the role of iso registration in canadian apparel...
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THE ROLE OF ISO 9000 REGISTRATION IN CANADIAN APPAREL BUYERS'
VENDOR SELECTION
A Thesis
Presented to
The Faculty of Graduate Studies
of
The University of Guelph
by
ISMAT THAVER
In partial hlfillment of requirements
for the degree of
Master of Science
August, 200 1
O Ismat Thaver. 300 1
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ABSTRACT
THE ROLE OF ISO 9000 REGISTR4TION LN CANADIAN APPAREL BUYERS'
VENDOR SELECTION
lsmat Thaver University of Guelph, 200i
Advisor: Dr. Anne Wilcock
This thesis is a preliminary investigation of ISO 9000 registration's role in Canadian
apparel bu-ers' vendor selection. 1:s purpose was to secure opinions of buyers about ISO
9000's role as a critenon in selecting overseas vendors as well as an intbrrnation cue in
influencing tlieir attitudes and selection intentions toward registrred vendors. Fifty-six
apparel buyers from across Canada w r e surveyed using a self-administrred mailed
questionnaire. Results indicate that ISO 9000 was of little concern to buyers in their
evaluation of overseas vendors. and its presence did not influence buyers' preferences
toward these vendors. Preferences toward working with businesses registered to [SO
9000 were more apparent on the part of manufacturers and retailers as well as tims using
quality programs. Contributions of this research include determining industrial bicyers'
responses toward ISO 9000 in vendor selection. and generating a list of vendor criteria of
importance to Canadian apparel buyers.
ACKNO WLEDGEMENTS
1 have made it to the finish line and 1 cannot believe it. This thesis took its time. but
could not have been completed without the help from a few special people to whom I am
grateful.
Without my farnily's pritience. encouragement and not to forget. endless hours of baby-
sitting, 1 could not have corne this far. They have been a blessing. Thank you. Papa.
Murnmy. Atteqa, Fazi and Tehseen.
My advisor, Anne. was supportive from the time I applied to this program. through my
struggles midway, right up until the final stages of my thesis writing. I'm 'teaq-ly
indebted.
1 could not have managed without the help and guidance fiom my cornmittee and
department extended al1 the way overseas. My committee's painstaking reviews,
feedback and encouragement kept me on the right track despite the many wrong tums on
my part! To Anne, May, Lianxi and alsc Marjorie, I'm extremely grateful. Also. thanks
to Fran, Judy and Rita for making it easier for me to complete a thesis even from a
distance of many thousand miles.
Last, but not least, thanks to rny beautiful son Faizaan. who has been my inspiration.
Oh, and not to forget a green Camry which is so much part of our fmily. and without
which who knows if this could have been possible.
TABLE OF CONTENTS
LIST OF TABLES ....................................................................
. 1 INTRODUCTION ................................................................ ................................................... 1.1 Rationale for the Study
.................................................... 1.2 Research Approach ..................................................... 1 -3 Research Questions
.................................................... 1.4 Overview of the Study
....................... . 3 THE ISO 9000 QUALITY SYSTEM STANDARDS ................................................. Introduction to ISO 9000
................................ ................... . 2.1 1 What is ISO 9000? ,.
............... 2.1.2 What Registration Involves and Represents ......... 3.1.3 ISO 9000 Adoption by Regions and Countries
3.1.4 Differences between ISO 9000: 1 994 and ............................................... ISO 9000.2000
2.2 Existing Literature ...................................................... ........................... 2.2.1 ISO 9000's Impact on Business
.......................................... 2.2.2 ISO 9000 & Buyers ....... 2.2.3 ISO 9000 & Buyers' Vendor Selection Processes ...... 2.2.3.a. ISO 9000 as an Information Cue
2.2.3.b. ISO 9000 as a Vendor Criterion ....... ............. 2.2.4 Researc h Approach and Research Questions
...................................... . 3 BACKGROUND TO THE RESEARCH ......... 3.1 Objectives of/Sources for the Background Investigation
............................................... 3.2 Canadian Apparel Firrns ................................ 3.2.1 Apparel and Fabric Imports
......... 3.3 Importance of ISO 9000 to the Canadian Apparel Firms 3.4 Quality Programs .......................................................
................................... 3.4.1 Use of QuaIity Programs .................................... 3.4.2 Knowledge of ISO 9000 .................................... 3.4.3 Importance of ISO 9000
3.5 Vendor Selection.. ..................................................... ... 3.5.1 Criteria of Importance to Canadian AppareI Buyers .... 3.5.2 ISO 9000 as a Criterion and as an Information Cue
............................ 3.6 Results of the Background Investigation ................................. 3.7 Questions for the Quantitative Study
Page
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Page
. 4 METHODOLOGY ................................................................ 4.1 Research Questions .....................................................
............... 4.1.1 ISO 9000's Influence in Vendor Selection 4.1.1 .a. ISO 9000's Use as a Vendor . *
Cnterion .................................. ..... 4.1.1 . b. ISO 9000 as an Information Cue
4.1.2 Factors in Vendor Selection ................................ ............... 4.1 -2.a. Importance of ISO 9000
4.1 -2.b. Knowledge of ISO 9000 . Use of Quality Programs and Category of Firrn ......................................
4.2 Research Instrument ................................................... 4.2.1 Questionnaire Structure ....................................
.............................................. 4.2.2 Data Collection 4.3 Sarnple Selection ....................................................... 4.4 Data Analysis ...........................................................
......................................... 4.5 Assumptions and Limitations
. .......................................................................... 5 RESULTS 5.1 Sample Demographics .................................................
5.1.1 Location ...................................................... 5.1.2 Size ............................................................
................................... 5.1.3 Major Products Imported .......... 5.1.4 Buyers as Vendor Selection Decision-Makers
5.2 Quality Programs ....................................................... 5.2.1 Use ............................................................ 5.2.2 Description ....................................................
5.3 Knowledge of ISO 9000 ............................................... ................................................ 5.4 Importance of ISO 9000
........... 5.4.1 Importance of ISO 9000 by Category of Firrn 5.5 Vendor Criteria ..........................................................
............................. 5.5.1 Miscellaneous Vendor Criteria ... 5.5.2 Criteria Relating to ISO 9000 and Quality Programs
.............. 5.5.3 Difièrences in Criteria by Category of Firrn ........ 5.5.3 .a. Miscellaneous Vendor Criteria
..... 5.5.4 Differences in Criteria by Use of Quality Programs ....................................... 5.6 ISO 9000 as an Information Cue
............................................. 5.7 Factors in Vendor Selection .......... 5.7.1 Category of Firm and Use of Quality Programs
5.7.2 Importance of ISO 9000 and ffiowledge of ISO 9000 ...
LIST OF TABLES
Table:
. ..................................... 1 Share of ISO 9000 Registrations by Region
2 . Breakdown of ISO 9000 Registrations within North Arnerica ................
........... 3 . ISO 9000 Registration Statistics by Industrial Sectors Worldwide
4 . Reasons for Seeking ISO 9000 Registrations & the Reported Benefits .............................................................. Following Registration
......................................... 5 . Vendor Selection Criteria of Importance
6 . ISO 9000 Registrations in Canada ................................................
7 . Overseas Vendor Criteria List ......................................................
................................................... . 8 ISO 9000 Benefits for Pretesting
. .................................................... 9 Final List of ISO 9000 Benefits
10 . Survey Responses by Category of Firm ...........................................
1 1 . Responses by Province & Category of Firm .....................................
12 . Major Products Imported ............................................................
. ............................................................ 13 Quality Programs in Use
.................................... . 14 Knowledge of ISO 9000 by Category o f Fiml
........................................ . 15 ISO 9000 Benefits Ranked by Importance
........................................... . 16 ISO 9000 Benefits by Category of Firm
................................ 1 7 . Overseas Vendor Criteria Ranked by Importance
.................................. . 18 Important Vendor Criteria by Category of Firrn
........................... . 19 Attitudes & SeIection Intentions by Category of Firm
Page
14
14
15
20. Cornparison of Means between Importance of ISO 9000. Knowledge of B O 9000 & Use of Quality Programs with Attitudes & Selection Intentions.. . . . . . . . . . . . . . . . . . . . -. . . . . . . . . . . . . -. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 86
1: INTRODUCTION
The worldwide popularity of the ISO 9000 quality system standards cannot be denied.
One reason for the rapid spread is their applicability across industries and continents. A
second reason compelling f ims to seek ISO 9000 over other quality programs appears to
be the trade-related benefits. However. little evidence is available to verify that ES0 9000
registration indeed enables a firm to secure more business. This study attempts to verify
ISO 9000's usefulness as a means for gaining business advantage internationally. by
examining its role in Canadian apparel buyers' vendor selection.
1.1 Rationale for the Study
The ISO 9000 quality system standards are the most popular of the approximately 13,000
standards published in 1987 by the International Organization for Standardization (ISO)
in Geneva. Switzerland. They are management system standards for an organization's
processes, and not product standards. The ISO 9000 standards provide generic guidelines
for a quality system infrastructure that may be applied by any organization dealing with
any type of product or service. Quality in ISO 9000 refers to 'al2 those Jèatures of cr
prohrct or. a service which are reyrtir-ed by the custorner' and managing the actions taken
to satisfy customer requirements is what iinplementing the ISO 9000 quality standards
entails ('The ZSO Sumey of ISO 9000.. . '. 2000; Performance Management Network Inc.
Report, 1999). Extensive documentation of the processes that rneet the requirernents of
ISO 9000. as well as proof of their cornpliance with the documentation to an independent
auditor, enabtes a firm to register to the ISO 9000 standards.
An examination of research articles on ISO 9000 shows trade-related benefits attributed
to registration by fims across industries and countries. For example. firms have reported
expenencing 'increased chances of winning business' and 'incrensed exporrs' afier
registration ('Attitudes of "Captains of Industry". . .'. 1996: Sohrab. 1996). One major
concern. however, is the lack of empirical studies investigating claims of increased
business aftsr registration. Whether the trade-related benefits attributed to ISO 9000 are
equally applicable across industries is also not known.
The importance of studies verifying ISO 9000's role in trade stems from the fact that
many firn~s and trade organizations are inves'ting heavily in ISO 9000. both financially
and strategically. in the hope of securing more business. One example is Pakistan's
Export Promotion Bureau. which has been subsidizing the registration costs for al1 firms.
regardless of industry, with the objective of boosting exports ('Subsidy on issuance of
ISO certificate.. . ', 1998).
A related concern is that, in the studies that have attempted to verify the impact on
business from registration to ISO 9000. the prevalent focus has been the j h z s peï se.
Benefits reported in studies such as that ISO 9000 leads to 'improved crtslorner
sati~faclion ', and that the consequent 'higher rutings tvirh the cusfornrrs generutes more
business'. have been voiced by registered firms (-Attitudes of "Captains of Industry-'. . .'.
1996: 14; Monta. l996:28). Few studies have investigated the ISO 9000-related opinions
of the firms' customers such as the buyers with whom they deal. However. buyers'
perspectives on ISO 9000 registration in their vendors is important. According to
researchers, it is the importers. the buyers, who are more ofien setting the 'rules of the
game.' by 'chûosing exporter-; and export countries, rigidly specljjing the product to be
expor f ed. .. and even entering inro joint vrnrures ivith the exporters' (Liang & Parkhe.
1997: 520). Also. certain published articles on industriai buyers indicate that ISO 9000
registration in their vendors does not guarantee additional business. Clearly. information
about buyers' valuing registration in their vendors should be a more reIiable indication of
whether ISO 9000 is likely to provide business advantages.
Not only is more empirical research required to verify ISO 9000's usefulness as a means
to enhance trade v~ithin specific industries, but aIso the focus of that research needs tu be
the buyers, in order to secure more reliable data.
1.2 Research Approach
A search of the literature revealed that ISO 9000 could have a role in buyers' vendor
selection in two ways. The first is its use as a vendor criterion. Buyers evaluate multiple
criteria when selecting a vendor. Evaluation is difficult as the criteria for each vendor in
the selection pool have to be considered. This task becomes more cornplicated when
vendors are located overseas and cultural and economic factors add uncertainty to the
situation. Proponents of iSO 9000 have encouraged buyers to use ISO 9000 registration
as a criterion to ease their vendor selection process (Bossert. 1998). Their justification is
that ISO 9000 establishes a quality infrastructure within a vendor's organization. whereby
consistency in products and services is assured. However. Iittle is known about ISO
9000's use as a criterion in vendor selection. An examination of ISO 9000 registration's
importance as a criterion in vendor evaluations relative to other vendor criteria c m
indicate the likelihood of its use in evaluations.
ISO 9000's function as a stereotype Siat c m influence buyers' attitudes and selection
intentions toward registered vendors has also been suggested in the literature. ISO 9000
has been said to improve the image of registered vendors for their buyers (-ISO 9000:
Say What You Do...'. 1996). In fact. its presence has been said to be enough to qualify
vendors as prospective business partners for buyers (Ferguson. 1996). ISO 9000's role as
stereotypical information has been empirically exarnined by Bamey Pacheco (1997). He
found that ISO 9000 registration as an information cue had a significant influence on
household buyers' attitudes toward products from registered Trinidadian firms. although
only a positive, directional influence on perceived quality and purchase intentions.
Pacheco (1997) reasoned that ISO 9000 registration may not be sufficient to provide the
insurance needed for household buyers to accept products frorn less developed countries.
in this case, Trinidad. He also suggested that ISO 9000 may offer more 'firrn-specific
advantages szich us higher yuûlity Irvrls and eflciency' and so. unlike the country-of-
ongin cue. may be less able to influence overall product quality perceptions (ibid). This
study examines whether ISO 9000 as an information cue indeed suggests fim-specific
advantages, insofar as it can favorabiy influence industrial buyers' responses toward
registered vendors. specifically those located overseas. Whether ISO 9000 registration
by overseas vendors, prirnarily from the low-cost countries, can improve those vendors'
chances to secure business from domestic non-registered firms in a developed country is
one way to examine its influence as an information cue in vendor selection.
Certain factors are expected to act as determinants of buyers' responses to ISO 9000 in
vendor selection. Pacheco (1997) suggested the possibility of familiarity with ISO 9000
as playing a role in how buyers react to ISO 9000 in their product valuations.
4
AdditionaIly. buyers from firms that are already using quality programs have been
identified as those who would be more appreciative of a quaIity system in their vendors
(Goodman, 1998). Furthemore, researchers have linked individuals' beliefs with their
subsequent attitudes (Erickson et al.. 1984). As such, buyers' pnor beliefs about the
benefits attnbuted to ISO 9000 are expected to indicate how they wouid respond to
registered vendors. Finally, differences in vendor criteria of importance according to the
category of the firm by which the buyer is employed have also been found (Wagner et d.-
1989). For example, differences in the use of ISO 9000 as a criterion c m be expected to
vary according to whether the buyer represents a manufacturer or a retailer.
No study has previously investigated ISO 9000's role in industrial buyers' vendor
selection, or exarnined the importance of certain factors as determinants of buyers'
responses to ISO 9000. However. the implications from such a study are significant.
Findings about buyers favoring one vendor over another because of registration would
send an important message to vendors that are attempting to enhance their business in a
specific industry. One message is that registration can lead to business advantages.
Additionally. information about the use of quality prograrns in buyers' firms improving
their response to ISO 9000 in vendors. for example, could help the latter to promote their
registration. Findings about buyers not valuing registration are equally significant. as this
sends a signal to vendors to seek other avenues to improve their cornpetitiveness. This
may be achieved by focusing on those vendor criteria that are of importance to buyers.
Lastly. ISO 9000's usefulness in matters of trade within a specific industry is valuable for
consultants, trainers and proponents of ISO 9000. so that they can properIy educate and
guide firrns.
1.3 Research Questions
This study was designed to examine ISO 9000 registration's role in Canadian apparel
buyers' vendor selection. and to identiS factors that rnay be responsible for buyers'
favorable or unfavorable responses toward ISO 9000 in a vendor. It was particularly
interested in determining whether ISO 9000 registration is valuable for overseas vendors
that are hoping to enhance their business within the apparel sector. Two specific research
questions were addressed:
1) Are buyers influenced by ISO 9000 in vendor selection?
2) Do certain factors determine how buyers respond to ISO 9000 in vendor selection?
Factors examined include. firms' use of quality programs. category of firm. buyers-
howledge of ISO 9000. and buyers' beliefs about the importance of ISO 9000 in
leading to certain benefits.
1.4 Overview of the Study
The foundation of this study was established based on both the academic and practitioner
literature on ISO 9000. Additionally. multiple sources were used to address the research
questions. The ftamework of this study is presented in order to guide the reader.
What ISO 9000 is, and what is known regarding the business advantages of registration
to ISO 9000 in the academic and practitioner literature, is reviewed. Next. gaps in the
research are identified. A research approach involving buyers' perspectives on ISO 9000
in their vendors to substantiate ISO 9000's potential value for gaining new business is
proposed and justified. That approach forms the basis for this study. Two ways that ISO
9000 could have a role in buyers' vendor selection processes are then discussed. Related
6
research questions to be addressed in this study are presented toward the end of this
chapter. entitled The ISO 9000 Quality System Standards.
The Canadian apparel sector served as the context for this study. Apart from reasons of
convenience and being an area of interest to this researcher. the apparel sector was also
chosen because it belonged to the soft-goods sector. and was one for which previous
examinations of ISO 9000's importance to buyers had not been undertaken. How buyers
in this sector. in particula. view ISO 9000 was of interest. Because little has been
published about ISO 9000's importance within the apparel sector in Canada. a
background investigation was performed to gather information in accordance with the
research questions. Interviews with three individuals experienced with the apparel sector.
and a literature survey of Canadian Appnrel magazine, served as the primary and
secondary sources of this information, respectively. Findings from this investigation are
included in chapter 3. entitled Background to the Research. As a result of this
investigation. the initial research questions were refined into sub-questions, representing
the unresolved issues that were to be addressed in subsequent research.
A quantitative survey was designed based on the information from the background
investigation in order to better address the research questions. This survey served as the
primary source of information on Canadian apparel buyers' knowledge of and the
importance they attribute to ISO 9000. and their attitudes and selection intentions toward
registered vendors. Details about the survey design. data collection and analysis. and
sample selection processes. are included in the Methodology section, chapter 4. A
discussion of the overall findings is included at the end of chapter 5, entitled Results.
Lastly, conclusions about ISO 90003 role in Canadian apparel buyers' vendor selection,
as drawn from the findings in the literature survey. interviews and the quantitative study
are presented. Recommeildations for future research in this area are included. The
academic and practical contributions of this research are highlighted and the implications
fiom this study discussed.
2: THE ISO 9000 QUALITY SYSTEM STANDARDS
An introduction to the ISO 9000 quality standards i s included in this section. Findings
from extant studies that verify the benefits attributed to ISO 9000. especially those that
are trade-related, are reviewed. Available research on buyers' opinions of ISO 9000 is
examined next. Why ISO 9000 registration in their vendors shozrld be of importance to
buyers is justified, followed by an explmation of the two ways that ISO 9000 can enter
buyers' vendor selection processes. The research approach of this study is explained and
two research questions of interest are presented.
2.1 Introduction to ISO 9000
As the research for this study was undertaken before the publication of the current
version of the quaIity standards (ISO 9000:2000). this discussion is focused on the
previous version (ISO 9000: 1994). However, an explanation of the major changes that
have been made in the 2000 version has been included. especially as these changes apply
to making registration in a vendor more valuable for a buyer.
What ISO 9000 is, and why it has gained rapid worldwide populanty is explained. This
is followed by an explanation of what registration to ISO 9000 involves and what it could
represent to a registered vendor's buyer. The awareness and popularity of ISO 9000 are
then illustrared fiom the growing number of fims adopting the quality standards
worldwide. A brief review of the significant features of the current version of ISO 9000
is included at the very end.
2. I -1 What is ISO 9000?
Of the approximately 13.000 standards published by the International Organization for
Standardization (ISO), the ISO 9000 quality system standards are the most popular
(International Organization for Standardization, 2001; 'ISO. ISO 9000. ISO 14000'.
1997). Unlike the majonty of the standards published by ISO, which are product
standards. the ISO 9000 quality standards pertain to an organization's processes. those
that affect quality. The ISO 9000 quality standards' focus is managing the requirements
set by the customer. thereby ensuring consistency in the products and service from a
registered firm.
The ISO organization's global survey on ISO 9000 registrations reported 343.643
registered cornpanies from 150 countries by the end of Decernber 1999 (-The ISO Survey
of ISO 9000 -2, 2000)'. As an adopted quality standard. ISO 9000-s worldwide presence
remains unmatched. A major reason for ISO 9000's worldwide success is its
applicability across industries. Additionally, the fact that the ISO 9000 registration c m
be advertised is appealing to fimis and is one reason for its adoption. More details about
this foilow.
At the time of their introduction, the ISO 9000 standards were considered important for
industries with products 'for which there (ivere) snjefy and linbilip issires or which
i-equire(d) exucr rneusurements or calibrafion' (Goodman, 1998:np). Today, ISO 9000's
need and demand have surpassed those specific industries and they are equally favored
by organizations in any product or service industry.
I Latest figures from the ISO survey including 2000 data had not been released as of July 1.200 1. 10
'... (H)aving adequate quulity ussztrunce systems is now a necessity in a h o s f any indzistrial enterprise or service business. According to the QuaZity Systems Update. pztblished by McGrav Hill Companies. rhere are ISO 9000 registered cornpanies fOr neurly every four-digit SIC code' (Goodman, 1998: np).
Bergman ( 1994) writes that 'r-egardless of the product S finul destinarion. suppliers are
becorning registered in order to irnpr-ove their Company S qztaiir): profitcrh ility a~ J
ztltirnately, to enhance customer satisfaction' (Bergman. 1994568). Their acceptance is
encouraged by the fact that the standards do not imply a 'uniformity in the strztcttwe uj'
quality management systems or. uniformis of docztrnenration,' and allow for the
differences that exist fiom organization to organization ('Quality Management Systems-
Requirements.. . '. 2000:np).
