naturally without the intervention of humans and the pollution. The water source is the underground water from Vua Ba Mountain, which has been tested and acknowledged as the high purity water. Water is taken to tanks with a total capacity of 2000m3, using advanced sprinkler and drip irrigation systems on 100% of the cultivated land. The virgin area is far away from residential areas and industrial zones, ensuring air quality. Table 1: Points to be improved in the operation of Hoa Lac Poteco Main criteria Code Evaluation Modified Soil §205.202 Need modifications - Emphasize primitive characteristics which have been never infected with banned substances - Add criteria for ecological balance and ensure soil sustainability accord- ing to §205.202, §205.203 Soil fertility and §205.203 Need modifications - Emphasize the criteria of crop rota- nutrient manage- §205.205 tion and ecological protection ac- ment cording to §205.203 175
INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2020 ICYREB 2020 Seeds and plants §205.204 Qualified The management § 205.206 Need modifications - Emphasize the criteria of crop rota- of weeds, pests tion according to §205.205 and diseases - Eliminate natural pest control meth- ods, emphasize the principle of 3 lev- els of prevention over cure according to §205.206 Post-harvest treat- §205.270 – Qualified ment 205.272 Recordkeeping §205.103 Need modifications - Add records of planting - Add criteria of keeping records - Add criteria of prevention via fore- cast Source: Authors Before being certified, there were 4 out of 6 categories that the company needed further improvement to meet the USDA organic regulations. The fundamental changes lied in the tech- niques as the company has practiced the organic model for a long time. Therefore, there were no changes that required a lot of time and resources like a 3-year transition period without using any banned substances. Besides, criteria such as the protection of regional ecosystems or the buffer zone were those that had been done before and had not been recorded yet. In conclusion, those were small changes that could be achieved easily in the short term. Through the 5Ms analysis of the production for the success of Hoa Lac Poteco in applying USDA organic regulations, we draw the following conclusions: The advantage of the company is the natural factor (Environment) as this company is cul- tivating on virgin land which is unexploited and isolated from other areas. This is conducive to organic farming thanks to the low converting and isolating cost compared to other companies. Besides, methods and experience play a vitally important role as the company has applied organic standards for nearly 10 years. As a result, by having the right resources, the company has been certified organic by the U.S. Department of Agriculture (USDA). In addition to the purely technical elements in the USDA organic regulations, under onsite observation and through the sampling process aiming to evaluate effectiveness of the company in applying organic rules, the results are as follows: First, the production model is labor intensive due to the characteristics of the organic pro- duction, coupled with the fact that the use of personnel has not been optimal yet. In addition, labor market structural changes make the company unable to access cheap labor in the future. Second, through the sampling process from February, 1st 2020 to February, 21st 2020, it was found that there has been still a rate of defective products, returned products, and down-standard products from class 1 to class 2. Third, the output and quality are not equal across production regions. 176
INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2020 ICYREB 2020 The results of the Ishikawa Fishbone Diagram analysis to find the root causes of the above problems The root causes of the problems at Hoa Lac Poteco drawn by the quality team of 4 man- agement committee members are showed in three following models: Fig 2: Fishbone diagram analysing the causes of poor and uneven quality of products Source: Authors Fig 3: Fishbone diagram analysing the causes of poor product quality Source: Authors Fig 4: Fishbone diagram analysing causes of labor intensive Source: Authors 177
INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2020 ICYREB 2020 Causes of poor and uneven quality of products: iThere has not been any unique framework and quality scale for products in the list yet. iThere have not been any records or experience shared between production groups to minimize the impact of the natural factors in using large areas of cultivation and crop rotation as required by USDA. iProducts have been processed together; therefore, it is hard to evaluate and compare the production efficiency among separate regions. Causes of labor intensive: iThe production characteristic is one of the reasons. iTasks are assigned according to situations; mid-level leaders lack management skills; and there are no plans regarding the use of labor, causing waste of labor. 4. Recommendations and Solutions “USDA organic regulations” describes the practices and materials that are allowed or pro- hibited for organic production. Therefore, factors that help to improve production efficiency and product quality are not included. However, the purpose of following such rigorous rules is to cre- ate quality products for communities and improve the efficiency and profitability for companies. In other words, although problems in the production process are not directly mentioned in the regulations, they have a direct impact on the practices for organic production. For instance, pro- duction planning that puts profit as the top priority leads to intensive farming negatively affecting soil sustainability, which is one of the main terms in the “USDA organic regulations”. As a result, it is clear that standards assurance activities have an inextricable relationship with