A boost to their worldwide implementation is the support the ISO 9000 standards have
received from the developed nations. This support can partly be explained by the fact
that. although ISO 9000 registration is a voluntary initiative on the part of an
organization, it has also been used by govemments to create technical regulations
(Wilson. 1999). For example, the United States adopted them 'wordf ir tvorri us the
ANSI/ASQC Q90 Series' in 1987 (Jedd, 199359). Also, the European Community
'adopted the i S 0 9000 series us its common set of yrrulity systern stunriards' in 1989
(Marash & Marquardt, 1994:27). One of the ways this support has benefited registered
firms is through a reduction in the need for customer audits. According to Goodman
( 1 998), the ' U S und foreign gavernrnents huve b e p n requiring interna1 arrdits or other
forms of checking szrppliers ' quuliiy assurance systems, and ISO 9000 registrut iuns
uszrally meei rhis requirernent' (Goodman, 1998:np). A second. more significant
outcorne of the backing ISO 9000 has received from the world's leading nations comes in
the form of cornpetitive advantage to the registered firm. For example. European and
Amencan firrns have been reported to grant 'preferred vendor- sratm to supplirrs
complying wiih the sfcrndmd (Jedd, 1993 :4 1 ).
For developing countries especially, ISO 9000 has been considered essential for survival
('ISO: Compatible technology worldwide'. 1994). The ISO organization believes that a
quality system infrastructure. such as one provided by ISO 9000. -is essentiul for
irnproving productivity, market competitiveness and export capubility' in developing
countries ('ISO: Compatible technology worldwide', 19945).
The usefùlness of ISO 9000 registration to build a firm7s 'image' intemationally and to
enable the firm to 'stand out fiom the cornpetition' has been proclaimed by quality
experts ( 'BO 9000: Say What You Do.. .,' 1996). Accordingly. many firrns have chosen
ISO 9000 over other quality tools specifically for its visibility. for the -rcrngible proof of
a quality program that it provides ('ISO 9000: A significant advantage. ..,' 1996). Firms
registered to ISO 9000 c m advertise the registration on their letterhead. compaiiy logo.
etc. (Sateesh, 1992). Additionally. they c m list themselves in international directories of
registered firms and thus be more visible to buyers wishing to establish partnerships with
f ims with a quality mindset (Sateesh. 1992). Indeed, improvements to trade after
registration have been reported by f ims worldwide (Schellinck & Rosson. 200 1 : Sohrab.
1997).
3.1 .S What Registration Involves and Represents
The 1994 version of the ISO 9000 family comprises over 27 standards and 2 documents.
including the three quality assurance mode1 standards, 9001. 9002 and 9003. which a
Company can implement or to which i: can seek registration ('Selection and use of [SO
9000', 1998: ' What wi1I happen to the other standards.. . ', 200 1). For registration to ISO
9000, an organization needs to invest time and finances to painstakingly review and
document the processes that affect quality and aiso demonstrate to an auditor that ISO
9000 requirements have been met. The auditor must represent a third-pars,. that is. a
registration body or agency. For the audit to be successfu1. the organization must show
compliance to the 20 elements required for registration to ISO 900 1. for example. which
deal with the areas relating to design. development. production, installation and service.
Experts have also cautioned firms about what ISO 9000 registration does or does not
represent. Bergman (1 994) offers a definition of registration simply as 'a registered
supplier should give rhe market confidence ihaf their prodtcr or service will meet ihe
czrstomer 's agreed-upon requir-ements' (Bergman, 1 994:370). The - ISO certr@carion
does nor gzrarantee qzmlity, but rather consisfency of procedures', clarifies R N .
Shaughnessy, former chairman of the ISO 9000 committee (Goodman. 1 998:np). Buyers
who recognize what registration requires of a company's finances and its people. or even
just accept its reputation as being an 'internafional standard of excellence'. are expected
to respond favorably to ISO 9000 in a potential vendor ('Attitudes of "Captains of
Industry". . . ', 1996).
2.1.3 ISO 9000 Adoption by Regions and Countries
According to 1999 statistics, the world leader in the number of ISO 9000 registrations is
Europe (including U.K), with a little more than half of the total number of registrations
worldwide (table 1). The Far East and North America foliow modestly at 16.5% and
13
13.1%. respectively ('The ISO Survey of ISO 9000 and ISO 14000 Certificates-Ninth
cycle.. . ', 2000). Canada's contribution to the North Amencan figure, as of July 200 1. is
at a respectable 23% (table 2). It has been reported that the province of Ontario has more
ISO 9000 registrations than any state in the U.S.A (Performance Management Network
Inc. Report. 1999).
Table 1. Share of ISO 9000 Registrations by Region (%)'
Table 2. Breakdown of ISO 9000 Registrations within North ~ m e r i c a '
Europe Far East North America AustralidNew Zealand Afi- idWest Asia Central & S. America
' ~ a t a j r o m 'The /SO ~ & e y oflSO 9000 m d /SO 1 -#O00 CertIficates-Ninth qcIc ... . 7 0 0 0 ' ~ a t a from WorldPrejërred corn, as of Jnly 3, 200 1.
' ~ u f e s t mailable dafa from 'The /SO Szrnvy of ISO 9000 and f S 0 1 -/O00 Cert~$ca[es-Ninui q d e . .. ',
1995 72.7 7.3 8.2 8.3 2.7 1 .O
Canada Mexico US.A North America World
An examination of the proportion of worldwide registrations by indztsîriy in 1999. shows
1.3% for the 'textiles & textile products' sector, and 0.8% for the 'leather & leather
products' sector (table 3). The percentage of registrations by f i m s within the -wholesale
& retail trade' sector is higher at 5%, but includes sr wider range of products, from motor
vehicles to persona1 goods.
1996 67.6 11.3 10.3 5.8 3 -8 1.1
, '2000 dura from ISO no[ mailable. I
1995' 1397 2 15 8762 10374
127339
1996' 3955 3 12
12613 16980
16270 1
1999 55.4 16.5 13.1 7.4 5.0 2.6
1997 64 -3 13.4 1 1.3 5.8 3.9 1.3
1998 6 1.3 14.0 13.3 6.2 4.5 '
2-0
1 9971 5852 71 I
1858 1 25 144
223299
1998' 7585 978
24987 33550
37 1847
1999' 10556 1556
33054 45 166
343643
July 200 1' 12455 2285
39867 54607
Table 3. ISO 9000 Registration Statistics by Industrial Sectors ~ o r l d w i d e '
-- --
~ndustrial s z t o r i998 1999 A~riculture. fishino 610 678 Mining & quanying
Food products, beverages
Leather & leather products 23 13 2093 Wood & wood ~roducts 1967
and tobacco Textiles & textile ~roducts
1 Manufacture ofcoke & 1 1009 1 1669
1052 7347
179 1 8746
2835
I I
Chem icals. chernical 1 11803 1 12615
3673
refined petroleum products Nuclear fuel 279
products & fibres Phannaceuticals
220
Rubber and plastic products Non-metallic mineral
1 160
products Concrete, cernent. lime.
1105 6277 2328
plaster, etc. Basic metal & fabricated 1 28885
13575 3.57 1
4998
28972 metal products
Machinery & equipment Electrical & optical
( 'Latest mailable data-fiom 'The 1.90 Srrrvqv of /SO 9
7107
equipment Shipbuilding
TOTAL
Industrial sector 1 1998 1 1999 1
20275 36653
19827 40035
398
Aerospace Other transoort e ~ u i ~ m e n t
3670
Manufacturing not elsewhere classified
Recycl ing Electricitv S U D D ~ Y
I Construction 1 19768 1 25273
1052 3040
Gas supply Water supply
Whotesale & retail trade: repairs of motor vehicles. motorcycles & personal &
household goods Hotels & restaurants
413 1 7656
2106
1001 860
Transport, storage & 1 1 1 7 3 8 1 m 6 6 1 communication
4844
1765 932
3 90 505
Financial intermediation. 1 4690 1 3218 1
5% 799
real estace, rentat
Other services 1 13088 1 12150 l Information technology
Engineerinrr services 5826 8064
I I
6706 920 1
Public administration
Education
00 and 1SO 14000 Certifcares-Ninth q d e ... '. 1000.
689 1 7086
The trend for ISO 9000 registrations in North America follows worldwide figures for the
above industries. For exarnple. a search within the WorldPreferred.com hc.' database
for registered firms dealing with 'apparel and clothing' and 'textiles and fabric' showed
their proportion to be only 0.67% (www.worldpreferred.com. July. 200 1 ). Interestingly.
1833
287 1 2005
I
- -- -
' A Toronto-based organization that maintains a database of ISO 9000 registered firrns ( ~ ~ ~ . w ~ r l d p r e f e r r e d . c o r n ) ~
15
3 996
Health & social work Other social services
1250 25 13
the proportion of registered firms in the manufacturing sector in North Amex-ica (across
industries) was much higher than the proportion of registered firms in the wholesale and
retail sectors combined (15% and 2%. respectively) (ibid). Data for registered fims
dealing with apparel or textiles within the manufacturing or wholesale/retail sectors were
not available. The information that is available indicates that the proportion of registered
firms within the apparel or textile sectors in North America is small compared to other
industrial sectors. It also indicates that it is likely that more registered fims dealing with
apparel or textiles would be from the manufacturing sector as compared to the number
from the retail or wholesale sectors.
2, Z -4 Differences between ISO 9000:2000 and ISO 9000: 1994
The ISO 9000 standards are subject to review every five years. and ISO 9000:2000 is the
latest version. published on December 1 51h. 2000. Organizations registered to the 1994
version are required to gradually upgrade to the more recent revision as agreed under the
-Communique on transition policy' that was decided by the International Accreditation
Forum (IAF). the Cornmittee for Conformity Assessrnent (ISO-CASCO) and the
Technical Comrnittee for ISO 9000 (ISO-TC 176) ('What will happen to the 1994
versions...?? 2001). According to this agreement. registered organizations have been
allowed a fransifion period of three years to adopt ISO 90002000 from the date of its
publication.
Some of the major differences between the ISO 9000: 1994 and ISO 9000:2000 versions
are as follows.
Firstly. ISO 9000:2000 is a quality management system. Quality initiatives in an
organization can be said to have generally evolved from quality control to quality
assurance and then to quality management. At the quality control level. the responsibility
for controlling and monitoring quality in an organization rested on one department alone.
that which was involved in the inspection and testing of an outgoing product. The quality
assurance Ievel stretched this responsibility for quality to the entire organization, so that
al1 processes that affect quality are controlled and monitored. A quality management
system level goes further to include continuous improvement in those processes that
affect quality. Whereas under ISO 9000:1994. firms could choose to register to the ISO
9001, ISO 9002 or ISO 9003 quality asszirunce system models, ISO 9000:2000 offers
only one model. the ISO 9001 quality rnanugemeni system for registration.
Secondly, an important improvement in the 2000 version of ISO 9000 is said to be
management's required role of 'monitoring and reviewing custorner sarisfaction und
dissafisf~~ction'. which ensures that the decisions with regards to quality are now made at
a strategic level (Lamprecht. 1999:48).
Thirdly, the 2000 version foilows the 'process approach'. ISO 9000:2000 emphasizes the
importance of understanding how different processes in an organization are linked and
how one contributes to the other. The methodology followed is tenned the 'process
approach'; it requires that the main processes in a work system be identified. controlled
and improved. A 'process' itself has been defined as '(a)n acfiviîy using resorrrces. and
managed in or-der fo enable the transformation of inpzifs info oufpzifs' ('Quality
Management Systerns-Requirements', 2000:np). Customers' requirements contribute to
the 'inputs' of an organization's processes. As the output of one process foms the input
17
to the next, the entire work system c m thus stnve to meet the requirernents set by the
customer and, in so doing, becorne hndarnentally customer driven.
Overall, the 2000 version of ISO 9000 aims for greater management involvement and
control of processes. as well as continuous improvement of al1 aspects of the system that
affect quality. As such, organizations registered to the ISO 9000 standards sl~ould
become customer driven and of value to buyers seeking long-tenn relationships with
vendors. According to Zuckerman (2000), '(p)urchasing rnnnugers ... shortld find ~ h e
newly t-evised ISO 9000 standard fur more suited ro theii- opemtions rhan the eurliei-
standard edition'. simpIy because "'(c,usforner reyuiremenfs dritv the inpur und
czistomer satisfirction drives rhe oulput " ' (Zuckerman, 2000: np).
The next sub-section reviews existing research that provides verification of ISO 9000's
impact on business, and also examines ISO 9000's importance for buyers. and the ways it
can enter into their vendor selection processes.
2.2 Existing Literature
2.2. i ES0 9000's Impact on Business
A search of the literature on ISO 9000 showed that little attention has been paid to
determining what role the quaIity standards have in matters of trade. Although a number
of research studies are available to veri& ISO 9000 registration's effect on the
organizational processes of a registered firm, few have attempted to establish its reported
external benefits, in particular, those with regards to increased business. Firms that
register to one of the ISO 9000 quality system standards undergo a rigorous evaluation
and documentation of al1 processes to be included in registration. During the process of
18
implementation. processes that are redundant may be identified and removed. resulting in
an improvernent in overall efficiency and productivity. This m2y or may not be
associated with an increase in customer satisfaction. Mann and Kehoe (1994) found ISO
9000 to be highly ranked arnong the quaIity activities that were beneficial to fïrms. Rao
ei al. (1997) furthet verified that ISO 9000 registered fims exhibited higher levels of
quality management practices (quality leadership. information and analysis. strategic
quality planning. hurnan resource development. quality assurance. supplier relationships.
customer orientation) and quality results (levels of scrap and rework, customer
complaints, market share. cornpetitive position. etc.). compared to firms that were
planning to get registered or were not registered. In their review of the ISO 9000:2000
drafi, quality experts have also indicated that implementation can pave the way for more
advanced quality initiatives such as Total Quality Management (Winco. 1 997; Laszlo.
2000).
Verification of the trade-related benefits linked with ISO 9000 registration has been
limited, and may be obtained from either the more common fact-finding surveys of firms.
or the mere handfùl of research-based studies. An examination of ten such fact-finding
surveys was undertaken here'. These surveys typically aimed to determine firrns' reasons
for registering and the benefits experienced after registration. Some sunreys focused on a
particular group of f ims such as representatives of a specific industry or cIients of a
specific registrar. Many targeted the respondents from firrns already registered to an ISO
9000 standard.
" List of references has been provided in Appendix A. 19
The trade-relateci benefits reported to accrue from registration were found to be included
arnong the marketing and competitive advantages reported by firms (table 4). For
example, firms were found to have reportedly sought ISO 9000 registration for its
-marketing benejits' and to seek 'competiriveness'. and also claimed to have experienced
'increased image of producl', 'increased chances to rvin business'. and 'increused
exporrs' afier registration. Such benefits are reportedly experienced worldwide. as firms
in the s w e y s represented countries such as .4ustralia, Canada China. Finland. Japan.
Mexico. New Zealand. Northem Ireland. Trinidad. U-K, the U.S.A and several in the
Asia-Pacific region.
Certain studies have empirically verified the marketing and competitive advantages
attributed to registration, even if those benefits were found to be secondary to the internai
benefits of profitability and process irnprovement (Buttle, 1997; Adanur and Allen,
1995). Others have found that opinions about ISO 9000's marketing value were shared by
both registered und non-registered firrns (Schellinck & Rosson, 200 1).
In addition to firms' self-reported claims of improvements to business after registration.
empirical investigations of how ISO 9000 registration actualIy affects business
oppominities are limited to a few. One such study was undertaken by Withers &
Ebrahimpour (2000). The authors interviewed 11 European firrns competing in the
international market to find out how they perceived ISO 9000 to have improved their
competitive edge. Firms were asked to rate the impact of registration along Garvin's
eight dimensions of product quality. The authors reported a positive impact of ISO 9000
on the quality dimensions of reliability, conformance, serviceability and perceived
quality, along which firms were competing.
20
Table 4. Reasons for Seeking ISO 9000 Registration & the Reported Benefits Following Registration
Intemal Intemal processes
External Customer-related
Marketing
1 1 Increased exports"
Reasons for registering
Irnproved level of prodtict quality"' Increased efficiency and productivity "'
Cornpetitive advantage
1 [ Increased chances to win business'
Benefits experienced
Better management control" Reduced costs5 Waste reduction'
continuou; irnprovement ' Organizational self-discipline
Customer d e ~ a n d " ~ Reduce cornplaints5 Customer satisfaction7 Valuable marketing tooi7 Marketing benefits5-'
1 1 Higher rating with customers
Improved effïciency5 lncrease in ernployee pride'
Improved custorner service-' Better customer attitudes5 Customer retention' Promotional too13 Increased image of product"
Market advantases-' ~ompeti t iveness~'~
I 1 generate more business'.' ' /SO 9000 NEWS. 4, 1995 ('NZ registrar., .')
International standard of excellence' Better competitive edgeJ-'
' /SO 9009 NEWS. 4, 1995 (Eddy ) ' fSO 9000 NEWS, 6 , 1996 ('ISO 9000-Does it work.. .') ' ISO 9000 NEWS, 6, 19% (Morita)
/SO 9000 NEIVS. 6. 1996 (.Attitudes ofTaptains ...') /SO 9000 N E W , 4, 1997 ' /SO 9000 NEWS. 2 , 1 998
In contrast to the evidence of ISO 9000's influence on business. the literature on ISO
9000 also provides examples of cases where ISO 9000 registration has nof met the trade-
related expectations of firms, or the requirements of their buyers. An exarnple of the
former is a British study conducted by Market and Opinion Research International
(MORI). which found a difference in what senior business executives believed to be the
stimulus for seeking registration to ISO 9000. and what they noted as the benefits after
registration.
' O h e most signzficmt contributions expected of lSO 9000 certification were reluted to its perceived market-place eflects - increased chances of t t ~ inning bzïsiness. bolsr et-ing czïstomer attiludes and honing the cornpetitive edge ... ' ('Aititudes of Yaptains of Industry". . . ', 1996: 13).
'" ... Of the rop ten confributions made by ISO 9000, three of the top pite relate to the woy the business operates, rather- than hou: i f is seen in the ozclside rvorld" ('Attitudes of "Captains of Industry". . . ', 1996: 14).
Also. buyers within certain industries were found to be caretiil about how willing they
were to rely on ISO 9000 registration in their vendors. For example. although MRO
(maintenance. repair and operation) buyers in general were found to recognize ISO 9000
registration as an initiative by a vendor towards improving quality, some of them also
believed that registration does not mean that the vendor is 'capable of'meeting thrir
expectations' (Avery, 1997:np). ISO 9000 registration did hold some weight. however.
in that provided 'o,het- selection criteria (tvere) epa l , MRO bzyers (rvozdd) selecr the
certified supplia ' (ibid). A second example pertains to buyers within the specific metal
products industry. In this case. buyers justified the lower importance they were giving to
ISO 9000 registration, in saying that -metais qzrality eforts have to he continzrally
rneaszwed by the supplier and by the buyer, and not jzl'it uccepted becazcse sornebody has
an ISO raring' (Stundza, 1 998 :np).
The above exarnples suggest that buyers may be unwilling to rely solely on a vendor's
registration as a testimony to the quality of products and services that that vendor will
provide. These buyers may prefer to have other. more important criteria fulfi1Ied before
considering a vendor's registration in selection decisions. Furthemore. researchers are
finding that international trade is more often 'blcyer-coordinuted importing' rather than
'producer-initiated exporting' (Liang & Parkhe, 1997:495). Therefore. findings about
buyers' valuing ISO 9000 in a vendor would also be a more reliable indication of its
potential to enhance business. Since previous research aiming to establish the trade-
related benefits from ISO 9000 has focused on firms alone, and results of these studies
have been inconclusive. an investigation of how buyers within a specific industry respond
to ISO 9000 in a vendor is warranted.
2.2.2 ISO 9000 and Buyers
How buyers perceive ISO 9000 registration in a vendor is a subject lacking adequate
coverage in the academic literature. A related search revealed only two empirical studies
that exarnined individuals' (other than those representing registered firms) opinions on
ISO 9000. One study was conducted in Finland and questioned customers on quality
improvements that were noted afier the firms that were supplying to thern had registered
to ISO 9000 ('Customers see improved quality.. .', 1996). Firms targeted were expected
to have had the registration for at least one year pnor to the date of the study. The study
reported that almost 90% of the firms 'were judged by their czntorners to haiv show?
sfatis~ically signifcanr4 Nnprovernenrs in quality since ISO 9000 ce>?$crr!iun'
('Customers see improved quality.. .', lW6:3).
However. custorners in this case were the clients of registered firms. Their role as buyers
is not confirmed. Also. in being clients of the registered fims. the customers' responses
are likely biased.
- - -..
'' Alpha values not available.
A second related study was conducted at the University of the West Indies (Pacheco,
1997). It examined the use of ISO 9000 registration as an information cue along with the
country-of-origin (COO) cue in buyers' product valuations and preference formations.
Trinidadian buyers' responses toward products from registered domestic fims were
compared with their responses toward products imported from non-registered f ims in the
U.S.A. The researcher investigated household buyers' responses toward praducts from
ISO 9000 registered companies as opposed to indus!rial buyers' responses toward
registered vendors, the interest of this study. However. Pacheco's (1997) study is the
only one found in the literature to have empirically investigated the impact of the quality
standards in purchase situations. Findings from his study are discussed later on in this
chapter.
No study has previously exarnined ISO 9000's importance to industrial buyers. although
claims of its importance to these buyers have been made in articles by ISO 9000
proponents. and also suggested in research studies on supplier certification. For example.
a review of the industrial marketing literature related to purchasing fînds that one of the
major challenges of sourcing for industrial buyers is the uncertainty in what to expect
from the vendor, especially an overseas vendor (Fiorito, 1990: Liang & Parkhe. 1997;
Park et al., 1997). In response, Ferguson (1996) reported that a vendor's compIiance to
the requirements set out by the ISO 9000 quality system standards. gives buyers
confidence and assurance that the quality in the products and services from that vendor
will at least be consistent. Firms themselves report more management control. waste
reduction and improved efficiency among the interna1 benefits experienced afier
registration (table 4). These improvements increase the chances of obtaining better
24
quality products and services consistently from the registered firrns as compared to their
non-registered counterparts. Thus. soms of the uncertainty in overseas sourcing c m be
effectively reduced by ISO 9000 registration.
Larson & Kulchitsky (1998) found it advantageous for buyers to work with single source
and 'certified' slippliers as they could obtain higher quality along with lower costs. In
their study, certification was buyer initiated, involving a thorough examination of a
vendor's performance. According to the researchers, ISO 9000 registration 'couid he ci
vuluable i n d ~ r i u l marketing management foui for the supplier whose cusforners c m
intet-esred in certzjicafion' (Larson & Kulchitsky, 1998:80).
Goodman (1998) suggests that individuals from organizations that are themselves
following a quality program should appreciate and welcome a similar initiative in their
vendor's organization.
'Purchasers themselves ma). be ISO 9000 registered. Tu keep rhat regstrntion they mils! ensure r h t companies N7 their supply chuin upply an udeqrrate management qzicdiry assurance sysfem as well - as evidenced by ISO 9000 registrution ' (Goodman. 1998:np).
Although justifications for why ISO 9000 should be important to industrial buyers have
been given by ISO 9000 proponents there is M e supporting data available. Moreover.
whether buyers' positive beliefs about ISO 9000's importance or the use of quality
programs in the firm the buyer represents mean that buyers would be drawn toward the
registered vendor in vendor selection is unconfirmed. Yet. such an examination is
necessary to understand whether a vendor's registration to ISO 9000 can offer business
advantages. How ISO 9000 codd play a role in buyers' vendor selection processes is
explained next.
2.2.3 ISO 9000 and Buyers' Vendor Selection Processes
Industnal marketing literature has labeled vendor selection for buyers as the most
important function, the 'major activiv' and the ' critical role' (Dempsey. 1 978 : Patton III.
1996). Weber et al., (1 99 1 ) w-rite that in
' t o d q 's cornpetitive environment it is impossible to successfully proditce lotv cost, high quality prodzrcts withoirf satisfacrory vendors. Thtcs one of the most important purchasing decisions is the seleciion and maintenance of a comptent gioup of sztppliers ' (Weber et al., 1991 :2).
Easing vendor selection for buyers is, in fact. one of the reported benefits of ISO 9000
registration (Bergman, 1994: Jedd. 1993). Two possible methods by which ISO 9000 can
enter buyers' vendor selection are explained below.
3.2.3.a. ISO 9000 as an Information Cue
Liang and Parkhe explain that, compared to a domestic vendor search, a
'(s)ystemntic vendor seorch on a global scale is @en impossible or prohibitiivly expensive and cognitively ovenvhelming. Buyers are more likely to adopt a cogniiiwly less demanding, noncompensatory approach by tuking short-crrts in their. seurcl? und evalztation effort' (Liang & Parkhe, 1997:s 1 1 ).
These 'short-cuts' may be in the form of stereotyping, thus simplifying the various
factors that an industriaI buyer has to consider in choosing an overseas vendor (Park et
ul., 1997; Pacheco, 1997).
Pacheco (1997) examined ISO 9000's role as stereotypical information, by measuring its
influence on household buyers' attitudes, perceived quality and purchase intentions
toward products fkom registered firrns. The purpose of his study was to determine if 'ISO
9000 certification as an information cue independently, and together with the 'country-
of-origin' (COO) cue, influenced buyers' responses toward products from registered
26
firms in a less developed country (Pacheco, 1997). Confirmation of such a role of ISO
9000 would then indicate its usefulness as a 'strategic tool* to gain competitiveness
(Pacheco. 1997). He found a significant influence of ISO 9000 on buyers' -attitudes
toward the product', (pC.05) and a non-significant. yet. positive and directional influence
of ISO 9000 on their 'perceived overall quality' (p<.06) and 'purchase intentions'
An important observation made by Pacheco (1997) was that the use of the quality
standards as an information cue possibly depends on the buyers' 'familiaritf with them.
suggesting the need to measure the same in related ISO 9000 studies. It is Likely that,
because ISO 9000 is a quality system for a firm and not the firm's products. it may have a
more pronounced influence on industrial buyers involved in vendor seIection. than on
household buyers involved in product selection.
Consequently, registration has been recommended by proponents of ISO 9000 for firrns.
including those in the apparel industry. to improve their image as well as their
organizationaI processes.
'In this "Ouyer's market" environment, srrppliem have io sfund out from their cornpetition. ISO 9000. un internafional srandwd indicating t h ~ r u compuny hus on effecfive q u n l i ~ systern und hus dernonstrated irs conzrnitment fo providing a qucility product or- service, alZori:s them to do that' ('ISO 9000: Say What You Do.. .'. 1996: 1 7).
Ferguson (1996) finds that ISO 9000 registration has already gained popularity with
buyers in vendor selection.
' h s t us retail btïyers o$en use brunci names and prod~rct recogniiion to redtcce the nurnber of competing prodzic to a select few before making a final selection, indistriul buyers open lise the Iist of ISO 9000 registered suppliers as their only source .fur iden fzfiing po ten~inl suppliers' (Ferguson, 1 996: 309).
2.2.3.b. ISO 9000 as a Vendor Criterion
Vendor selection studies in the industrial marketing literature have found that buyers
consider certain criteria of importance to evaluate vendors. They have also shown that
the criteria of importance to buyers appear to Vary by product being purchased (Dickson.
1966: Dempsey. 1978), by the category of the firm in question (Wagner el 01.. 1989). and
also by the presence of quality programs in the firm (Weber et al., 1990). For exarnple.
Dempsey (1978) confirmed a difference in the vendor attributes of importance to buyers
in the electronics manufacturing versus those in the electric utilities industries. Also,
Wagner et al. (1989) noted variations in the scope of the responsibilities of buyers from
different categories of firms, and expected different criteria to be o f importance to them.
According to these researchers, industrial buyers in general were responsible for
'controlling costs', while retail buyers were also responsible for 'generating revenue'.
They found specific vendor criteria such as ' rnarkup', 'merchandise fashionability
(fashion vs basic)' and 'selling history' to be among those evaluated by retail buyers
dealing with apparel. accessories and home products. Lastly. Weber ef al. (199 1 )
investigated whether new manufacturing strategies and quality practices such as Just-In-
Time (JIT) 'impose($) a reordering of criteria by which vendors are sekc ted . The
authors found -quality' and 'reliability' to be discussed commonly as important vendor
criteria in the articles relating to JIT. The major criteria of importance found in these
studies are shown in table 5.
The location of a vendor is also a determinant of the criteria of importance in evaluations.
Bossert (1998) advocates an initial investigation of overseas vendors to learn about the
'backgroztnd and slability o f the Company and the counfq~', followed by a supplier visit
38
and audit. Economic stability in the country of the overseas vendor. the vendor's
financial reputation, and referrals from trade and quality associations are some criteria he
suggests investigating.
Table 5. Vendor Selection Criteria of Importance
Net price
Vendor selection criteria
Frequency of occurrence in 74 articles reviewed by Weber et al. ( 1990). 80%
1 1 'considerable' f of 13 articles Delivery
irnoortance. I
Importance of criteria according to Dickson's survey of buyers ( 1 966). 'Extreme' to 'considerable'
'Extreme' to ( Mentioned in 13
Criteria found in JIT articles (1 3 of 74) reviewed by Weber et al. ( 1990). Mentioned in 8 of 13 articles
59%
'considerable- 1 of 13 articles
importance. 'Extreme' to Mentioned in 13
Production facilities & capaci ty Geographic
ca~abilitv 1 1 irnuortance' 1 of 13 articles
3 1%
location Technical
Attitudes; Management & Organization; Packaging; Operational Controls: & Repair
22%
'Average importance'
importance- 'Considerable importance.'
70%
Mentioned in 1-4 of 13 articles
Mentioned in 7 of 13 articles
' Average
Service Other
Mentioned in 7 importance' ' Considerable
Vendor select ion criteria used by retail buyers as reported by Wagner et al. ( 1989). 'Mark up' used frequently.
of 13 articles Mentioned in 4
Used frequentty.
Secondary consideration.
Fashionability received secondary consideration. Reputation: Service: & Country-of-origin received little consideration.
Both quality programs in general and ISO 9000 in particular. have been suggested as
criteria for domestic and overseas vendor evaluations. Goodman (1998) reports that, to
'muke their supply chain more diable, purchasers are rrsing cornpliance M' ith recognixd 29
standards as one means of determining a supplier's legitimacy or a pr-odzrcf 's qitulity'
(Goodman. 1998: np). Quality experts such as Bossert (1998) concur.
' ... (T)he commonly accepted standard for qtrality assessrnent is ISO 9000. Whrn evaluaring potenrial suppliers, rhat is a good place ro stm-t. Does rhr szipplier. have a current regisrrarion? /f the supplier is no! registered to ISO 9000, is ihere a sirnilai- standard rhar rhe supplier is using? Annvering these questions helps detemine it!hether* the supplier. is using a systematic approach fo i fs qzrnliiy efforrs ' (Bossert. l998:3 1 ).
The implication here is that a vendor's registration to ISO 9000 would perhaps replace
the need for a buyer to evaluate certain other cnteria. For exarnple. a buyer who notes
that a vendor is registered to ISO 9000 may be Iess concerned about criteria relating to
quality or operational controls.
2.2.4 Research Approach and Research Ouestions
For ISO 9000 to be used as a criterion and for it to have an influence as an information
cue in vendor selection, certain requirements seem implicit. Firstly. buyers should have
basic knowledge of the quality standards in order eo understand the areas in an
organization that are affected by implementation. Secondly. positive beliefs about how
implementation c m affect a vendor's products and services seem necessary. Thirdly. the
use of a quality program by the firm the buyer represents that requires or requests
registration in a vendor should also influence how ISO 9000 enters into a buyer's vendor
selection process.
Al1 in all, the need for data on the advantages from registration in general has been
voiced by practitioners and quality gurus alike (O'Brien. 1995; 'Juran Urges Research'.
1999). Past research on ISO 9000 has led to identification of the trade-related benefits
attributed to ISO 9000 by registered firms ('Attitudes of "Captains o f Tndustry".. ., 1996:
30
Sohrab. 1996; Schellinck & Rosson. 2001). Other studies have shown how ISO 9000 can
offer competitive advantages for registered firrns (Withers & Ebrahimpour. 2000:
'Customers see improved quality.. .'. 1996). Registered firms have been the focus of the
majority of these past investigations on ISO 9000.
This study aims to extend existing research on ISO 9000 that has examined its potential
trade-reIated advantages, by providing buyers' responses to ISO 9000 in their selection
decisions. In this study, ISO 9000's potential influence on buyers in vendor selection
wouid be determined according to whether it is used as a criterion by buyers in vendor
evaluations, and also, by whether its presence as an information cue influences buyers'
attitudes and selection intentions toward registered vendors. The success of registration
in this regard is expected to Vary according to certain factors. Three such factors being
examined include 1) the buyersT knowledge of ISO 9000. 2) their beliefs about the
importance of ISO 9000 for leading to certain benefits, and 3) the use of quality programs
by the firrns the buyers represent.
Background research of ISO 9000's importance to Canadian apparel firrns the context of
this study. and to Canadian apparel buyers specificaily. commences this investigation.
3. BACKGROUND TO THE RESEARCH
This section reports the findings from a background investigation of ISO 9000's
importance in the Canadian apparel sector. This was a necessary step, as no study has
previously determined ISO 9000's role in this sector. The objectives of this investigation
and the two main sources of information are first explained. Before reporting the
findings relating to ISO 9000. buyers from the three major categories of firms within the
apparel sector. Le. the manufacturers, retailers and wholesalers are introduced. Statistics
on apparel and fabric imports are then provided to show how much is imported, by whom
it is imponed, and fiom where it cornes. Why ISO 9000 should be of interest to apparei
firms and to the buyers who are employed by them is explained next. Following that.
findings on ISO 9000 are presented within two separate sub-sections entitled. 'Quality
Programs' and 'Vendor Selection'. Lastly. a sumrnary of these findings as they address
the research questions of the study is presented and the remaining questions for a
subsequent study highlighted.
3.1 Objectives of /Sources for the Background Investigation
The objectives of this background investigation were to address the two research
questions that were raised in the literature review. The objective relating to the first
research question was to detemine whether ISO 9000 is a consideration in vendor
evaluation and selection. For this purpose, it was necessary to find out what vendor
criteria of importance were associated with apparel firms and whether ISO 9000 was one
such criterion. Also needed were buyers' reactions to a vendor's registration in a vendor
choice situation. The objective relating to the second research question was to detennine 32
the use of 1SO 9000 or other quality programs as well as the level of knowledge of ISO
9000 and the types of benefits associated with these quality standards.
A pnmary source of information on ISO 9000's importance in the Canadian apparel
sector was three one-on-one semi-structured interviews with experts in the Canadian
apparel, textile, and retail industries. undertaken between August 4th and 1 1'" 1999. One
person interviewed was Mr. Eric Barry. past President of the Canadian Textiles Institute.
with 20 years expenence with this association. A second was Mr. Jeff Otis. President of
the Canadian Apparel Federation since 1997 and also President of Grand National
Apparel, a leading Canadian menswear apparel manufacturer. The third person
interviewed was Mr. Arvind Patel. Manager of Laboratory Services. Kenmore Services
Department. Sears Canada. who stated that he had been with this retailer from the time it
was established in Canada. Each of the three interviews was conducted by teiephone and
Iasted an average of 40 minutes.
Articles published in Canadian ~ ~ ~ a r e l ' magazine between 199 1 and 2000 served as the
secondary source of information on ISO 9000's importance within the apparel sector.
Although this magazine was a publication of the Canadian apparel industry. that is.
representing the apparel manufacturers in Canada, it was expected to reflect the concerns
of apparei firms in general and also include the opinions of retailers and wholesalers
relating to the apparel business.
Prior to 1997, this publication was called the 'Canadian Apparel hfantrjacfurer ' 33
3.2 Canadian Apparel Firms
AppareI buyers in Canada represent one of three major apparel firm categories. each of
which is involved in importing apparel and apparel-related products.
One category is the apparel manufacturers, which sources apparel and fabric
dornestically or overseas to supplement production and which suppIy either to the '
retailers, or wholesalers, or export. According to 1994 data, Canada's apparel
manufacturing industry contributed 2.2 percent of total manufacturing gross domestic
product. and from 1995 data, was valued at Cdn $8.5 billion ('The Canadian AppareI
Industry', 2999; 'Key Points.. .', 1997). The majority (75%) of the 2000 firms in this
industry are small. with less than 50 employees ('Key Points.. . ', 1997). Products of the
apparel manufacturing industry are produced throughout Canada. The province of
Quebec, however. accounts for the majority of the apparel shipments (63%). and also
houses a majority of the apparel firms (67%) ('Highlights - Apparel Sector
Cornpetitiveness Frarnework'. 1997). Ontario, Manitoba and British Columbia are the
other major locations for apparel production.
The second apparel firm category is the retailers (Cmadian and non-Canadian) which
source apparel from the manufacturers. wholesalers or importers located within Canada.
or source directly from overseas. According to 2000 statistics, the Canadian apparel
retail sales market was estimated at Cdn $18.4 billion ('NAFTA Apparel 2000'. 2000).
According to an Industry Canada report,
'(l)he major refail channels of distribution are department stores szrch as The Buy or Eaton's. speciulg~ stores such as Fairweather's or S L E ~ Shier-. and discozrnt stores such rrs Biwny. Department stores account for abour 25 percent of retail saks. speciuiry stores
far 44 percenl. discozrnt stores for 27 percent and other channels (incfuding mail-order catalogues. w~arehome stores and non-traditional otrtlefs such as groceiy stores) abolrr 9 percent.. . ' ('Growth Prospects for the Industry ' .2000:np)
In Canada. about one third of apparef sales is attributed to four major retailers. two of
which include the Canadian-owed department stores. Hudson's Bay Company and Sears
Canada ('Implications for the Canadian Apparel Industry'. 1997). Other major retailers
include the discount stores? Zellers (owned by the Canadian Hudson's Bay Company)
and Wal-Mart (Amencan owned) ('NAFTA Apparel2000'. 2000).
The third apparel firm category includes the intemediaries. that is. the wholesalers and
importers. referred to here as just the wholesalers. which are atso involved in the
importing of apparel and fabric. Accordirig to Industry Canada information. the
wholesalers fùnction either as 'wholesale rnerchants', involved in purchasing products for
resale to firms such as the retailers, or as 'agents and brokers.' who buy and sel1 products
on a commission basis ('The Wholesale Trade Industry.. .'. 2001). According to 2000
statistics. sales value from the whotesale trade of 'apparel and dry goods' in Canada
comprised a small portion (1.6%) of the total sales value of the 1 1 wholesale trade groups
(Cdn $0.5 billion of Cdn $3 1.6 billion) (-Wholesale trade'. 3001).
3 -3.1 Ap~arei and Fabric Imports
Data on the proportion of imports indicates a significant amount of trade with overssas
vendors. According to 1990 statistics. 40% of aII apparel dollar retail sales were
attributed to imponed products (Eggertson. 199 1). The proportion of irnpoi-ts within the
apparel manufacturing industry in 1997. the last year for which such data is available.
was 46% of the Apparent Canadian Market (domestic shipments plus imports) ( T h e
Clothing Industry (SIC 24) Appare~t Canadian Market', 1998).
The 1991 statistics on apparel imports by category offirm show the wholesalers to be
responsible for the bulk of imports (52.3%), followed by the apparel manufacturers
(29.5%) and then the retailers (18.2%) ('Report on Apparent Markets.. .'. 1993).
According to 1987 data. the rnajority of the volume of fabric imports was shared by the
apparel manufacturers (30.4%) and the importers/wholesalers (43.3%) (-Textile and
Clothing Board.. . '. 1 989).
According to a Statistics Canada report. the 10 main sorlrcrs of apparel imports iiito
Canada by dollar value. in descending order. are China, U.S.A. Hong Kong. India. South
Korea, ltaly. Taiwan. Bangladesh and Thailand ('Canadian Trade by Industry-SIC Codes
(24)'. 200 1 ). The 1997 trade figures reveal that the dollar value of apparel imports froni
the low cost countries (70%) have been significantly greater than those fiom the
developed countries (30%) ('Clothing Industry (SIC 24) Imports'. 1 998). How-ever. there
is an increasing trend of imports being sourced from the developed countries. with their
proportion of total imports increasing from about 20% in 2988 to almost 30% in 1997
(ibid).
More than half of the apparel industry's textile inputs (fabric and yarn) are sourced
internationally. primarily fiom the United States (61% of the dollar value). with the
cornpetitively priced Law-end products coming mostly from the low cost countries
('Textile And Clothing Board.. .'. 1989: 'Canadim Trade by Industry-SIC Codes ( 18)'.
200 1 ).
3.3 Importance of ISO 9000 to the Canadian Apparel Firms
From the literature survey of the apparel sector, a few major concerns of apparel f i m s
becarne evident. This discussion is limited to a review of those concerns which ISO 9000
registration could help alleviate.
Rethinking their organizational strategies was found to be essential for Canadian apparel
firms today. The Canadian consumer is 'fùssier'. demanding better value in products and
services. and the mega-retailers that supply to them are more stringent in their
requirements from their vendors. increasingl y, it is the products sourced from oiversem
that are serving to meet the consumers' needs. More details about this foIlow.
Canadian consumers have been observed to be spending less and less time shopping and
demanding more and more value in the products and services they receive ('Implications
for the Canadian AppareI Industry', 1997; 'Growth Prospects for this 1ndustry'- 2000).
The firms that supply to the majority of these consumers are typically the giant retailers.
The new mega-retailers (both Canadian and foreign) are. however, a potential threat to
the domestic apparel firrns. Size offers these giant retailers the advantages of economy of
scale in sourcing globally and supplying across Canada. The competitively priced quality
products that the rnega-retailers flush into the market, and their strategies to develop and
work with a few major vendors. should be of concern to the apparel f ims in Canada.
Apparel firms are also faced with competition from products sourced abroad. which are
not only competitively priced, but also of reasonable quality. Additionally, a further
liberalization of irnport restraints is taking place, which affects the apparel sector as well.
A ten year phase-out (2995 to 2005) of tariffs under the General Agreement on Tariffs
and Trade's (GATT) decision is already underway ('The Canadian Apparel Industry'.
37
1999). The same time p e k d has been alloted for a complete elimination of the
quantitative restrictions on imports. as established at the Uruguay Round, under the
Agreement on Textiles and Clothing ('Implications for the Canadian Apparel Industy'.
1997).
For the average apparel firms, there is the need now. more than ever before. for a control
mechanism. such as one provided by ISO 9000, to ensure consistent quality and service
from their own organizations. as well as from their vendors' organizations. ISO 9000 has
been reputed to provide a 'levelplrijing,!ield' for small f ims especially. and to give them
more credibility with their customers (%O 9000: Say What You Do...'. 1996).
However. both small and large f ims have reported benefits to the organization after
registration to ISO 9000. How registered firms could then be of value to their custorners
has already been addressed.
The importance apparel firms actually artribute to ISO 9000 is reviewed next. Findings
have been reported under two separate sub-sections. Information about the use.
importance and knowledge of ISO 9000 is presented under the sub-section ~Quality
Prograrns'. Following that. the sub-section 'Vendor Selection' includes a review of the
vendor critena of apparent importance to Canadian apparel buyers. A sumrnary of the
findings as they relate to each research question are discussed. and the issues remaining
for fùrther researcli explained.
3.3 Quality Programs
3.4.1 Use of Quality Prograrns
The July 2001 statistics for ISO 9000 registrations show a total of 12.455 registrations
across industries within Canada (table 6). An examination of the distribution of
registrations by province shows the quality standards' adoption across Canada. The
concentration of registered firms is within the provinces of Ontario and Quebec. which
together account for 79% of al1 registrations.
From the total number of ISO 9000 registrations in Canada. 1.616 are by firms invoived
with manufacturing, 171 by firms involved in the wholesale business. and 1 13 by those in
the retail business (www.worldpreferred.com. July, 200 1 j.