quality and performance improvement ones in organic farming. For HOALAC POTECO, although the company has been certified by the USDA, the prob- lems that are not included in the USDA organic regulations but directly affect the product quality and production efficiency should be addressed adequately. In fact, the company has not completed the scales for the product and the labor efficiency, which causes the uneven quality of products and the difficulty in evaluating the efficiency of each production area. As a result, it is necessary for the company to establish a complete set of criteria to evaluate product quality and labor effi- ciency. In order to do that, the USDA organic regulations can be referenced for product quality scales. In addition to the identified problems, the authors propose the PDCA cycle, a model of continuous improvement, in applying USDA organic regulations to achieve two goals of meeting technical standards and production efficiency. Specifically, the PDCA cycle aims to detect prob- lems and improve production efficiency. This cycle is particularly suitable for the company as all organic farms must be inspected and re-certified each year. Also, this cycle helps the company to map out a clear roadmap for application of standards. Below are some general steps when a business adopts USDA organic regulations following the steps in the PDCA cycle. 178
INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2020 ICYREB 2020 Figure 4: Four main steps in PCDA Cycle applying in agricultural companies Source: Authors Evaluating the organic system and planning the necessary changes are the prerequisites in pursuing an organic certification. This step helps the company find “gaps” between their existing operation system and requirements for accreditation. Finding these gaps is really important as it helps producers make informed decisions of whether they should pursue various certifications. This is simply because when the gap is too large, it means that producers have to invest a huge amount of money in technologies, infrastructure, etc. To illustrate, if a producer is going to im- plement organic practices on a normal farming area, she or he should take into account the enor- mous cost of creating the buffer zone and the isolation distance needed to prevent organic crop contamination with genetically modified (GM) pollen or prohibited substances. Therefore, the question for him or her should be whether he or she should cultivate that area or not. This is even more important for conventional farmers who are considering organic certification for their crops. As a result, once the producers decide to follow the rules, a clear roadmap should be put in place to implement necessary changes. After planning and identifying points that need to be changed, a business needs to broadly implement the plan. Since the typical characteristic of the organic sector is labor intensive, a large number of employees (most of them take on constantly changing tasks) is required. Therefore, it is necessary to make sure that all employees grasp the plan and the organic standards. This means the company has to have effective propaganda. Throughout the implementation, it is necessary to observe and find out ineffective points to change. In reality, controlling activities and adjustments are made right in the second stage to standardize the process. In the third stage, checking operation and continuous self-assessment are significant because this will help producers reduce the costs incurred when fixing the error (according to the correlation between the cost of the error and the fault location) and avoid un- necessary waste of resources. 179
INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2020 ICYREB 2020 The final stage is testing and accrediting. For HOALAC POTECO, the detected problems are outside the USDA organic regulations, so the company needs to focus on the third stage “checking operation and continuous self-assessment” to address aforementioned problems. Since PDCA cycle is a cyclic process, companies could repeat the PCDA steps as many times as needed until being certain that the PDCA cycle is as efficient as it can be. REFERENCES 1. Bao, L., Introduction about 4Ms, 2019. 2. Basu, R. (2004). Implementing quality: a practical guide to tools and techniques: en- abling the power of operational excellence. Cengage Learning EMEA. 3. Dwivedi, D. (2016), Organic Food and Beverages Market by Organic Foods: Global Opportunity Analysis and Industry Forecast 2014-2022. 4. EU Agricultural Markets Briefs, Organic farming in the EU A fast growing sector, 2019. 5. Electronic Code of Federal Regulations, Title 7, Subtitle B, Chapter I, Subchapter M, Part 205. 6. Kharas, H., & Gertz, G. (2010). The new global middle class: A cross-over from West to East. Wolfensohn Center for Development at Brookings, 1-14. 7. Ian, M. (2014), The Business Book. 8. Ishikawa, K., & Loftus, J. H. (1990). Introduction to quality control Tokyo. Japan: 3A Corporation. 9. Kindersley, D. (2015), How food works. 10. Kotler, P., Armstrong, G., Brown, L., Adam, S (2006), Marketing, 7th Edition. 11. Liliana, L. (2016, June). A new model of Ishikawa diagram for quality assessment. In IOP Conference Series: Materials Science and Engineering (Vol. 161, No. 1, p. 012099). IOP Publishing. 12. Miller, A., Boehlje, M., & Dobbins, C. L. (1998), Positioning the farm business (No. 1239-2016-101545). 13. National Organic Program, U.S. Department of Agriculture, (2012), What is Organic Certification? 14. National Young Farmer Coalition, (2014), Vegetable farmer’s guide to organic certifi- cation. 15. Oakley, E., National Young Farmer Coalition (2014), Vegetable farmer’s guide to or- ganic certification. 16. Pamela Coleman National Center for Appropriate Technology (NCAT) Agriculture Specialist, Guide for Organic Crop Producers, 2012. 180
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