Table 6. ISO 9000 Registrations in canada'
A search for registered f ims in Canada that were involved with 'apparel or clothing'
Province/Territory
Ontario Quebec Alberta British Columbia Manitoba Nova Scotia New Brunswick Saskatchewan Newfoundland Prince Edward IsIand Northwest Territories Yukon Territory Nunavut Total
identified 49 entries as of July 2001, or only 0.4% of the total number of registrations in
Canada (www.worldpreferred.com, Jrily, 2001). A similar search under 'textiles or 39
' ~ u r a from WorldPreferred. corn. as ofJrrfy 5, 200 /.
Number of registrations to ISO 9000
5905 394 1 8 14 742 292 263 2 1 O 143 1 09 30 2 - 7 1
12455
Percentage of total
47.40 3 1.60 6.50 6.00 2.30 2.10 1.70 1.20 0.90 0.24 0.02 0.03 0.0 1
1 O0 .O0
fabric' showed 45 firms. that is. 0.36% of al1 ISO 9000 registrations in Canada (ibid).
However. as gathered from the literature survey and the interviews. ISO 9000 registration
nurnbers alono were not fùlly indicative of the quality initiatives undertaken by apparel
firms. For example, one article reporting the results from a Quebec garment
manufacturers' survey pointed out that '40% per cenf offirms in ~ h e gat-men1 sector ha(tl)
implemented a formal quaiity improvernent program ... (and th& anofher 38 per cent of'
garment manrrfnctztrers said fhey had plans to do so' (Movement Quebecois de la
Qualite, 1998: 13).
Another indicator of the exposure to. and implementation of quality programs arnong
apparel firrns, was the 'Sean Quality Partnership Program'. This vendor quality program
was reportedly launched by Sears Canada in 1987, and 'mvards formal cerfi$cafion whet?
a supplier S quality confrol system rneefs Sears sranclards for prodr(ct qrraliry' ('Dales
named a Sears Certified Quality Supplier', 199 1 A). Mr. Arvind Patel of Sears Canada
observed how the domestic apparel industry had evolved over the years to become
'(m)ore q z d i v oriented' (Patel. 1999). According to him. a decade earlier it was
difficult to get apparel manufacturers to participate in the S e m Canada quality propram.
He gave credit to Sears Canada and other such retailers and manufacturers. which have
demanded systematic quality initiatives from their vendors. thereby encouraging the
awareness and implementation of quality prograrns in Canada.
3.4.2 Knowledge of ISO 9000
Evidence of Canadian firms' familiarity with the ISO quality standards came from the
results of a national s w e y (Standards Council of Canada. 2000). This survey of
JO
registered and non-registered f ims across industries in Canada showed that obtaining
information on ISO 9000 was not an issue, and that even among the non-registered firms.
a significant nurnber (one-third) described themselves as being familiar with ISO 9000.
Among the Canadian apparel firms. the presence of training programs on ISO 9000 was
noted as one indication of exposure to the requirements of the quality standards. A
description of two training programs is only included here. Although these programs
were not exclusive to apparel firms. they were either advertised in Cunadiun Appurel
magazine, or mentioned in relation to apparel firms.
According to Mr. Aivind Patel, Sears Canada has an educational program for its vendors
which includes training on ISO 9000 implementation. The training period is between 6
to 9 months. A second training program on ISO 9000 is conducted by the LaSalle
College Industries and Centre Specialize de la mode du Quebec. in partnership with the
Arnerican firm. The Sam Group/Stat-A-Matrix. over a period of 25 months. This
program, calied the 'ISO 9000 Consortium Program for Small Businesses'. is apparently
geared to the needs of apparel firms. especially the small firms for whom registration is
not feasible in terms of costs. Speaking for his fxrm, Steven McNair explains that
'Ohe SAM Grozip recognized the partictrlar concerns of ihe apparel indztstty and cmle zrp with the ideu of grozping compnnies into consortiztrns to bring [hem logerher ro lecrrn and compare notes wirh other compnnies ' ('ISO: Getting together for success', 1996: 16).
3.4.3 Importance of ISO 9000
Schellinck & Rosson's study (2001) of Canadian firms across industries involved in
international trade (exporting) found that the great majority of registered firms held
positive beliefs about ISO 9000 leading to specific benefits. These benefi ts were ranked
41
according to the proportion of firms that claimed to have had experienced them. The five
highest ranked benefits included 'greaier qualiiy awat-eness by employees' .
borganizational sev-discipline'. 'improved munagernent practices'. -higher perceived
qzraliy by customers'. and 'increase in qrtality of prodttcts and services' (Schellinck &
Rosson, 2001). Interestingly, the marketing and competitive advantages were ranked
sixth and seventh respectively.
Benefits reported by Canadian apparel fims as experienced after registration were
consistent with those reported by firrns elsewhere. and included those relating to internal
processes. marketing and competitive advantages (table 4). in terms of benefits to
internal processes, one article by a representative of an Amencan firm suggested
profitability for a firm implementing a quality program (Hunter, 1993). A second article
reported on a small firm that recognized ISO 9000's contribution in 'srreumiining the
fIow of information ' and providing 'traceabiZity7 ('ISO 9000 benefits smaller companies
too', 1998). In a third article, a Senior Manager of KPMG Quality Registrar Inc. noted
that, whereas ISO 9000 had been sought for its marketing advantages in the past. KPMG
clients were now also pursuing these quality standards to gain 'operational
improvements' in their organizations (Giguere. 1998).
Benefits relating to marketing and competitive advantages were also experienced by
registered appareI firms. An exarnple of the marketing benefits was found in an article
about a protective clothing manufacturer that chose to register to get the attention of its
customers and preferred ISO 9000 to TQM because of its 'tangible proof' of a quality
program ('ISO 9000: A significant advantage when dealing with new customers-. 1996).
The competitive advantages from ISO 9000 and similar quality programs were reported
in several articles. According to one article, quality programs such as TQM should be
used as a 'comperifive weapon' (Davidson, 1993). A second article reported on an
apparel manufacturer that chose to register to ISO 9000. hoping to gain 'conzperiiive
advanluge' in seeking new customers in the U.S (Giguere. 1998). A third was based on
the wamings issued by the President of KPMG Quality Registrar Inc., that in order '(00
afirïzct the nltention of potenfial eustomers, firrns) need to not only bzrild rheir credibiliv
as suppliers. bnrt lo do so in a itoy rhat is recognized ivorldwide' ('1 SO 9000: Say What
You Do.. .', 1996: 17). The author also observed that larger corporations in general were
reducing the number of vendors they work with and reasoned that ISO 9000 could
become the advantage registered vendors have over their non-registered counterparts-
Next. how apparel firms in general view ISO 9000 and other quality programs was
gathered from opinions expressed in the interviews. It was found that ISO 9000 as a
standard was considered of limited value to apparel and textile firrns. For example.
speaking for textile fims, Mr. Eric Barry commented that ' I S O 9000 is a fud. that people
are not sure what it does, and that only companies for which registration was a -crtstomer
reguirernent'. or those wanting to be viewed as 'progressive', or bfushionahle'. would
adopt ISO 9000 (Barry, 1999). Mr. Jeff Otis was questioned about why investment in
quality is less than that in Electronic Data Interchange technology. His reply suggested
less value of ISO 9000 for the apparel firms as well. According to him, quality programs
in general '(ive)re more show' and that 'bigger companies talk nbout i f (Otis. 1999). In
contrast. Mr. Arvind Patel of Sears Canada was more favorable in his response saying
that any quality program including ISO 9000 that ensures conformance to specifications
is usefùl for a firm (Patel, 1 999).
The opinions expressed by the individuals above indicate differences in the importance
given to ISO 9000 according to the apparel fim category represented. For example. the
retailer representative interviewed was more encouraging in his responses toward ISO
9000 in a vendor as cornpareci to the two manufacturer representatives. LikeIy
differences in response to ISO 9000 according to firms' use of quality prograrns and also
perhaps the size of the firm seem possible from the information gathered so far. Whether
these differences in opinions actually exist among apparel f ims needs to be further
examined.
The next sub-section presents the information relating to vendor selection. A significant
amount of effort by firms is also directed towards obtaining control over their supply
chain. Whereas ISO 9000 was seemingly of less value to apparel firms themselves,
whether it was perceived as tiseful in their vendors was also investigated.
3.5 Vendor Selection
3.5.1 Criteria of Importance to Canadian Apparel Buyers
The literature on the Canadian apparel f i m s highlighted the vendor criteria that would be
considered important to apparel buyers. However, these criteria were mostly those
reported by the leading retailers about which the articles were written. These criteria
were found to be both general and specific in nature.
The genernl vendor criteria dealt with comrnitment. trust and long-lasting partnerships.
For example, Ed Matier, Vice President of Sears Canada, disclosed of his Company that
44
'(w)e rire looking for true partnerships with key vendors, who will share in OZU- grorvrh.
uccept the opportunities and risks wiih us. and reap the rewards ofdoing so' ('The View
from Jarvis Street.. . '. 1 999:np). For overseas vendors in particular. the business
relationship with the vsndors as well as their reliability. flexibility and consistency were
found to be of importance (Patel, 1999; Otis. 1999).
The specijic requirements were either in the f o m of simple packaging instructions. or as
sophisticated communication software needs. such as the Quick Response tool. Electronic
Data Interchange (EDI) ('Sears Vendor Diversity: Requirements'; Otis, 1999). Others
mentioned included quality of product. capability. manufacturing time. meeting
specifications and profitability. For overseas vendors, the specific criteria were those
regarding the working conditions of the factory. type of machines. the management
team's quality practices, the fabrics and prices offered.
3.5.2 ISO 9000 as a Criterion and as an Information Cue
Opinions expressed about ISO 9000 as a criterion for vendors in general were varied. yet
insightfùl. According to Patel (1999). registration to ISO 9000 in a vendor is ofien
considered as an acceptable substitute for Sears Canada's own quality program. Otis
(1999), however, differed in opinion. saying that, at Grand National Apparel. a quality
program in a vendor is 'no! ioo important'.
ISO 9000's function as an information cue was evident in the case of an overseas vendor.
Both Otis (1999) and Patel (1999) indicated their preference for the registered overseas
vendor over its non-registered overseas counterpart in a hypothetical vendor choice
situation. Why this response was meaningful was because. previously, Otis had
45
disregarded quaiity prograrns' importance for vendors in general. He justified his
comment by explaining that the registered vendor 'probably aZso hus the cleun factory'
(Otis. 1999). Interestingly. Otis held positive beliefs about certain benefits from ISO
9000. and these seemed to have an influence when considering an overseas vendor for
business.
3.6 Results of the Background Investigation
The overall findings from the Iiterature survey and the three interviews that were
conducted to address the two research questions are presented in this section.
The ISO 9000-related opinions frorn a buyer's perspective were non-existent in the
literature survey. However. evidence of ISO 9000's importance to buyers in the vendor
selection process was apparent in the interviews. The possibility of ISO 9000's use as a
criterion and its influence as an information cue in vendor selection was found. For
example. quality programs, including ISO 9000. appeared to be important as vendor
criteria to large retailers. Also, the industry experts interviewed seemed to prefer the
registered vendor in a hypothetical overseas veridor choice situation. Nevertheless. these
findings were not enough to draw any meaningful conclusions about ISO 9000's role in
apparel buyers' vendor selection. However, they encouraged the researcher to further
investigate this area.
The literature survey and the interviews were useful in providing background information
on three factors, i.e. firms' use of quality programs, buyers' knowledge of ISO 9000 and
their beliefs about the importance of ISO 9000 for leading to certain benefits. These
sources also led to the identification of a fourth factor, the category of the apparel firrn
46
(retailer. manufacturer or wholesaler). as having a potential role in determining buyers'
responses to registered vendors. However. what role each of the four factors plays. coüld
not be satisfactorily addressed from these findings. The major issues that remained
unresolved at this point are explained in relation to each factor.
Firstly, ISO 9000 was not found to be a common quality program in use by apparel firms.
Instead, firms' o m in-house versions of quality improvement programs appear to be
more popular. Proponents of ISO 9000 have suggested that buyers representing 1ims
using a quality program are more likely to require the same fiom their vendors
(Goodman. 1998). Whether buyers from apparel firms that use informa1 quality
programs require similar programs or ISO 9000 from their vendors needs to be
determined. An invesiigation of the use of quality programs should also be made
according to the size of apparel firms. Information from the interviews suggests that
quality programs are more likely to be used by larger firms.
Secondly. familiarity with ISO 9000 arnong Canadian firms in general was likely
according to the findings of a recent Canadian survey (Standards Council of Canada,
2000). The possibility of knowledge of ISO 9000 among apparel firrns was also present.
based on the training prograrns in existence. The training programs described earlier.
although not exclusive to apparel fimis. were apparently tailored to their needs. The fact
that the training was provided over an extensive tirrie period suggests a more
comprehensive coverage of ISO 9000's requirements as cornpared to that which a two
day workshop on ISO 9000 irnplementation, for example, would provide. However,
buyers' participation in these programs cannot be confirrned. Their knowledge about
ISO 9000's elements is unknown.
47
Why information about buyers' knowledge of ISO 9000 is useful is explained from the
findings of two specific empirical studies. One study concluded that respondents
claiming to be aware of ISO 9000 may not actually understand what the quality standards
represent. These respondents had incorrectly described the standards as a 'qzraliw conrd
syslern'. 'rneasure of czrstomer safkfacfiort/servicr '. and 'srandard of cornpzy
pevformnnce' ('Attitudes of '-Captains of Industry". . ..' 1996). In a second study. it was
suggested that 'consumers ' fumilinriîy wifh the ISO 9000 srandctrds rnay also influence
rheir propensiv !O use the ISO 9000 cue' (Pacheco, 1 997:65).
Thus. not only is a knowledge measure needed, it should also be such that it can clarify
the extent of buyers' familiarity with the quality standards. Determining buyers'
knowledge of ISO 9000's elements would serve this purpose.
Thirdly, beliefs about the benefits attributed to ISO 9000's importance. were found to
Vary. The registered apparel firms reportedly found value from ISO 9000 adoption.
However. certain individuals interviewed disregarded its usefulness for firms dealing
with the apparel sector. Buyers' opinions were not available. However. buyers' beliefs
about ISO 9000's importance for leading to certain benefits are useful for this study.
Previously. researchers have established a relationship between the beliefs held by
individuals and their subsequent attitudes and purchase intentions (Erickson et cd.. 1984).
Buyers' beliefs about benefits related to registration should help to clarifi how they
would respond to registration in a vendor choice situation. Additionally. information
about buyers' beliefs about the benefits would indicate their perceptions about the extent
of ISO 9000's effectiveness. ISO 9000's usefidnsss for reducing uncertainty in a
vendor's products and services. for example. that has been claimed by its proponents to
be of importance to buyers, could be claràfied (Ferguson. 1996).
Lastly. findings from interviews aiso hinted at differences in responses toward ISO 9000
according to the different apparel firm categories that buyers represented. For example.
the retailers apparently placed more emphasis on a vendor's use of quality programs sucli
as ISO 9000 than did the manufacturers. However. the literature survey also indicated
that manufacturers were the predominant users of quality programs. especially of 1SO
9000. Therefore. their responses to ISO 9000 in a vendor shotdd be more favorable
toward a registered vendor. Further research is needed to determine if differences in
buyers' responses to ISO 9000 actually exist across apparel firm categories. If such
differences do exist, it would be useful to identify the apparel firm category whose buyers
are most favorable toward ISO 9000.
3.7 Questions for the Quantitative Study
An empirical study was designed to address the remaining issues that were highlighted in
the previous sub-section and are listed below. These issues are described as sub-
questions under the two main research questions of the study. In light o f the fact that
findings from the background investigation lacked a buyer's perspective. the focus of this
study was specificaIIy Canadian apparel buyers. AdditionaIIy. in order to learn more
about ISO 9000 registration's usefulness for international trade, the opinions of buyers
from firrns involved in overseas sourcing were specifically sought.
By aiming to answer the following sub-questions, this study hoped to better address the
research questions. The sub-questions are enumerated below.
49
Research question 1 : Are buyers influenced bv ISO 9000 in vendor selection?
a) 1s ISO 9000 used as a criterion?
i. Do buyers consider ISO 9000 as an important vendor criterion?
ii. How does ISO 9000 r d relative to other vendor criteria of importance to
buyers?
b) 1s ISO 9000 influential as an information cue?
i. Do buyers have favorable attitudes and selection intentions toward the
overseas registered vendor in a vendor choice situation?
Research question 2: Do certain factors detennine how buyers respond to ISO 9000 in vendor selection?
a) 1s the category of the apparel firm a factor?
i. Are there differences in the use of quality programs, knowledge of ISO
9000 and importance of ISO 9000 according to the category of the apparel
firrn?
ii. Are there differences in responses to registered vendors among buyers
according to the category of the apparel firm?
b) 1s an apparel firm's use of a quality program a factor?
i. What quality programs are in use among apparel finns?
ii. Are there differences in responses to registered vendors among buyers
according to the use of a quality program in the firrn they represent?
c) 1s a buyer's knowledge of ISO 9000 a factor?
i. Are buyers knowledgeable of ISO 9000's elements (ISO 9000: 1994)?
ii. Are there differences in responses to registered vendors arnong buyers
according to their knowledge of ISO 9000?
d) 1s a buyer's belief about the importance of ISO 9000 for leading to certain benefits
a factor?
i. Which benefits from ISO 9000 are important to buyers?
ii. Are there differences in responses to registered vendors among buyers
according to their beliefs about ISO 9000's importance as a quality standard
for Ieading to certain benefits?
4: METHODOLOGY
The background investigation of the Canadian apparel sector revealed only general
information related to quality prograrns and vendor selection. However, the main
purpose of this study was to l e m more about how buyers within this sector perceive ISO
9000, in that positive responses from them wou1d help to clari@ ISO 9000's usefulness to
vendors for gaining business advantage. A quantitative survey was thus undertaken to
specifically obtain Canadian apparel buyers' views on iSO 9000.
This section focuses on the design of the quantitative survey. It explains the
methodology used to address the research questions forrnulated from the literature
review. and the related sub-questions that were identified as a result of the background
investigation. These questions and sub-questions were summarized at the end of the
previaus chapter. A questionnaire was used as the research instrument to collect data for
this study. Details about the questionnaire structure. data collection and sample selection
processes are included. An explmation of the data analysis techniques is then given-
followed by the general assumptions and limitations of the study.
4.1 Research Questions
Two research questions were to be addressed from the quantitative survey. The tirst
related to ISO 9000's possible influence in vendor selection, while the second dealt with
four specific factors, and how they may be linked with certain types of responses toward
ISO 9000. The methodologies used to cotrect information relating to each question are
discussed below.
4.1.1 ISO 9000's Influence in Vendor Selection
To examine ISO 9000's influence in vendor seIection. its use as a vendor criterion. and
its influence as an information cue were investigated. Each is discussed sep ara te!^.
4.1.1 .a. ISO 9000's Use as a Vendor Criterion
To carry out this investigation. a list of vendor criteria of importance to Canadian apparel
buyers was required. A pretest list of 3 l critena was compiled6. Criteria for this list
were partly sourced from a literature review of important vendor criteria used by
industrial buyers (table 5)?. An additional source was the background investigation
conducted in this study, which identified certain criteria of importance to Canadian
apparel buyers in particular. To check the relevance of the 3 1 criteria to apparel buyers
from overseas vendors. the iist was faxed to two apparel sector experts for pretesting.
The first was Mr. Arvind Patel in Toronto. a veteran employee of Sears Canada, who is
experienced in importing and familiar with current vendor requirements. The second was
Mr. Ayaz Thaver in Karachi, Pakistan. Managing Director of an export promotion house,
who is experienced with the types of overseas vendor criteria of importance to apparel
buyers from Europe and North America. Both individuals were asked to rate each of the
3 1 criteria as -Important,' or 'Not important'. Space was provided for the addition of
other criteria that the pretest judges considered to be of relevance.
Most criteria fiom the original list were considered important by the pretest judges,
Pretest Iist has been included in Appendix B. 7 'Country-of origin' and 'Selling history' were excluded as the former had received little consideration in evaluations, and the latter was understood to mean pas1 performance history, and as such did not apply to new vendors.
5 3
and others were also suggested by them. However. rating a list of this length would have
been a cumbersome task for the buyers. In order to avoid the risk o f respondent fatigue.
the pretested list was further refined. Criteria representing the major areas in vendor
evaluation and those relevant to the study were retained. Pnority of inclusion is
explained as follows. FirstIy. those related to quality prograrns and ISO 9000. the focus
of this study were included. Sccondly, those suggested by the pretest judges such as
sufficient export quota quality of fkst samples. short lead times8, low minimums and
prompt supply of quotations were retained. Thirdly. criteria found in the literature survey
of the Canadian apparel sector, such as those dealing with Electronic Data Interchange
(EDI), flexibility in pricing and commitment, were also retained. FinalIy, criteria such as
a vendor's offenng o f competitive prices. technical expertise, financial position.
communication system, economic stability in country. and merchandise fashionability.
were included fiom the pretest Iist.
A reduced Iist of 16 overseas vendor criteria was included in the questionnaire (table 7).
Each criterion was written out as a statement in an attempt to clearly convey its meaning.
Additional clarifications were attached where it was deemed necessary. For example. the
criterion *fashionability of merchandise offered' also included the clarification, 'Le..
vendor independently provides new fabric, style & color ideas'. The criterion 'short lead
times for detivery' was clarified as 'fast cycle times'.
Buyers were asked to rate the importance o f these criteria for a new overseas vendor
evaluation, as opposed to an existing vendor. The reason for this request is that past
- -- -
' This criterion was included in place of 'Delivery' from table 5, as a new vendor is being considered and performance on that attribute is not yet known.
54
experience with a vendor could become a factor in evaluation. which is outside the scope
of this study. Additionally. buyers were asked to consider their mujor products when
evaluating vendors. This instruction was meant to rninimize any differences in the
importance associated with the vendor evaluation.
A 9-point scale was used. with 1 = -Nat at al1 important'. and 9 ='Extrernely important'.
to rate each criterion. Additional space was provided for respondents to include other
criteria of importance.
An obvious concem was the fact that al1 of the criteria provided could be rated as
important. To counter the threat of acquiescence bias. buyers were asked to rate the
criteria as they would in a situation where al1 of them could not be fulfilled by a vendor.
These instructions were intended to force the buyers to consider their own vendor
requirements more practically and also to identify the criteria o f primary importance to
them.
Table 7. Overseas Vendor Criteria ~ i s t '
1 1 1 Economic stability in country in which vendor is ( 9 1 Supplying of quotations prornptly l
- 1 ( vendor independentiy provides new fabric, style ) 1 1
2 3
4 5
Being certifîed to a auality program Being certified to ISO 9000
located
6
1 orders fiom buyer's Company ' Ratings iirere on a 9-poinr scaie. wirh 1 = 'Nor ar ail importanr ' ond 9 = 'Ewetneiy imponattr '.
Offering of competitive prices by vendor Fashionability of merchandise offered (Le.,
& color ideas) Technical expertise of vendor Effective communication system (with
7 8
10 1 1
information on progress of orders) Low minimum quantities for products offered
12 13
Sound thancial position of vendor Short lead times for delivery (fast cycle times)
Long term commitment of vendor Willingness to negotiate prices
14 Possessing Electronic Data Interchange (EDI)
15 16
facilities Quatity of first sarnples Existence of sufficient export quota to meet
The likelihood of ISO 9000 registration being used as a criterion by buyers in their
vendor selection would be established from two measures. One measure wouki be of
how highly buyers rate the importance of the criterion 'being certified to ISO 9000'. A
second measure would be of how ISO 9000 ranks relative to other highly rated vendor
cri teria.
4.1.1 .b. ISO 9000 as an Information Cue
In investigating ISO 9000's role as an information cue. Pacheco (1997) had measured
buyers' attitudes and purchase intentions toward a product that was manufactured to ISO
9000 specifications'. In this study. buyers' responses toward a vendor -with ISO 9000
certification' were obtained. The aim was not just to determine whether registration
could favorably influence buyers' responses toward registered vendors in a vendor choice
situation, but. whether that would also apply within international trade. Therefore. buyers
were asked to rate four statements relating to attitudes and selection intentions toward a
registered vendor, two for each condition. no location given (a registered vendor versus a
non-registered vendor) and location given (an overseas registered vendor versus a
domestic non-registered vendor). The fcllowing two anchors in a 7-point semantic-
differential scale represented each statement.
The statements rneasuring attitude were:
a) 'A vendor with ISO 9000 certification is better than one without ISO 9000 certification', and 'A vendor with ISO 9000 certification is no better than one without ISO 9000 certification'.
b) 'An overseas vendor with ISO 9000 certification is better than a domestic vendor without ISO 9000 certification', and 'An overseas vendor with ISO 9000 certification is no better than a dornestic vendor without ISO 9000 certification'.
The statements measuring selection intention were:
C) '1 would select a vendor with ISO 9000 certification over a vendor without ISO 9000 certification'. and '1 would not select a vendor with ISO 9000 certification over a vendor without ISO 9000 certification'.
d) '1 would select an overseas vendor with ISO 9000 certification over a domestic vendor without ISO 9000 certification'. and '1 would not select an overseas vendor with ISO 9000 certification over a domestic vendor without ISO 9000 certification'.
ISO 9000's influence as an information cue would be judged by the ratings representing
buyers' attitudes and selection intentions toward registered vendors in general and thosc
overseas.
4.1.2 Factors in Vendor Selection
This study was also interested in learning about the role of four factors as possible
determinants of buyers' responses to ISO 9000. The methodologies used to detemiine
the roles of buyers' beliefs about the importance of ISO 9000 for leading to certain
benefits. buyers' knowledge of ISO 9000. firms' use of quality prograrns and category of
the apparel firm are explained in relation to each of the factors.
4.1.2.a. Importance of ISO 9000
Little was found in the literature about the benefits that buyers attnbute to ISO 9000
registration. The ISO 9000-related benefits reported by registered firms and quality
experts were, however. available. These generally fell into four categories. those dealing
with improvements to a firrn's intemal processes. increasing customer satisfaction.
marketing. and competitive advantages (table 4). Thus buyers- beliefs about 60 9000's
importance in leading to these benefits reported by registered firms were exarnined.
Fifteen benefits attributed to ISO 9000 were selected from the literature for this study
(table 8). The benefits were pretested to establish content validity. Mr. G. Dennis
Beecroft. Managing Director of the Institute for Improvement in Quality and Productivity
at the University of Waterloo. served as the pretest judge. Mr. Beecroft was asked to
assess whether the selected benefits 'udeqrtately represen$ed) aspects of iSO (9000) us
ai? irnpor,ant qualiiy syslern stmzdard and marketing tool.' His comments indicated their
appropriateness in this regard (Beecrofi, 1 999).
Table 8. ISO 9000 Benefits for Pretesting
Setting the framework for continuous irnprovement Providine increasing em~lovee ride and effîciencv
Giving a customer confidence that the Company will meet its speci fications lrnproving customer satisfaction Improving management practices
Leading to higher perceived quality of products and/or services Improving organizational self-discipline or irn~roving management control
Providing traceability Reducing operating costs and saving money for organization
'Tangible proof of a quality program in effect
Being an international standard of excellence Establishing a potential vendor's credentials as a reliable business partner Reducing uncertainty about a company's performance attributes Providing ISO companies cornpetitive advantage over non -1SO com~anies
Reducing defects and wastage 1
To avoid the risk of response fatigue. the list was reduced to 20 potentiat benefits (table
9). The intention was to obtain buyers' opinions on benefits from al1 four categories.
especially those that deaIt with the marketing and cornpetitive advantages from
registration. The final list included the benefits that represented the cornpetitive
advantages from ISO 9000 (benefits 1. 2 & 3). the improvements to internal processes
(benefits 4. 5, 7, 8 & 9). that which was customer-related (benefit 6). and that which
related to marketing advantage (benefit 10).
Buyers were asked to rate each of these 10 benefits for their importance on a 9-point
scale from 1 to 9, with 1 = Wot at al1 important' and 9 = 'Extremely important'. The
mean value for each benefit indicated the importance buyers attribute to ISO 9000 for
leading to that particular benefit.
Table 9. Final List o f ISO 9000 ~enef i t s '
1 I 1 ... establishing a vendor's credentials as a 1 6 ( . . . improving customer satisfaction 1 2
1 1 comparative advantage over non-ISO 9000 1 ( 1 3
reliable business partner . . .reducing rincertainty about a company's
1 . 1 products andlor services ( excellence
performance attributes ...p roviding ISO 9000 certified cornpanies with
4 5
1 ' ~ a t i n g ~ were on a 9-poini scale, wiih / = 'Not or oll importanf ' and 9= 'Erfremely impoi-tcmi '.
7
A reliability analysis was conducted from the survey's responses. Researchers report that
the minimum recornrnended Cronbach alpha value for exploratory research is 0.7 (Rao el
al., 1997:np). The Cronbach alpha value was found to be 0.95: which signified a high
reliability based on internal consistency. The inter-item correlation mean was 0.67.
59
... allowing traceablity
8 .. .reducing defects and wastage
I
. . . increasing employee efficiency
. . . being an international standard of
certified cornpanies - 1 .. . improving management practices . . . leading to higher perceived quality of
9 10
which was considered acceptable for this study.
4.1 -2.b. Knowledge of ISO 9000. Use of Quality Programs and Category of Firm
The methodology used to gather information on the three remaining factors is described
below.
Firstiy. buyers were asked to rate their knowledge of ISO 9000's elements on a 9-point
scale. with 1 = 'Not at all knowledgeable' and 9 = 'Very knowledgeable.. To improve
the accuracy of the self-assessments. buyers were instructed that their being
knowledgeable meant 'know(ing) at least some of the elements of ISO 9000'.
Secondly. whether buyers' firrns were using quality programs was obtained by a simple
Yes/No answer in the questionnaire. If quality prograrns were in use. the buyer was
asked to include a brief description of the prograrn.
Thirdly. buyers were asked to identib the category of the firm by which they were
employed. Options provided included an apparel manufacturer. a textile manufacturer.
Canadian retailer, non-Canadian retailer, wholesaler or a catalogue Company.
A questionnaire was used to collect data to address the research questions. Details of its
design follow.
4.2 Research Instrument
4.2.1 Questionnaire Structure
A mailed questionnaire was used as the data collection instrument because of its
advantages of reaching a Iarger number of buyers across Canada, its low cost in
comparison to one-on-one interviews, and neutrality from an absence of interviewer bias.
60
The questionnaire was divided into four major sections, Parts A. B, C. & D'. Steps were
taken to ensure the responses from the buyers would be realistic and unbiased. For
example, the sections were organized so that the factual questions came tjrst. These
questions were followed by the attitudinal ones relating to quality prograrns and ISO
9000. thereby gradually leading the respondent to the c m of the study. Accordingly.
Part A in the questionnaire pertained to background information on the buyers and the
firms by which they were employed. Questions about the buyers' titles and years of
experience. as we11 as those deaiing with demographic information were included.
Part B focused on firms' long term overseas vendor sourcing policies and the major
products they imported. Questions about ratings of vendor criteria were posed in an
atternpt to get buyers to think clearly about their own vendor requirements. Ratings of
ovsrseas vendor criteria then followed. and were included in Part C.
Finally, questions about firms' use of quality programs, buyers' ratings on knowledge of
ISO 9000 and their attitudes and selection intentions toward registered vendors were
included in Part D. The ratings of ISO 9000-related benefits per se w r e included at the
end of this section. This was dons so that buyers' responses toward a registered vendor
would remain uninfluenced by the information on the various benefits linked with ISO
9000.
The questionnaire was pretested by three apparel buyers, two of whom were Canadian
apparel manufacturers, and one a Swiss-based apparel importer. Only minor revisions to
the wording of the questionnaire were suggested by these buyers. The questionnaire was
designed to take no more than 20 minutes to compIete. A short completion time was
9 Questionnaire is inchdeci in Appendk F.
important because respondent fatigue could have otherwise affected the responses to the
questions on ISO 9000 that were placed towards the end.
4.2.2 Data Collection
The survey was conducted in the first week of January. 2000. at a time when apparel
buyers were expected to be relatively less busy. An earlier mailing date of mid-
December was rejected because of the ChristmasMew Year frerizy. which w-as not
expected to be conducive to a good response rate.
Each envelope rnailed to an apparel firm included an introductory letter. a single copy of
the questionnaire. and a self-addressed envelope. A French translation of the
introductory Ietter (questionnaire rernained in English) was sent to the Quebec-based
firms in the target sarnple in an effort to achieve a good response rate.
Some researchers have suggested the technique of 'snowballing'. in which the respondent
is asked to pass on second or third copies of the questionnaire to others in the
organization, thus improving response rate as well as increasing chances of contacting the
targeted individuals (Lehmann et cd., 1998). However. due to the limited budget
available for this research, the technique of snowballing was not used. Nevertheless.
previous research also suppons the possibility of obtaining relevant results from targeting
even a single buyer in an apparel firm. For exarnple, researchers have found that retail-
buying decisions are usually made by the buyer alone (Wagner el ui.. 1989).
Furthemore, buyers from larger organizations have been found to report a higher
percentage of joint decisions than have those from smaller ones and most apparel firrns
were expected to be small (Patton III et al., 1986).
62
Nevertheless. as it was important for the study to secure opinions of buyers who were
involved with vendor selection decisions. additional measures were taken. To improve
the chances of targeting the desired individual, the introductory letter was addressed to
the 'President' of every firm. asking for his/her assistance in directing the questionnaire
-10 an individual rvho has some authority tu select new overseas vendors'.
4.3 Sample Selection
From the literature survey and the interviews, it was apparent that apparel buyers were
employed by three major categories of firms: retailers. manufacturers. and wholesalers.
A stratified sampling procedure was thus selected to include each of these groups in the
swvey. The stratifying variables in this siudy were the category of apparel firm and the
practice of overseas sourcing.
Stratifiing the sarnple by category of firm had the advantage that the overall power in the
study could be improved. According to researchers. one way to improve power in a
study is by using a homogenous group of subjects (Fazioxd). In this case. respondents
within each category of apparel finn are assumed to be homogenous. thus irnproving the
power of the findings that relate to comparisons of this factor.
Four sources were used in sample selection: the publications of 1) the Canadian Apparel
Federation. 'STYLE: Buyers' Guide' (importers and whole~alers)'~. 2) the Canadian
Apparei Manufacturers, 'Apparel - Buyers ' Guide' (apparel manufacturers). 3 ) the Retail
Council of Canada, -1999 Retail Chains in Canada' (retailers), and 4) the Canaciian
- -
1 O The manufacturers listed here that also appeared in the appurel publication list were deleted. I-iowever, others that could not be identified from their profiles may have been included.
63
catalogue firms (retailers). From these four sources. firms that were importing apparel.
fabric. or accessories for apparel" were selected to form the target population. Firms
were not excluded if their product line or importing policy was not given. A sample of
500 firms was selected frorn these four publications using the nth name systernatic
sampling procedure, and targeting a cornmon proportion of firms from each publication.
4.4 Data Analysis
To examine the responses of the surveyed sample of buyers. simple quantitative analysis
methods were used.
The descriptive and demographic information available on the respondents and the firms
by which they were employed were analyzed using simple frequencies. Fims' location.
size, and the major products imported were examined using this technique.
Frequencies were also used to determine the proportion of firms using quality programs.
to identie the category of apparel firm predorninant arnong the users. and also to note
any differences in the use of quality prograrns by the size of the apparel firm.
Buyers' ratings on the vendor criteria, as well as the benefits. were examined using mean
and indexed scores. The indexed score for a single criteriodbenefit was obtained by
subtracting the average of the mean scores of al1 criteridbenefits from the mean score of
that criteriodbenefit (Lehmann el al., 2998). This procedure was helpful to enhance ths
differences between the seerningly important and Iess important criteriahenefits. and thus
aided analysis. To identify preferences for specific criteria by buyers from a particular
category of apparel firm, crosstabulation analyses were conducted. From the distribution
I I Buyers importing fabric & accessories for apparel were also induded to increase the sample size. 64
of ratings along a specific criterion. those that were rated as very or extremely important
by the majority in an apparel firm category were examined.
A cornparison of means \vas undertaken for a11 remaining analyses that related to vendor
seiection? and also. to differences in vendor selection by the four factors (knowledge of
ISO 9000. importance of ISO 9000. category of apparel fim and use of quality program).
Responses relating to the factors were classified into groups for this purpose. Where not
already existing. groups were created using a specific cut-off point. For example. buyers
were classified as having 'low' or 'high' level of knowledge depending on whether their
self-ratings were less or more than - 5 ' . the mid-point. representing being knowledgeable
of some elements of ISO 9000. Buyers were also classified as giving 'low' or -high'
importance to the benefits attributed to ISO 9000 according to whether their overall
ratings on the 10 benefits were less or more than the median value of the overalI ratings
from al1 buyers. Classifications for use of quality prograrns and category of firm were
made simply according to buyers' responses to the questions about whether their firms
were using quality prograrns or not. and which apparel finn category their firm best
represented.
4.5 Assurnptions and Limitations
Results from this study should be interpreted in light of the following assumptions and
limitations.
One assumption is that al1 apparel firms in Canada were listed in the four publications
used for sarnple selection. It is possible that certain apparel fim categories were under-
represented. From the respondents. those representing the non-Canadian retailers and the
catalogue firms were missing. Thus. their views on ISO 9000 are not represented.
A second assumption in this study is that the buyer makes vendor selection decisions.
This assumption was made partly based on the findings in industrial marketing literature
about vendor selection being a major activity for industrial buyers (Dempsey. 1978:
Patton III. 1996). It was also made based on the information from apparel sector experts
confirming apparel buyers' involvement in vendor selection decisions (Patel. 1999:
Thaver. 1999). Additionally. a request was made to the Company President in the
introductory letter used in this study to direct the questionnaire to an individual involved
with vendor selection. The title of the respondent and hisher years of experience. and
the size of the majority of fims in the sarnple were used to indicate the likelihood of the
respondent making vendor selection decisions. However. buyers with little or no vendor
selection experience in the sarnple may have regarded a vendor's registration to 1SO 9000
with less importance, thereby influencing results. Responses from such buyers would
also affect the practical value of the findings that pertain to vendor criteria of importance.
A related assumption is that the vendor selection decision is made by the buyer alone.
rather than as a member of a team. This assumption was made based on the findings in
the industrial marketing literature relating to retail buyers and buyers from smaller
organizations making vendor selection decisions alone (Wagner et al.. 1989: Patton II I el
al., 1986). However, if the final decision to select a vendor dspends on the inputs of a
buyer. along with a quality technologist. field inspector and engineer. for example. the
favorable response to the vendor's registration of one of these individuals would not be
an accurate indication of ISO 9000's influence in vendor selection.
66
Several limitations in this stiidy must also be mentioned. One major limitation comes
from the overall low response rate obtained in the quantitative survey. The
generalizability of the results is therefore compromised and interpretations must be made
with caution. 4 related concem comes from the threat of non-response bias for the
questions related to ISO 9000. Alrnost half of the buyers who answered these questions
selected 'Don't Know' as their response. Although this answer is itself indicative of less
experience with ISO 9000. it means that the analysis of the results was based on an even
smaller group of buyers. Furthermore, the availability of a small sample for the analysis
rneant that certain results. while offering directional support. were not substantiated in
tests of significance.
A second limitation relates to how well the benefits attributed to ISO 9000, that were
used to measure buyers' beliefs about ISO 9000's importance. tmly represent the four
categories (interna1 processes. customer-related, marketing and cornpetitive advantages).
Although pretesting of the benefits' list confirmed that each of the benefi ts aptly retlected
the importance attributed to ISO 9000. whether they sufficiently represented al1 aspects
of the four categories was not tested. Most analyses related to the benefits have dealt
with them singularly. However. it must be noted that conclusions drawn about buyers
and their beliefs about the -cornpetitive advantages' from ISO 9000 are in relation to their
responses on the three benefits that were used to define this benefit category (reducing
uncertainty about a firm's performance attributes. establishing a vendor's credentials as a
reliable business partner and providing comparative advantage to a registered vendor
over a non-registered vendor).
Possible correlations between the beliefs about the benefits attributed to ISO 9000 and
buyers' attitudes toward an ISO 9000 registered vendor were not closely examined as
part of the analyses. Bivariate correlations that were conducted showed a negative
relationship between the beliefs about most of the benefits and buyers' attitudes toward
an overseas registered vendor. However, fürther investigation in this area is required.
Limitations from the research design also exist. Threats to interna1 validity are present as
questionnaires were mailed to the respondents, and there was no control in terms of
ensunng that the questions were read in the correct order. that the respondent completed
the questionnaire alone. and that it was retumed. Other threats relating to testing.
instrumentation and selection, however, would have been addressed by randomizing the
sample selection.
5: RESULTS
This section begins with the presentation of demographic information about the
respondents. Three following sub-sections describe the firrns' use of quality prograrns.
buyers' knowledge of ISO 9000 and their beliefs about the benefits attributed to ISO
9000. Differences in responses by the category of the fim are exmined within each sub-
section. Following that. results with regards to the two research questions are presented.
Firstly, findings relating to ISO 9000's influence in vendor selection are reported under
the two sub-sections entitled 'Vendor Criteria' and 'ISO 9000 as an Information Cue'.
Secondly, findings relating to the role of the four factors as determinants of buyers*
responses to ISO 9000 are presented under the sub-section entitled -Factors in Vendor
Setection'. A discussion of the major findings that address the research questions is then
presented at the end of this chapter.
5.1 Sample Demographics
~ i f i ~ - s i x " apparel buyers from across Canada, and representing three major apparel tirrn
categoriesI3. manufacturers, retailers and wholesalers. characterized the respondents
(table 10). The manufacturers represented in the survey were twice the proportion that
was sampled (29% of the number in the sample versus 16% of the number in
publication). Two obvious absentees, the non-Canadian retailers and the catalogue
cornpanies were noted, and possible accounted for the slight disparity in proportions
" Fi@ six buyers fi-orn a sample of 500 responded. representing an 1 1.2% response rate. 13 Three irnporters were present in the sample. For al1 analyses. their responses were combined with those of the wholesalers. However, they have been shown separately in the tables.
69
found within the retailers' category (27% of the number sampled versus 39% of the
number in publication). The proportion of wholesalers represented was comparabIe to
the proportion sampled (44% of the nurnber sampled versus 45% of the nurnber in
publication).
Descriptive information about the buyers and their firms is included next to l e m more
about the buyers' backgrounds. The location. size and product Iines of the f ims are
identified. Also, buyers' titles and expenence are examined to gauge the likelihood of
their making vendor selection decisions.
Table 10. Survey Responses by Category of Firm
. , . ,
Retailers (including 1 440 1 194 (39) 1 17 (27)
Category of firm Wholesalers (including Importers) Manufacturers
'The percentacqe offirtns represenred within &ch category is given in bruckefs. ' ~ o t u l is 62 for ntrmber responded insreuci of56 hecause of double atlries. For aumplr. some hztvers idenfrjÎed theirfirms as fttncrioning us both un uppurel rnunzrfacnu-er and \vho/esaler. For uns-is prrrposes the respor~sesfrom the dortble enrries rcwe ussigned ro the caregon* offirrn rhar rsus rtnderrepr-csenrrd.
Number in publication 5 15
187
Catalogue) ~ o t a l '
5.1.1 Location
The majority of the f i m s in the survey (86%) were based in either Ontario or Quebec
(table 11). The sarne was true within each appareI firm category. From the infbrmation
available, the percentage of apparel manufacturers from Quebec was low (40%)
compared to their actual representation in that province (67%) ('Highlights - Apparel
Sector Competitiveness Frarnework', 1997).
Number in sample' 235 (45)
81 116)
I I42
Number responded' 27 (44)
i 8 (29)
500 62
Table 11. Responses by Province & Category of ~ i r m '
Province
1 ' The perceniage offirrns represenled rvilhin each cutegory is given in hruckers. 1
Ontario Quebec British Columbia Nova Scotia
About half of the firms in the sample were small, with less than 25 employees. One fifih
identified themselves with the largest group, i-e. more than 100 employees. Most of the
importers and wholesalers belonged to the smaller group. while the apparel
manufacturers and retailers appeared about equally in the smallest and largest groups.
More large apparel manufacturers were present in the sample than is true of their size
distribution in the population'J. Three mega-retailers were represented. as was obvious
from the large number of locations identified (69. 85. and 240. respectively).
Totai by ~rovince
5.1 -3 Major Products Imported
About 80% of the firms were involved in importing''. The proportion of apparel. fabric
and accessories imports arnong respondents was 60%, 28% and 27% respectively. The
products imported by these h s were mainly from low cost countries, and were targeted
for the mid-range section of the apparel market (table 12).
26 (46) 20 (40) 4 (6 ) 2 (4)
IJ According to an Industry Canada report. 75% of apparel rnanufacturers have less than 50 employees ('The Canadian Apparel Industry', 1999). 15 Firms not irnporting were instructed to skip the overseas vendor criteria ratings. but were asked to complete the section on quality prograrns.
7 1
Apparel Manufacturers
7 (46) 6 (40) 1 (7)
Retailers
7 (50) ' 8 (47)
Wholesalers
3 (33)
lmporters
4 (29) 1 (7) 1 (7)
7 (41) 1 (6) 1 (61
3 (50) 1 (17)
Table 12. Major Products Imported'
f S h irts 1 24% / Fabric 1 9% 1 Blouses 1 4% 1 Overalls 1 2O/n I 1 I
- - . -. . - - - - Sportswear 1 20% 1 Dresses 1 79'0 1 Swimwear 14% 1 Pajamas 1 2?%
5.1.4 Buvers as Vendor Selection Decision-Makers
Accessoïies Sweaters lntimate apparel Leather goods Scarves
A large majority of the responses were from respondents holding senior level positions.
Le. either 'Presidents'. -0wners' and 'Vice-Presidents' (70%) or 'Managers' and
' ~igz tres given are the percenrage offirms in the sampk inrporting the prodrrct-
20% 18% 13% 1 1% 9%
'Directors' (20%). At least five years of experience at their curent job hnctions was
common for the majority (85%). Notably. a large percentage of the group (69%) had
Hosiery Fashion jewelry Ties Bandanas Suits
over 10 years of experience and a substantial number (25%) had over 20 years of
experience. Because of authority and experience, as well as the fact that almost half of
7% 7% 4043 4% 4%
the firms represented were small, it is logical that the respondents would be involved in
vendor selection decisions.
Pants am'
, Shorts Socks Gloves
5.2 Quality Prograrns
The number of firrns that were using quality programs. why they were using them. and
who the typical users were is reported here. This is foliowed by a description of the
nature of the programs in use.
4% 4% 2% 2% 2%
Robes Rainwear Industria1 workwear Latex clothing Pullovers
2% 2043 2% _ 7 04 ,
2%
5.2.1 Use
Approximately one third of the buyers indicated that the f i m s by which they were
employed were using quality progams (30%). Only four of these f i m s were following
one of the ISO 9000 quality standards. This finding is consistent with the information
from the background investigation that in-house versions of quality programs are more
comrnon among apparel f i m s than forr-nal quality systems such as ISO 9000.
A firm's 'cornpany policy' was the most popular reason given for implementing a quality
prograrn (70% of responses). A number of respondents also stated that a quality program
was implemented to meet their domestic customers' requirements (4 1 % of responses).
The three apparel firm categories, manufacturers. retailers and wholesalers. were fairly
equally represented among the users of quality programs. However. consistent with the
findings of the literature survey, it was only the manufacturers arnong them that were
registered to ISO 9000.
Results also support the views expressed by industry experts. who have suggested that
quality prograrns are mostly in use by the larger firms (Otis, 1999). A much higher
proportion of the larger firms in the survey were using a quality progranl than was tme of
the smaller firms (70% and 22%, respectively).
5.2.2 Description
Buyers' descriptions of the quality programs in use by their firms were categorized as
either quality control (QC) or quality assurance (QA) (table 13). The researcher
acknowledges that a sentence or two describing the quality prograrn in use is inadequate
to make a fair assessment of the importance of quality within a firm. However. the
73
categorization does give a general idea of the rnaturity of the quality initiatives within
these firms.
Table 13. Quality Programs in Use
7
Category offirm'
A M
A M W
CR
A M AM
No.
1
2 3 4
5 6
Description of quality program
'Interna1 Quality Control Program. Partial impfementing ISO 9000 internally'. 'ISO 9002'. ' Barcodes'. 'Every piece of merchandise is inspected (at) store Ievel before put on sale floor'. 'ISO 9000'. "In house program to our specifications'.
8 9
Title of respondent
Pres iden t
Director Buyer Manager
President Marketing
Type of quality
7
program- QA
Q A Qc Qc
QA Qc
Director Vice
IO 1 1 12 13
L
1 1 . 5 1 President 1 I
CR 1 'We have our "Department of Quality" plus al1 the 1 Qc
President President
approves al1 sarnpies. and what finally cornes in they work with QC department. in warehouse to make sure what was ordered is in fact what was shipped re: construction of garrnentsl- 'Full inspection of merchandise is done before shipping to any customer - flaws. defects. etc.'.
W
Qc
1 President 1 ' A 121 - Apparef rnanzlfacrzwer, CR - Cunadian retuifer, and M' - FVholesaier. 'QC - Quafip conrroi and QA - Qzraiip assurance.
President 1
A M W
President President Owner President
1 / 16
Most quality prograrns seemed to be exarnples of QC, and were limited to inspection and
important consideration that al1 our customers 'Our own "cornmitment to quality" philosophy is an
'Follow same programs as Sears, J-C. Penney, Walrnart'. 'Physical inspection of every garment'. 'In-house QC Control'. 'Have a fit and spec department that specs out and
W A M CR CR
testing processes, possibly initiated by the firms' own needs for monitoring quality, as
Qc
appreciate'. 'ISO 900 1 '. 'AI1 styles received are checked by buyer or major account re~resentative'.
QA Qc Q c Q c 1
Vice
opposed to being requirements by their customers. Only five firms were following a QA
QA Qc
CR facility to follow the production'. - Working with wash tests. shrinkage, fabric control'. Qc
program. such as the ISO 9000 quality system. which affects the processes of the entire
organization.
5.3 Knowledge of ISO 9000
Knowledge of ISO 9000's efements arnong apparel buyers was low. The rnean of
buyers' self-ratings was only 3.3. on a scale where 1 = 'Not at al1 knowledgeable' and 9 =
'Very knowledgeable'.
A cornparison of knowledge ratings arnong buyers across apparel firm categories yielded
the highest mean (4.2) for the apparel manufacturers (table 14).
Table 14. Knowledge of ISO 9000 by Category of F'irrn1
Category of firm Apparel manufacturers
W holesalers
C Retai lers
It may be that since ISO 9000's implementation in the service industries has been more
recent than it has in the manufacturing industries the manufacturers' exposure to the
requirements of the quality standards is comparatively higher. Al1 four firms registered
to ISO 9000 in the survey were apparel manufacturers. However. although higher than
the scores of the other apparel firm categories. the manufacturers' score was less than 3'.
the mid-point of the knowledge scale. It is possible that buyrrs within this apparel firm
category (and quite likely those in other apparel firm categories as well) are
comparatively less exposed to the requirements of ISO 9000 than would, for example, be
Importers
N? 14 17 14
Mean scores f Standard deviation j 4.2 (2.6) 2.6 (1.9) 2.9 (2.5)
' ~ u f i n ~ s irere on a 9-poinr scule. wilh I = 'Nor ur di k~ro~viedgeublr' und Y = 'Ve? know/edgeub/e'. ' N - Nzrmber o f buvers rvho res~onded ro rhis auesrion.
3 3.7 (2.3)
quaIity technologists. Buyers may be less involved in ISO 9000-related training
programs ofTered externally. or even organized within their fimis.
5.4 Importance of ISO 9000
An examination of the mean and indexed scores for each benefit attributed to ISO 9000's
importance identified those considered to be most and least important by the buyers
(table 15). From the indexed scores. the benefit rdating to reduced defects and wastage
was clearly one for which ISO 9000 was most valued (0.69 inde?d6.5 mean). Two other
benefits. with scores ranked above the average. were 'irnproving customer satisfaction'
and 'leading to a higher perceived quality in goods and services' (0.29 index/6.1 mean
and 0.1 9 inded6.0 mem, respectively).
Table 15. ISO 9000 Benefits Ranked by Importance1
Benefit l NL Fk~X;;gdefects& 1 t: lmproving cl;stomer satisfaction Higher perceived uali
Reducing uncertainw
- -
6.5 1 0.69 1 international standard of ] 26 1 5.9 1 0.09
Overail Mean
1ndex3 Benefit
6.1
6.0
Allowing traceability 1 27 t 5.9 1 0.09 1 Comparative advantage 1 2 7 - r 5.2 1 -0.61 ' ~ a r i n ~ s were on a 9-point scnie, wiih / = 'Nol at ail imporfanr ' and 9 = 'Erirem-& impurrunt '. 'N-~utnher ofbuyers who responded ro this qzrestion. iffe fer en ce behvem rhe rnean score ofone benefit and average of the nzean scores ofafi 10 benefi~s.
0.29
5.9
Buyers appeared to be !ess in agreement when it came to the importance of ISO 9000 for
Indes' N'
0.19
leading to competitive advantages for a registered firm. The benefits dealing with
Overall Mean
excelleiice Improving management
0.09
establishing a vendor's credentials as a reliable business partner and providing ISO 9000
practices Increasing empIoyee
28
- . -
eficiency ReIiable business Dartner
26
5.8
28
-0.01
5-5 -0.31
5.3 -0.51
registered firms with comparative advantage over non-ISO 9000 registered firms were
ranked as second last and Iast. respectively. However. a third benefit under this category.
reducing uncertainty in a firm's pefiormance attributes, was ranked much higher.
5.4-1 Importance of ISO 9000 bv Categorv - of Firrn
Mean scores for each benefit were cornpared across apparel fïrm categories (table 16).
Results showed relativety higher ratings from the apparel manufacturers than from the
retailers, importers and wholesalers (overall benefits' mean score of 6.1 versus 5.8, 5.5
and 5.3, respectively).
Table 16. ISO 9000 Benefits by Category of ~ i r r n '
- - ' N - ~ i r k b e r of hrwersivho responded IO this question.
-
AM -.4ppurre/ cClani(âctwer, CR- Canadian Retaifer, CV- Whoiesaler, und /-/niporter.
Benefit Reducing defects & wastage
lmproving customer satisfaction Higher perceived quality
Reducing uncertainty Aliowing traceability
Interestingly. the manufacturers seemed to attribute comparatively more importance to
ISO 9000 for leading to competitive advantage for a registered firm. This buyer group
' ~arivlgs were on a 9-point scafe. with / = 'Not ur al/ importunt ' and 9 = 'Ertreme(v irnportunr '.
N' 26
26
28
29
27
was found to have rated the two benefits. establishing a vendor's reliability as a business
partner and providing comparative advantage to a vendor, much higher than others (with
AM' 6.8
6.2
, 6.3
6.2
5.9
CR' 6.7
6.1
5.9
6.1
6.0
W" 6.2
6.0
5.9
5.3
5.5
1.' 5.0
5.0
5.0
5.0
6.0
Benefit International standard of excellence lmproving management prac tices Increasing employee efficiency Reliable business partner Comparative advan tage
N' 26
28
26
28
27
AM" 5.9
6.1
5.9
5.9
5.7
1' 7.0
5.0
5.5
7.0
4.5
CR' 5.7
5.9
5.9
4.6
4.9
W' 5.3
5.3
4.3
4.2
4.9
the exception of the importers that gave a rating of '7.0' for a vendor as a reliable
business partner).
The next three sub-sections discuss the findings with regards to the research questions.
Results with regards to ISO 9000's influence in vendor selection are presented within two
separate sub-sections. Firstly, its use a criterion is discussed under the sub-section
entitled 'Vendor Criteria'. This sub-section also reports other vendor criteria of
importance to buyers and differences within criteria of importance according to the
category of firm the buyer represents and according to the finn's use of quality programs.
Following that. results pertaining to ISO 9000's influence as an information cue in
vendor selection are discussed along with apparent differences across apparel Fimi
categories. Lastly, findings relating to the roles of four factors (category of firm.
importance of ISO 9000. knowledge of ISO 9000 and use of quality programs) in vendor
selection are presented.
A discussion of the overall findings as they address the two research questions is included
at the end.
5.5 Vendor Criteria
5 S. 1 MisceIIaneous Vendor Criteria
The 16 overseas vendor criteria were ranked according to tlieir mean scores (table 17).
The most highly ranked criteria were compatible with the ones considered important in
industrial marketing research (table 5) . These dealt with pnce and quality. Of interest
among others was one group of cnteria dealing with two factors: 1) flexibility in relation
to prices and working quantities. and 2) responsiveness in terms of prompt replies to
inquiries. quick deliveries and efficient feedback on orders.
Buyers also suggested other criteria of importance. The following were notable:
communication skills and representation. Communication was described variedly as a
vendor possessing 'good Ianguage skills'. having a 'high level of verbal communication'.
or having 'fluent communication in English'. The second was the vendor's
representation in the buyer's home country. Thorelli & Glowacka (1995) have verified
the importance of this latter criterion in their study.
Among those of I ~ s t importance to apparei buyers was the criterion -possessing EDI'
(mean of 4.3). This is contrary to the findings from the literature survey and the
interviews.
Table 17. Overseas Vendor Criteria Ranked by lrnportancel
Criterion
Offering cornpetitive prices
QuaIity of first samples Willingness to negotiate prices Short lead times for delivery Supplying quotations
N~
45
44 44
45
promptly Effective communication
Technical expertise 1 45 1 7.6 ] 0.61 1 CertifiedtolSO9000 ( 40 1 3.8 ( -3.20 ' ~ a r h ~ s ivere on a 9-point scale. wirh / = 'Not ut al/ imporranr ' and 9 = 'Erveme(v impurrunt '. N-Nitrnber of buÿers who responded to this qzresrion.
Mean score 8.3
8.0 7.8
Index3
1.3 I
1 .O 1 0.8 1
45
system Low minimum quantities reauired
- . 1 3~rfleeence benreen the mean score of one criterion and average of the mean scores of dl criterio.
7.8 , 0.81
45
7.7
45
Criterion
hlerchandise fashio~ability Sound financial position Sufficient export quota
Long t e m commitrnent
7.7
N'
45
44 43
score 7.6
7.4 7.2
0-7 1
7.6
1ndes3
0.61
0.4 1 0.2 1
44
0.7 1
Economic stability in
0.61
7.2
country Certified to a quality
0.2 1
44
program PossessingEDI
6.6 / -0.40
44
44
5.3 -1.70
4.5 -2.70
5.5.2 Criteria Reiatina to ISO 9000 and Qualitv Prograrns
The criteria dealing with quality programs and registration to ISO 9000 were of least
importance to the apparel buyers in their overseas vendor evaluations. Both criteria were
ranked arnong the lowest. Although the importance of the criterion. certification to a
quaIity program. was considered as minimal (mean of 5.3). registration to ISO 9000
specifically was found to be of no concem in vendor evaluations (mean of 3.8).
5 - 5 3 Differences in Criteria by Category of Firrn
A comparison of criteria ratings across apparel finn categories was undertaken to observe
differences in ratings on the criteria 'certitjed to a quality program' and 'certified to ISO
9000'. Results revealed that only the apparel manufacturers and retailers rated
registration to a quality program as an important criterion in evaluation (means of 5.5 and
5.6, respectively). Among al1 appareI firm categories, only the apparel manufacturers
rated the criterion 'certified to ISO 9000' as important for a potential vendor (mean of
5 -2).
5 - 5 3 .a. Miscellaneous Vendor Criteria
A comparison of other criteria ratings across apparel firm categories was also undertaken
to identifi any specific preferences. The three highest ranked criteria for each category
of firm were identified (table 18). Most criteria were similarly rated. This is especially
evident arnong the apparel manufacturers for whom the criteria relating to quality.
flexibility and responsiveness were al1 very important (means of 7.9 to 8.1).
Table 18. Important Vendor Criteria by Category of ~ i r m '
manufacturers
Quality of first sarnples (8.9)
1
13 1 Quality of first sampies
:4 :;;;handise fashionability
Short lead times (8.8)
Highest ranked criteria' Willingness to negotiate 1 Offering cornpetitive prices Supplying quotations promptly Effective communication system (8.0)
Offering cornpetitive prices (8.8) Offering cornpetitive prices (8.0) ~ u ~ ~ l ~ i n ~ quotations
prices Short lead times for delivery Low minimum quantities Sound financial position (7.9) Merchandise fashionability (8.7) Q u a l i ~ of first samples
Effective promptly 1 communication system
/ (8.7) 1 (8-3) scale, rt4h 1 = 'Not a[ al/ imporranr ' und 9 = 'Errrentely inzporranr '.
-N-Nurnber of bziyers ivho responded to rhis question. Meun scores are indicured in brnckers. More [han one crirerion hus been shown where the ment1 score
vairte is shared
The criterion 'merchandise fashionability' was found ranked arnong the three major
criteria for the retailers as well as the wholesalers. A crosstabulation analysis showed
that a large majority of the retailers had rated the criteria relating to fashionability (92%)
and sample quality (100%) as extremely important. This finding contrasts with Wagner
et al.'s (1 989) earlier findings. whereby the criteria 'mer chandise fashionabi t ity ' and
'quality' received on1y 'some consideration' by retail buysrs. Industry analysis reports
point out that Canadian consumers have becorne more demanding with respect to product
quality ('Growth Prospects for this Industry'. 2000). This trend is consistent with the
above findings, as the retailers that supply to them have translated the quality factor into
their vendor criteria of priority. The wholesalers' emphasis on merchandise
fashionability suggests that their requirements are consistent with the retailers' demands.
who are likely to be their major customers. 8 1
The major cnteria of importance to the three importers in the sample differed greatly
from those identified for the wholesalers. Whereas the wholesaIers were primarily
concemed with the fashionability of vendors' merchandise, price and produci quality. the
importers appeared to give most importance to vendors' responsiveness and flexibility.
This difference indicates varying responsibilities and priorities for the wholesalers and
importers. and suggests that responses from the two be separately analyzed in future
studies.
5.5.4 Differences in Criteria by Use of Quality Prograrns
Criteria of importance to buyers from firms using quality programs were also examined.
Results showed that only buyers from firms registered to ISO 9000 themselves were
looking for ISO 9000 registration in their vendors. Ratings given by the four registered
firrns to the vendor criterion, 'certified to ISO 9000.' were averaged. The resulting mean
of 7 was much higher than the overall mean of 3.8.
Buyers from fims usinp quality programs in general were not concerned with quality
programs in a vendor. In fact, only 20% of them thought a quality program to be an
extremely important criterion in vendor evaluation. Also. only 6% of them thought
registration to 1SO 9000 specifically to be extrernely important for a vendor.
5.6 ISO 9000 as an Information Cue
Results pertaining to buyers' attitudes and selection intentions toward a registered vendor
could not lead to any meaningfui conclusions about ISO 9000's influence as an
information cue in vendor selection. Buyers' responses toward registered vendors in a
82
vendor choice situation were moderate to neutral. and could be interpreted as suggesting
buyers' indecisiveness in this regard or even their lack of concern for ISO 9000 in a
vendor (table 19). However, the results obtained were valuable in two ways.
Firstly. they indicated that ISO 9000 may not be enough for overseas vendors to gain
business advantage over their Canadian non-registered counterparts. Although responses
representing Canadian apparel buyers' attitudes and selection intentions towards
registered vendors in general were at best moderate, the responses towards overseas
registered vendors were cornparatively even Iess favorable (attitude scores o f 3.8 and 4.3.
respectively. and selection intention scores of 3.5 and 4.3. respectively).
Secondly. results indicated that buyers frorn different apparel fim categories are likely to
respond differently to ISO 9000 registration in overseas vendors. Findings in this regard
are discussed in the following sub-section.
Table 19. Attitudes & Selection Intentions by Category of Firm
ATTITUDINAL STATEM ENTS
Attitude towards a vendor registered to or irnplementing ISO 9000 over a non-registered one Attitude towards an overseas vendor registered to or irnplementing iSO 9000 over a non-registered domestic vendor Selection intention for a vendor registered to or impiernenting ISO 9060 over a non-registered one Selection intention for an overseas vendor registered to or implementing ISO 9000 over a non-registered domestic one
Better than . . . . .. ...,. No better 3 -8 than
Better than ... . . . .. . No better 4.3 thrii 1
Would select .. . .... WouId not 3 -5 select
1
Would select . . . . . . Would not 1 4.3 select I
Ratings were on a 7-poinr semanric d@erential scale. 'AM - ~ ~ ~ a r r l manufactzcrer. CR - Canadian retailer, W - Wholesaler. & i - importer. '~igttres in brackets are the number of bzyers rvho responded ro this question.
8 3
5.7 Factors in Vendor Selection
This study examined ISO 9000's influence in vendor selection by investigating its use as
a criterion by buyers and by exarnining buyers- attitudes and selection intentions toward
registered vendors. Whether certain factors deterrnine ISO 9000's influence in vendor
selection was also of interest here.
Differences in the importance attnbuted to ISO 9000 as a criterion according to the two
factors caiegory of the firm and the use of quality programs were previously discussed.
This sub-section now reports differences in buyers' attitudes and selection intentions
toward a registered vendor according to the four factors (category of fim. use of quality
programs, importance of ISO 9000 and knowledge of ISO 9000).
Explanations of findings are included in the discussion which follo~vs this sub-section.
5.7.1 Categorv of Firm and Use of Qualitv Prohrams
Differences in buyers' attitudes and selection intentions were found according to the
category of firm they belonged to, and also whether the firm they represented was usinç a
quality program or not.
An esamination of buyers' attitudes and selection intentions ratings across apparel firnl
categories showed the apparel manufacturers to be most inclined toward a registered
vendor (mean of 3.1 among 4.2, 3.9 & 5.5). and for selecting that vendor as a business
partner (mean of 3.0 arnong 3.3, 3.7 and 5.0) (table 19). However. the manufacturers
appeared to be averse to giving up on a domestic non-registered vendor for an overseas
registered vendor (mean of 4.9).
Retailers, on the other hand, were found to be the most inclined toward an oirer.seus
registered vendor over a domestic non-registered vendor (mean of 3.0 arnong 4.4. 4.4 &
5 3 , and also the most willing to select an overseas registered vendor for business over a
domestic non-registered one (mean of 3.4 arnong 4.9.4-1 & 6.0).
The wholesalers' responses indicated no preference toward a registered vendor. whether
in general or if located overseas. Responses by the two importers showed that they were
the least favorable toward a registered vendor over a non-registered one from the other
categories of apparel firrns.
Results also indicated that buyers from firms using a quality prograrn were more willing
to select the registered vendor than were those from firms without a quality program
(means of 3.1 and 3.8. respectively) (table 20). However, buyers from most of these
firms did not agree that a firm registered to ISO 9000 is better than one without
registration. This is understandable. considering that the majority of the firrns in this
group were using a quality prograrn other than ISO 9000.
Results also showed that it was buyers from firms that were not using quality programs
who had comparatively more favorable ratings on their attitudes toward registered
vendors. However. their ratings. representing attitudes as well as selection intentions. did
not reflect a preference and were dose to neutral.
Table 20. Cornparison of Means between Importance of ISO 9000, Knowledge of ISO 9000 and Use of Quality Programs with Attitudes and Selection Intentions
1 1 1
( Yes 1 NO 1 2i.55 ] <5.55 ) - >5 1 <5
Attitude and Selection intention statements'
I
Use of quality program'
ISO 9000 registered vendor better than a non-registered vendor Overseas ISO 9000 registered vendor
Importance of TSO 9000'
4.1
betier than a domestic non-registered vendor Would select an ISO 9000 registered
registered vendor over a domestic non- ( (1 0 ) 1 (14) 1 ( 10) 1 ( 1 1) 1 ( 1 3) 1 ( 1 1)
Knowledge of ISO 9000'
(11) 4.5
vendor over a non-registered vendor Would select an overseas ISO 9000
reg istered vendor 1 1 1 ' ~ a i i n ~ s were on a 7-poini reverse scale, ivilh values l a s than 4 (netrrrall representing more fmoroble
3 -6
(11)
3.1
responses. "igures in brackets are the nurnber of bziyers who responded to this question.
(14) 4.1
(10) 4.3
5.7.2 Importance of ISO 9000 and Knowledge of ISO 9000
High 4.3
(11)
3.8
Buyers' ratings of the benefits attributed to ISO 9000's importance were divided into
(13) 4.4
-1ow' and 'high' importance groups using the median value of 5.55 as the cutoff point'h
Low 3 -7
( 1 1) 4.8 ( 9)
4.4
so that a -cornpurable number of slrbjects in each grolip' were available for the analysis
H T ~ ~ 1 Low 3.7 3.9 (1;) 4.1
(10) 4.0
( 9 ) 4.7
(Finlay & Finlay, 1996:65). Surprisingly. the results showed buyers from the 'low' group
(12) 4.5
( 1 0)
2.9
(< 5.55) to have given comparatively more favorable ratings on al1 four statements
(1 1) 4.2
measuring their attitudes and selection intentions (table 2G).
(12)
3.6
Two groups classified as having 'low' and 'high' Ievels of knowledge of ISO 9000 were
created using a cutoff point of 5, the mid-point of the scale. Buyers had been instructed
that being knowledgeable would require knowing some erernents of ISO 9000. Thus.
(10)
3 -4 (12) 4.8
16 N values for the two groups were more comparable if the median rather than the mean was used as the cutoff point.
8 6
(1 1 ) 3 -8
their ratings on either side of the mid-point qualified them as having 'low' or -high'
knowledge levels. Results indicated that buyers in the 'high' knowledge level group
were comparatively more favorable in their attitudes toward registered vendors (table 20).
However, the related ratings did not reflect a strong preference. and were close to neutral.
Surprisingly, buyers from the -highY knowledge level group were comparatively less
inclined to select a registered vendo. especially an overseas registered vendor. than those
fiorn the -low' level group.
5.8 Discussion
A discussion of the results and an overall summary of the major findings in relation to the
two research questions and their sub-questions (as listed at the end of Chapter 3) foilow.
5.8.1 Research Ouestion 1 : Are Buvers Influenced bv ISO 9000 in Vendor Selection?
1SO 9000's influence on apparel buyers in vendor selection was examined using two
methods, both which suggest Siat a vendor's registration to ISO 9000, especially one
located overseas. is likely to have little impact on these buysrs during vendor selection.
Firstly. ISO 9000's use as an overseas vendor critenon by apparel buyers as a group did
not appear to be likely. Registration to ISO 9000 was not considered as an important
criterion during vendor evaluations. It also ranked lowest relative to other vendor criteria
of importance to buyers.
Secondly. ISO 9000's influence as an information cue on buyers' attitudes and selection
intentions toward registered vendors was minimal. Additionally, even this slight
influence of registration diminished when the registered vendor was identified as being
87
located overseas. These findings indicate that buyers may be less likely to rely solely on
a vendor's registration to ISO 9000 when making selection decisions. They also indicate
that registered vendo-s located overseas in particular. should not expect to gain business
advantage based on their ISO 9000 registration alone.
Results of ISO 90003 influence in buyers' vendor selection as obtained in this study
were disappointing overall. However. in the analysis of the four factors as determinants
of buyers' response to ISO 9000 registration there were some encouraging findings.
Nevertheless, a preference for the ISO 9000 registered vendor. wherever mentioned. is
based on responses that were at best moderate, and likely to be conditional upon certain
requirements being fulfilled. More details are included in the following sub-section.
5.8.2 Research Question 2: Do Certain Factors Determine How Buvers Respond to ISO
9000 in Vendor Selection?
Findings with regards to the four factors that were examined in this study, i.e. category of
tim, use of quality programs, knowiedge of ISO 9000, and importance of ISO 9000 are
presented here.
5.8.2.a. Category of Firrn
Some differences in buyers' responses ro ISO 9000 in vendor selection were found
according to whether they represented apparel manufacturers, retailers or wholesalers.
These are explained separately for each apparel firm category.
Firstly, among al1 apparel firm categorïes. the apparel manufacturers' response to ISO
9000 in a vendor was the most promising. This apparel fim category was comparatively
more knowledgeable about ISO 9000's elements. Manufaciurers were pan of the group
of firms using quality programs. including ISO 9000. They gave the highest importance
to ISO 9000 for leading to the ten benefits used in this study. especially those that
represented the competitive advantages from iSO 9000.
In terms of ISO 9000's influence on rnanufacturers in vendor selection. this apparel firm
category rated the criterion. registration to ISO 9000. as important in a vendor during
evaluations. However, it was the criteria relating to quality of first samples. competitive
prices, flexibiiity and responsiveness that were initially sought by the manufacturers in a
new vendor. Of the three apparel firm categories. the manufacturers were also the ones
most favorable toward, as well as the ones most willing to select. registered vendors
when location was not identified. However, results suggest that oversens vendors
wishing to supply to the manufacturers should not rely on marketing their registration to
secure business from their Canadian counterparts.
The second apparel firrn category, the retailers. was aIso part of the group of t ims that
were using quality prograrns. However, the retailers were less knowledgeable about ISO
9000's elements. and were less in agreement about ISO 9000's importance for leading to
competitive advantages for a vendor. However. they did appear to be favorable toward
registered vendors. including overseas registered vendors in vendor selection. The
retailers' preference for the ISO 9000 registered vendor, regardless of location. suggests
the more global as weIl as aggressive nature of this appareI firm category's business.
However, like the manufacturers. ISO 9000 registration was also not among the priority
vendor criteria for the retailers. They were more concemed with a prospective vendor
fulfilling the criteria relating to quality of first samples. competitive prices, merchandise
fashionability. low minimum quantities and prompt supply of quotations.
Lastly, buyers representing the intermediaries. the wholesalers and importers (although
represented by the firms using quality prograrns in the survey) were Iess knowledgeable
about ISO 9000's elements and less convinced about its benefits in leading to competitive
advantages for a vendor. Additionally. they did not consider ISO 9000 as an important
vendor criterion and were unaffected in their attitudes and selection intentions toward a
vendor by the presence of ISO 9000 registration.
One possible explanation for the differences in response to ISO 9000 by category of finn
could be the size of the firms belonging to each category. More large apparel
manufacturers were represented in the sample than is true of their distribution in the
Canadian apparel industry. Also, the majority of the wholesalers in the survey were
srnall (less than 25 employees). From the results. size was found to determine the use of
quafity programs by firms. Accordingly. whereas more than half of the manufacturers
were using quality prograrns, only one third of the wholesalers were involved with thein.
It must be noted however, that the proportion of retailers using quality prograrns was also
one third. Yet, buyers representing this apparel finn category were comparatively more
responsive to ISO 9000 than those from the wholesalers' category.
A second explanation for the varied response towards ISO 9000 could be the inherent
differences in the organizations that these three apparel firm categories represent.
Differences in how their respective organizations function- their relationships with their
vendors. their concems about their own organizations' competitiveness. Company
policies, etc.. could affect how buyers employed by them view a quality system.
90
5.8.2.b. Use of Quality Programs
Some differences in buyers' responses to ISO 9000 in vendor selection were also found
according to the use of quality prograrns in the firm by which they were ernployed.
About one third of the firms in the sample were using quality programs. the majority of
which (69%) seemed to be quality control measures. Buyers from firms that used quality
programs appeared more willing to select a registered vendor. However. responses in
this regard. although positive and directional, were moderate.
An explanation for only a moderate response could be the levez of the-quality programs
that these apparel buyers are exposed to in their fims, Le., representing mostly quality
control (QC) measures. Quality initiatives at this level are the responsibility of one
department alone and are not company-wide initiatives such as those associated with an
ISO 9000 program. Consequently. although ISO 9000 was rated important as a quality
standard for leading to certain benefits, it is possible that the contribution of the quality
standards to organizational improvement, customer satisfaction enhancement and
cornpetitive advantage was not fully understood. Thus. apparel f ims practicing mainly
QC measures were not too enthusiastic about the use of [SO 9000 by their vendors.
This study also found that buyers from firms using ISO 9000 in particular were the ones
who gave a vendor's registration to ISO 9000 or use of another quality program
importance in evaluations. However. buyers from these firrns represented a minority in
the sample. It is possible that apparel firms using QC measures consider the ISO 9000
quality system as a costly alternative to their own in-house versions and have not sought
registration for this reason, and sirnilarly do not expect ISO 9000 registration by their
vendors.
5.8.2.c. ffiowledge of ES0 9000
Although fmiliarity with ISO 9000 among Canadian apparel finns was evident from the
background investigation, the extent of this farniliarity. Le. whether it involved
knowledge of the elements of ISO 9000 or not among buyers was found to be low. The
average buyer descnbed hiniherseIf as less than knowledgeable of the elements of ISO
9000.
An examination of knowledge of ISO 9000 as a factor in determining buyers' responses
to ISO 9000 in vendor selection showed conflicting results. The study found buyers in
the 'high' versus ' low knowledge group to have comparatively better attitudes toward
registered vendors, but to be comparatively less inclined toward selecting those vendors
for business.
One explanation for these results could be that buyers' self-assessments of their
knowledge of ISO 9000's elements were not accurate and that buyers could have over-
estimated their knowledge. Additionally, what the term knowledge actually means was
not explained to buyers beyond just 'knowing' some elements of ISO 9000. Thus, buyers
may have understood knowIedge to mean variediy as knowing the elernents by name or
knowing what is required under each element. Future research should use an objective
standardized measure to determine buyers' knowledge of ISO 9000.
5.8.2.d. Importance of ISO 9000
Results from the quantitative survey indicated that most Canadian apparel buyers agreed
on the importance of ISO 9000 for leading to the benefits relating to improvements in
intemal processes, increasing customer satisfaction, and marketing and competitive
92
advantage. However. a mean score rating of 6.5 on a 9-point scale was the maximum
importance any of the benefits received by the buyers as a group. Benefits relating to
reduced defects. improved customer satisfaction and higher perceived quality were
ranked the highest. Those relating to competitive advantage from ISO 9000 were ranked
the lowest.
An examination of the role of buyers' beliefs about the importance of ISO 9000 as a
deterninant of their responses toward registered vendors produced results contrary to
what was expected. From the two groups of buyers ('low' and 'high' importance), it was
those giving little importance to ISO 9000 for its benefits who were found to hold
comparatively more favorable attitudes and selection intentions toward registered
vendors.
One explanation for these results could be buyers' understanding of the outcornes of
registration to ISO 9000. Tt was reported earlier that most buyers were less than
knowledgeable of ISO 9000's elements. i.e., they were not h l ly aware of the scope of the
quality standards. Thus, it is possible that these buyers remained unconvinced about the
effectiveness of ISO 9000 as a quality standard. Also possible is that negative beliefs
held about other aspects of ISO 9000 registration (for example. the costs or papenvork)
could have outweighed perceptions of its benefits. Determining these negative beliefs.
and their weight in buyers' overall perceptions of ISO 9000, is a subject for future
researc h.
A second explanation could be the benefits themselves that were included in this study.
The benefits used to measure buyers' perceptions of ISO 9000 were those reported by
registered firms and quality experts. It is possible that these benefits do not represent
93
those that buyers associate with ISO 9000 registration, and are not those which buyers
have in mind when considering a vendor with ISO 9000 registration as a business partner.
This would explain why buyers who rated ISO 9000 important for the particular benefits
provided in the study were not those to have been influenced by it in vendor selection.
The above findings suggest that the category of firm and firm's use of a quality program
may be two factors that determine buyers' responses to ISO 9000 in vendor selection.
However, the related findings were not substantiated by tests of significance, and further
research examining the role of these two factors is needed. Additionally. findings from
this study indicate that buyers' responses, wherever even sliçhtly positive toward the
registered vendor. take a tum for the worse when the vendor in question is identified as
being located overseas. ISO 9000 registration's usefulness for overseas vendors as a
means to gain business advantage thus remains questionable.
6: CONCLUSION
This study of ISO 9000's role in buyers' vendor selection was designed to clarify the
usefulness of ISO 9000 registration as a means to gain business advantage for vendors
supplying to the Canadian apparel sector. The focus of this study was ISO 9000's
usefulness for overseas vendors in particular. Conclusions d r ~ w n from two research
questions addressed in this study are as follows.
The first research question examined whether Canadian apparel buyers are influenced by
ISO 9000 in vendor selection. Specifically. die study looked at whether ISO 9000 was
used as a criterion by buyers in overseas vendor evaluations, and whether ISO 9000's
presence influenced buyers' responses toward a registered vendor. as well as its overseas
counterpart in a vendor choice situation. It was concluded that Canadian apparel buyers
as a group are not likely to be influenced by ISO 9000 in an overseas vendor during
vendor selection. ISO 9000 registration was not used as a criterion by buyers in their
overseas vendor evaluations. and it did not appear to be enough to give an overseas
registered vendor a business advantage over a domestic non-registered counterpart.
A second research question exarnined whether certain factors detemine how buyers
respond to ISO 9000 in vendor selection. Two factors, category of apparel firm (whether
manufacturer or retailer) and firrn's use of quality prograrns were identified as potential
determinants of favorable responses to ISO 9000. However. favorable responses in
relation to these factors seem likely to be conditional upon certain requirements being
fùlfilled. For exarnple, it appears that a positive response to ISO 9000 from
manufacturers or retailers is likely only if registered vendors have first met the other
vendor criteria of importance to them. Also, a positive response to ISO 9000 seems 9 5
likely from buyers employed by firrns that are following the ISO 9000 quality system
specifically. Lastly. a positive response towards an overseas vendor's registration to ISO
9000 in a vendor choice situation seems likely only from retai1 buyers. but again after
other criteria are first fiil filied.
Overall. it appears that ISO 9000 registration plays a weak role in Canadian apparel
buyers' vendor selection, and that overseas vendors supplying to the Canadian apparel
sector are not likely to gain business advantage from their registration. It should be
noted, however. that the above conclusions are tentative. This study was a preliminary
investigation of ISO 9000's usefulness in the Canadian apparel sector with findings being
based on the responses of a small group of apparel buyers. Further research in this area is
needed to validate the findings.
6.1 Recommendations for Future Research
Future research should build upon the findings from this study using a larger sampIe of
apparel buyers. The technique of 'snowballing' may be useful to increase responses
(Lehmann, et al.. 1998). It would involve including additional copies of the
questionnaire in each mailed package and asking each buyer to pass on copies to other
buyers who fit the study's terrns of reference. Alternatively, the ISO 9000-related
opinions of al1 members of a buying tearn who have a role in vendor selection can be
examined. How a quality technologist's or an engineer's responses to a specific
registered vendor differ from the buyer's would be useful from a marketing perspective,
so that vendors can promote their ISO 9000 registration accordingly. Additionally, which
of the vendor cnteria in buyers' or quality technologists' opinions are addressed by a
9 6
vendor's registration to ISO 9000 should indicate the areas to promote when marketing
registration.
ISO 9000 registration's likely influence in vendor selection should also be examined for
an existing vendor. This study investigated buyers' responses toward a new vendor
registered to ISO 9000. It is possible that the importance of a vendor's registration is
more evident to buyers after they have had experience working with both registered and
non-registered vendors. Buyers' preferences toward their vendors. both registered and
non-registered. and their inclinations to direct new or repeat business toward them would
indicate the usefùlness of ISO 9000 in gaining business advantage.
Future research should also determine buyers' beliefs about the benefits attributed to ISO
9000 in order to examine possible correlations between their beliefs and subsequent
attitudes toward registered vendors. This study included only benefits that registered
firms reported, which were then used to examine buyers' beliefs about ISO 9000's
importance. It is possible that certain benefits registered firms have reported are not
indicative of the benefits that buyers associate with ISO 9000 registration. Detemining
what benefits buyers link with ISO 9000 and measuring their beliefs based on those
benefits. would provide a more accurate indication of the importance they attribute to
ISO 9000.
6.2 Contributions of the Study
6.2.1 Theoretical
This research makes three contributions to the academic literature on ISO 9000. Firstly.
this study has extended the findings in the literature that relate to the potential business
97
advantage from ISO 9000 registration. It has provided. to an extent. the 'hard facts' on
ISO 9000 registration and iîs reported benefits that quality experts and quality gurus have
been requesting to substantiate the anecdotal data available.
Secondly, this research has offered a buyer's perspective on the value of ISO 9000
registration in a new vendor. The predominant focus of past studies on ISO 9000 and its
potential impact on business has been the registered firms alone. In so doing? this study
has served to close the gap in the related literature. Findings from this study indicate that
buyers' opinions on ISO 9000 in a vendor are necessary to learn more about ISO 9000's
usefulness in matters of trade. Although benefits reportedly experienced by registered
firms cannot be denied, it is clear from this study that certain benefits. especially those
related to trade. may not be applicable to firrns in al1 industries. The importance of future
research on ISO 9000 and trade advantages based on buyers' (or even other customers of
firrns) perspectives has thus been established from this study.
Thirdly, a questionnaire was specifically developed and used as the research instrument
for the quantitative survey on ISO 9000 in this study. This questionnaire was used to
collect information on buyers in relation to both vendor selection and quality prograrns.
Future studies examining buyers' responses in either of these areas have a data collection
instrument which may be used as a starting point and modified as needed, or used in its
current forrn.
This study also contributes to the industrial marketing literature that deals with industrial
buyers and vendor selection. Additionally. it serves to extend the research that is
available on importer behavior in organizational buyer behavior literature.
6.2.2 Managerial
A list of vendor criteria of specific importance to Canadian apparel buyers involved with
importing was generated in this study. This list has practical value for both the overseas
vendors interested in supplying to this industry as well as to the Canadian apparel buyers
who are new to overseas sourcing.
For the overseas vendor. the emphasis on the criteria related to price. quality. flesibility.
responsiveness and verbal communication as an organizational strategy is revealed. For
exarnple. overseas vendors can take note of the importance apparel buyers place on their
responsiveness with regards to quotations and lead times for delivegr. Vendors can, for
exarnple. make it a company-wide policy that quotations are sent out within 24 hours.
They can also make arrangements with textile mills to stock fabnc for them and thereby.
offer shorter lead times to their buyers. The emphasis on language skills and good
communication should also be recognized by overseas vendors. Managers must ensure
that representatives in the export department have a sufficient grasp of the English
language to ensure efficient day-to-day correspondence and accurate cornprehension of
orders.
For the buyer. the vendor cnteria list serves as a guide. A check with the Department of
Foreign Affairs in Ottawa found that no importers guide existed for buyers. although an
exporters' guide was available. Vendor selection criteria of importance identified in this
study are those used by Canadian apparel buyers experienced with importing. Therefore.
this list c m serve as a reference point for buyers new to importing and couId be included
in an apparel importers' guide, if one were to be published in the fùture.
6.3 Implications of the Study
6.3.1 Implications for ISO 9000 Training and Education
Apparel buyers in the study did not appear to be convinced about the improvernents that
result from implementation of ISO 9000 in a vendor's fim. One possible explanation
was their limited knowledge of the ISO 9000 system. With this in mind. two suggestions
to improve buyers' responses toward B O 9000 are made. Firstly. the ISO 9000 training
and education programs should dernonstrate to buyers where and how ISO 9000
implementation affects a vendor's organization. Industry-specific examples should be
used for this purpose''. Secondly. vendors should promote their ovin registration by
educating buyers about the areas where ISO 9000 has impacted their businesses.
Vendors should emphasize those areas that are known to be of concem to buyers. This
information c m be conveyed via Company brochures, websites and/or during persona1
meetings.
6.3.2 Implications for ISO 9000 as an Information Cue
This study's examination of ISO 9000's influence as an information cue on buyers'
attitudes and selection intentions was based on a related investigation undertaken by
Pacheco in 1997. Pacheco's (1997) study led him to conclude that ISO 9000 could not
ovzrcome the negative perceptions associated with products fiom registered firms in less
developed countries. This study also found that ISO 9000 could not improve buyers'
responses toward registered vendors located overseas. It is possible that 'overseas' in this
l7 See Marinka Rainville's article for similar examples (Rainville, 1984). 1 O0
study represented the less developed countries to apparel buyers. Although an increasing
percentage of apparel-related imports into Canada are being sourced from developed
regions. the rnajority are still sourced from low cost countnes ('Clothing Industry (SIC
21) Imports'. 1998). Thus. buyers' responses toward overseas registered vendors may
have been affected by the country fi-om which they would probably have imported the
products.
There is also the possibility that firrns have a preference for a vendor that is within close
proximity or one that is Canadian, explaining why responses toward the overseas
registered vendor were less favorable.
In any case, it appears from both studies that ISO 9000's presence in a vendor choice
situation is not enough to influence buyers' responses in favor of the overseas vendor. It
is possible that the validity and reliability of the conclusions based on buyers' responses
to ISO 9000 as a cue in a vendor choice situation may be questioned. This study found
support for such a conclusion in rnost appareI buyers' disregard for ISO 9000 as a vendor
criterion in evaluations. However. Future studies should investigate whet her conclusions
based on responses to cues in a vendor choice situation are realistic. and whether buyers
acîually rely on such short-cuts in their decision-making.
6.3.3 Implications for Registered and Reristering Vendors
Vendors, whether registered or seeking registration. should realize that the usefulness of
ISO 9000 as a marketing tool might Vary by industry, and also with the specific buyer
within an industry. In t e m s of the former, findings from this study suggest that ISO
9000's usefulness to gain new business within the Canadian apparel sector is
101
questionable. In terms of the latter. this study found that a p p e l buyers representing
manufacturers and retailers as opposed te wholesalers appeared to be the most responsive
to ISO 9000 in a vendor. Vendors, especially those overseas. rnust realize that the
success of ISO 9000 as a means to secure business from any of these buyers may be
conditional upon the pnor fuifilIrnent of other requirements.
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Thaver. Ayaz, persona1 communication, (October, 1999).
"The Canadinn Apparel Industry," http://strategis.ic.gc.ca/SSG/ap03 193e.htm1, Consumer Products Industries Branch, Industry Canada (1 999).
-'The Clothing Irtdustty (SIC 34): APPARENT CANADIAN IMARKET," http://strategis.ic.gc.ca/SSG/ap03 194e.html. Consumer Products Industries Branch. Industry Canada ( 1998).
"The ISO Survey of ISO 9000 and ISO I4OOO Cerf zficat es-Niitrh cycle: upro and including 3 1'' December 1999," http://www.iso.chliso/en/iso9000 14000/pdf/ survey9.pdf. ISO Central Secretariat, Geneva, (2000).
-'The View fiom Jarvis Street: An interview w i h Ed Matier - VP, Sears Canada." Canadian Apparel, 23 ( 2 ) ( 1999).
"The Wholesale Trade Industïy: Quickfacts," http://strategis.ic.gc.ca/SSG/dmO 1322e.htm1, Industry Canada-Service Industries, (200 1 ).
Thorelli, Hans B. & Aleksandra E. Glowac ka. "Willingness of American Industrial Buyers to Sowce Intemationally." Journal of Business Research. 32 (1 995), 2 1-30.
Wagner. Janet, Richard Ettenson & Jean Parrish. "Vendor Selection Among Retail Buyers: An Analysis by Merchandise Division." Joiirnol of Retailing, 65 ( 1 ) (1 989). 58- 79.
Weber. Charles A., John R. Current & W.C. Benton. 'Vendor selection criteria and methods," Ezlropenn Journal of Operational Research, 50 (1991). 2-18.
"ÇYhat is ISO?" http://www.iso.ch/infoe/intro.htm, (200 1 ).
-' W h t ivill huppen to the 19% versions of ISO 900 1. 9002 a n d 9003 ?" - Frequently Asked Questions (FAQs).' http:///www.bsi.org.uk/iso-tc 1 76-sc2FAQs. htrnl.. (200 1 ).
" What will happen ro the orher srandards und documents Nt the czrrrent (1 994) /SO 9000 fumiZy?" 'Frequently Asked Questions (FAQs),' http://www.bsi.org.uk/iso-tc 176- sc2/FAQs.html., (200 1).
" Wholesale !rade," http://www.statcan.ca:80/Daily/English/0 l0220/d0 10220a.htm. The Daily. (February, 200 1 ).
Wilson, Steven R.. --The Impact of Standards on Industrial Development and Trade." Quulity Progress, 32 (7) (1 999), 7 1-75.
Winco, K.C. Yung, "The values of TQM in the revised ISO 9000 quality systern." Internutional Journal of Operations a n d Producrion Manrrgrmenr, 1 7 (2) ( 1 997), 22 1 - 230.
Withers. Barbara & Maling Ebrahirnpour, -'Does ISO 9000 Certification Affect the Dimensions o f Quality Used for Competitive Advantage." Ezrropean Jow-nul of Munagement, 18 (4) (2000), 43 1-443.
Zuckerman, Amy, "Imminent ISO 9000 revisions are Iikely to please buyers," hap://www.proquest.urni.com. Purchusing, 1 28 (5) (2000). 3 0-32.
Appendk A: ISO 9000 Fact-Finding Surveys
[ 1 Title 1 Author (where 1 Journal
[ 1 ISO 9000 certification in 10 1 1 1
( ( reveals significant gains for I I
Survey provides 'snapshot' of
I 2 3
given) Tirn Eddy 1 ISO 9000 NEWS
ISO 9000-registered companies are twice as profitable
countries NZ registrar-s ISO 9000 survey Australian ISO 9000 survey
4
ISO 9000 NEWS
ISO 9000 NEWS Tim O'Brien ISO 9000 NEWS
1 in 90% of ISO 9000 businesses
certified organ izations Customers see improved quality
Attitudes of "Captains of Industry" towards ISO 9000:
ISO 9000 NEWS
l 6 l Japanese survey: ISO 9000 ascending in the Land of the Risino Sun
Chikafumi Morita ISO 9000 NEWS
1 9 1 An ISO 9000 tour of the Asia- 1 Mr. Sohrab 1 ISO 9000 NEWS
8
9000 motivation. says British survey
Research study by MORI Survey reveak British transport industrv attitudes to ISO 9000
10
ISO 9000 NEWS
Pacific region Business efficiency is key ISO GO 9000 NEWS
Appendix B: Vendor Criteria Pretest Cover Letter & List
[Pretest Judge] [COMPANY] [COMPANY ADDRESS]
October 1''. 1999.
Dear Sir,
I am a graduate student in Consumer Studies at the University of Guelph. and am currently preparing a questionnaire which will evaluate the critena that buyers believe to be important when selecting a new overseas vendor.
A major part of developing this questionnaire is compiling a list of criteria important to buyers when selecting a new vendor. Inclusion of relevant criteria that are clearly understood by apparel buyers is an essential foundation for this study.
The purpose of this letter is to ask for your help in finalizing the list of vendor selection criteria. 1 have encIosed with this Ietter a list of potentially useful criteria and would appreciate comments on the items on this list. Please add. modify or delete items as you see appropriate.
Should you have any questions please do not hesitate to contact me or my advisor, Dr. Anne Wilcock. Please fax your comrnents to my attention at (5 19) 824 1964.
Thank you for your assistance. 1 look fonvard to hearing back from you soon!
Ismat Thaver Graduate Student ( 5 19) 824 4 120 Ext, 8567 [email protected]
Anne Wilcock. Ph.D. Associate Professor ( 5 19) 824 4 120 Ext. 3824
Overseas Vendor Selection Critena ('d' Important or -X' Not important)
Price Mark up Quality
Quality practices Delivery
Geograpical location
Financial position
Position in the industry
Performance history Merchandise fashionability Production facilities & capacity Technicial capability
Management & organization Communication system
Operational controls
Warranties & daim policies Packaging requirernents Procedural cornpliance
Labor relations record Repair service
Attitude
Desire for your business
Impression
Ofiers cornpetitive prices - The ability to meet qualiiy specifications consistent@
- u' The abiliw to meet specij7ed delivery schedules 4
Financial posi f ion und credii Rat ing \/
The position in the indusrry (including prod~ct leadership and reputa lion) d - 4 - d
- Reliubility of prodzrct Has technical ahiliiy Delivers qualis rnnteriul - The communication systern (w ith in formation on progress data of orders) d The operut iond controls (including reporting, qziulity control, and inventory control systems) ofeach vendor 4 - d Packuges properly d Cornpliance or likelihood qf'complinnçe wilh Your procedures (both bidding & operuring) d - 4 The repair service likely ro be given by each vendor- 4 The attitude ofeach vendor towardyozw organ izat ion 4 The desire for your business shown by euch vendor d The impression made by each vendor in persona2 contacrs with you d
Long term cornmitment Flexibility Vendor 's w illingness to negot iute price
Will stock special items
Responsiveness
Competence
Responds qttickly to prohlems related to the pzrrchase 1s hefpfiil in emergencies Supplies quo f ations prompti'y HundZes r-ejec fions promptly Competence of service representutivr Vendor experience in buyer S standards Anficiputes bziyer 's reqztirements Delivers per instrzrctions Itlaintains good records Delivers at qztoted prices Ships order quanfities accrtrafely Invoices correctly
Trust 1s sincere in desire to serve Keeps promises
Accessibility klakes the ir managers accessible Compatibility of goals - Adaptability to the buyer -
Additions & Modifications
Criteria heading Criteria
Appendix C: Interview Guideline/Retailer Representative
Mr. Awind Patel
14ugust 11,1999
A- Resoondent backcround
1. How many years have you been with S e m and what has been your position?
B. Retail Industrv-General TSTATISTCS - COMPETITIVENESSl
1 . Do you know who the members of the Retail Council of Canada would be? AIso, do you know who are the 'Wholesalers/Importers'?
2. What are the sectors comprising the retail industry? (Deparmient stores/Discount stores/Specialty stores/ Other)
3 . Who are the U.S and Canadian retailers in Canada? Could you name the major retailers for both groups.
4. What are the major products that the retail industry buys? From the domestic market? From whom? (apparel rnanufacturers/testiJe manufacturers/contractors)? From overseas markets? High end or Low end products?
5 . Compared to U-S retailers what are the major strengths and weaknesses of Canadian owned retailers? How are U.S retailers Iooked upon by the Canadian ones? A threat?
6. Are Canadian retailers generally considered competitive? What can they do to become more competitive? Probe: EDI
Qual ity programs Off shore sourcing
C. Retail Industrv - Apparel [RETAILERS [NFLUENCE ON THE SUPPLY CHAINI
1 . How does a retail chain go about establishing a relationship with a supplier? What are the things they look for? tiow far along the supply chain do they want control over?
2. In your opinion. what expectations do the retailers have of Canadian appareI companies? How does this Vary for Say Wal Marc vs Sears? Probe: EDI? (Vendor Requirements on CAF website) (JO said not many Can. cos. have this)
Price flexibility? Quality programs?
3. Do the above expectations differ for overseas suppliers? Differ by size of retailer? By product? By size of supplier? U.S vs Canadian retailers?
4. In your opinion, have the demands of the retail chains changed the way the domestic apparel industry operates? In what way? Who is affected? Which retail chains have been most infiuential?
5. Have those changes affected the sup~liers ofthe apparel industry?
6. What changes could domestic apparel manufacturers make to better suit the needs of the retail chains?
7. 1s there a trend for 'price conscious' shopping? Does that affect the quality of the product?
D. Retail tndustn, - Irn~orts
1 . Which products are ger,eraIly supplied by irnports. Prompt: High end or Low end. (JO said most apparel importiilg done by retailers. Why not purchase fiom Canada?)
2. What percentage of retailers have overseas offices? 1s there a need?
3. How do retail chains evaluate overseas suppliers? Any specific am-ibutes that corne to mind? Could you rank these attributes fi-om most to least important..
4. Are these attributes different for dornestic and overseas suppliers? If yes, how?
Q U E S T ' N S FOR MY SUR C'E Y
5 . Who in the retail fim's organization is responsible for overseas buying? For overseas vendor selection? Does this differ according to apparel products (e.g nightwear, sportswear lines)?
6 . Are there others who may be equally responsible for overseas purchases. but in different departments? Prompt: Quality controll Stock control/ Purchasing
7. Could it be a team effort or mostIy upto one individual? tf team effort. are different players responsible for different aspects of purchase? (Q.C, Stock Control. etc.)
E. Qualitv Programs
1 . Can you tell me about the Sears Quality Partnership Program. Who is a quality supplier? How oflen is it awarded? Who is it for? Domestic and overseas suppliers? How have suppliers responded?
2. Are there any other quality programs in use by retailers? Can you tell me about them?
3. Do these programs differ according to the size of the retailers? According to Canadian vs U.S retailers?
4. How important is the quaIity program of the supplier of the apparel cornpany for the retailer?
3. How knowledgeable would people at the management level be about quality prograrns? How knowledgeable would the individuals responsible for selecting overseas vendors be them?
4. Who would be rnost knowledgeable?
5, How knowledgeable are Canadian retailers about the ISO 9000 standards? (JO said Sears very involved)
6. Where have they learned about the ISO 9000 standards? Prompt: Serninars organized by the Retail Council of Canada? Other? Magazine articles?
7. What do the retailers think about the ISO 9000 standards? Prompt: Are the ISO 9000 standards considered equivalent to the quality progi-ams of the larger retail chains?
8. Do you believe that investment in quality programs goes together with investment in new technology?
Appendix D: Interview Guideline/Textile Manufacturer Representative
Mr. Eric Barry
August 4,1999
A Role of the Canadian Textiles Institute
1. How long have you been the President of this Institute?
2. How many companies are rnembers of this Institute?
3. Who are these companies? Prompt: Textile firrns, educational institutions, other?
4. What resources are avaiIable to companies wanting to import? Export?
B Canadian textile industrv - characteristics
1 . Could yoü give me an overall description of the textiIe industry sectors. Prompt if needed - The textile manufacturers supply to the apparel/industrial/automotive sectors?
2. How important is the apparel sector for the textile manufacturers?
3. What kind of products are supplied to the apparel sector - low endhigh end?
4. What number of companies in the apparel sector are supplied to and what size are they?
5. How competitive is the textile industry in terms of these sectors?
6. 1s there a large percentage of low cost imports? What types?
3. 1s there a growing trend for retailers to work directly with textile manufacturers for their products? And are many textile manufacturers setting up their own apparel units for that purpose?
4. If yes for question 4 - 1s this mostly for low end or high end products?
5. if yes for question 4 - What kind of requirements do the larger retailers vs the smaller retailers usually have?
C Canadian textile rnanufacturers - characteristics
1 . How are Canadian and U.S textile manufacturers similar? Different? Probe: Are they equal in aggressiveness? In dealing with customers? In offshore sourcing?
2. Did the increase in textile exports since 1989 have to do with any changes in manufacturers' marketing strategies?
3. What expectations do the textile manufacturers have From their suppliers?
4. How do companies evaluate overseas suppliers? Any specific attributes that come to mind?
5. Are these attributes different for domestic vs overseas suppliers?
D influence of retailers
1. Does the government give retailers any incentives to purchase from Canadian rnanufacturers?
2. What kind of requirernents do the larger retailers have on the dornestic textile manufacturers? Probe: Quick Response programs!EDI
3. Would these requirements be the same for offshore rnanufacturers as far as you know?
E Effect of tariff and auota reduction under the Agreement on Textiles and Clothing
1. What effects, if any. do you expect th% Agreement to have on the domestic textile industry?
3. Which categories are a threat to the domestic textile manufacturer in terms of increasing imports?
1 . How knowledgeable are the textile manufacturers about the ISO 9000 standards?
2. Where do the textile manufacturers learn about the ISO 9000 standards? Prompt: Seminars?
3. What are the general beliefs about the ISO 9000 standards?
4. Are many companies planning to adopt the ISO standards in the next few years?
5. Very few textile and apparel companies are presently registered to the ISO 9000 standards. As far as you know are there others who have preferred to just implement the standards without registration?
6. What kind of feedback have you received about the benefits or drawbacks of ISO 9000?
7. In your knowledge why did companies see the need to register? Prompt if necessary
- Customer requirement (domestic or abroad) - To gain cornpetitive advantage over cornpetitors - Policy of company - For irnproved product and improved management pnctices - Potential for access to export markets - For marketing purposes - Self desired -Any other?
7. Aside from ISO 9000. are there any other quality programs in use by the companies? Can you tell me about them? ( For example 1 have corne across a 'Sears Quality Partnership Program.')
8. Do these programs differ according to the size of the company?
Appendix E: Interview Guideline/Apparel Manufacturer Representative
Mr. Jeff Otis
August 10,1999
A Background
Canadian Apparel Industry
1. Firstly, can you tell me about the supply chain in the apparel business. Who are the buyers and the sellers.
Buyers: Retailers Sel lers: Apparel rnanufacturers Wholesalers Contractors
3. About 46% of the apparel market is suppiied by imports. Why is i l so high? Who does the majority of importing? Benefits to industry from imports? Drawbacks?
3. In what ways are the imports controlled? Is there a need? Probe: Quantity? Quality? Specifîc products? By whorn (indirectly and directly)
Canadian Apparel Federation
1 . Whom does the CAF represent? How rnany members?
2. What are some of the major issues that the CAF has been dealing with on behalf of its members?
3 . How long have you been the President of this association?
4. Are there any other issues that you feel are important and will add on to the CAF's agenda while in office? Prompt: quality programs?
5. One specific question - what resources are available from the CAF to companies wanting to import? Export? How are new suppliers sought? Prompt: Supplier directories according to country.
6 . 1 need some other data. Are there any publications that can give me statistics on: - %tage of dornestic shipinents purchased by wholesalers, retailers, etc. - Iatest figures on the number of apparel companies by size - number of contracrors - number of firms with U.S Brands licenses ** i was trying to locate the latest Canmarcket report from the Canadian Apparel
Market Monitor. (The 'Retail Market report')
B Canadian apparel industrv - competitiveness
1. What steps have the apparel cornpanies taken to improve their competitiveness in the domestic market? Export market? Probe - Offshore production plants
Quality proprams Better quality from suppliers Technology
3. Any other things apparel companies couId do to become more cornpetitive?
3. Have any apparel companies formed alliances with textile manufacturers? 1s there a trend towards vertical integration? If yes - Why?
4. For which products are Canadian companies more cornpetitive? What gives thern that advantage?
5. Which irnports may be considered a threat for the apparel companies? What is being done about it?
C Canadian a~pare l rnanufacturers - supplier selection
1 . In your opinion who in the company's organization makes the decisions about purchasing froni a new vendor? 1s this person the same as one who would travel to make the contracts?
2. How do apparel companies evôluate suppliers? Any specific attributes that come to mind? Do companies have a 'supplier evaluation' checklist usually?
3. Could you rank in order of importance.
4. Are these attributes different for domestic and overseas suppliers? If yes, how? Probe - How important are quality programs?
5. In what way would these attributes differ according to: Size of irnporting Company Importing cornpany's buyers Type of product being irnported
6 . What is important in a supplier for long term business with the manufacturer?
D Effect of the Uru~uav Round quota reduction under the Agreement on Textiles 2nd CIothing and tariff reduction
1. Basically, who is worried about the quota and tariffreductions? 1s it a big deal?
2. Who will be the winners and who the losers? Prompt: Apparel rnanufacturers? Their suppliers?
Overseas suppl iers? Canadian consumer?
3. If it's sornething of concem, then what major changes in the apparel industry do you see happening between now and 2005. when the quota eIimination and tariff reduction come fulIy into effect?
E Influence of Retailers
1 . Does the governrnent give retailers any incentives to purchase from Canadian appareI compan ies?
2. What expectations do retailers have of the domestic apparel manufacturers? Do these expectations differ from one retailer to the next? (Large vs Small: U.S vs Canadian) Probe: Quick Response programs/EDI (Sears on website)/QuaIity programs
3. How are the srippliers of those manufacturers affected?
1. Are there any quality programs in use by the companies? Car( you tell me about them? (For exarnple 1 have corne across a 'Sears Quality Partnership Program.')
2. Do these programs differ according to the size of the company? If yes, how?
3. In your opinion, how knowledgeable would people at the management level be about quality programs? Who would be most knowledgeable?
4. I'd Iike to focus on ISO 9000. How knowledgeable are Canadian apparel firms about the ISO 9000 standards?
5. Where have they learned about the ISO 9000 standards? Prompt: Seminars organized by the Association? Private?
Magazine articles? Consultants (STAT-A-MATRIX)
6 . What do apparel companies think about the ISO 9000 standards?
7. Are many companies planning to adopt the ISO standards in the next few years?
8. Very few textile and apparel companies are presently registered to the ISO 9000 standards. As far as you know. are there some who have irnplemented the standards without registration? Probe: Few regist/implem. due to - Small size of cornpany and affordability
Location of company (province. urban/rural) Education ieveI of ernployees Percentage of EnçlishIFrench speaking imrn igrants? Other?
9. What kind of feedback have you received about the benefits or drawbacks of ISO 9000?
10. In your knowledge why did the companies that have registered done so? Prompt if necessary
- Customer requirement (domestic or abroad) - To gain cornpetitive advantage over competitors - Pol icy of company - For improved product and improved management practices - Potential for access to export markets - For marketing purposes - Self discipline - Any other?
1 1. How important is the quality program of the supplier for the apparel company? (How important is it for the apparel company's buyers?)
12. There has been a lot of mention of capital investments being made by the Canadian apparel manufacturers. Iike EDI technology and CADKAM. Why not more investment in quaiity programs?
Appendix F: Cover Letter & Questionnaire
The President [COMPANY] [COMPANY ADDRESS]
January. sth. 1999
Dear Sir/Madam.
1 am a graduate student in marketing management at the University of Guelph. As part of my M.Sc. requirements, I am conducting a survey on Canadian fabric and apparel buyers.
My project involves identifiing the criteria considered important by fabric and apparel buyers as they evaluate potential suppliers overseas. The importance of this research is its focus on the needs of the Canadian apparel industry and its potential to serve as a guide for new vendors hoping to pursue business opportunities in Canada.
The enclosed survey is designed to be completed by an individual who has some authority to select new overseas vendors. We request your assistance in directing this questionnaire to the most appropriate individual in your organization.
The survey wiIl require only about 20 minutes to complete. Please return it either in the enclosed self-addressed envelope or by fax before January 28th, 1999. Al1 responses will remain confidential. A copy of the results will be available upon request. within about 6 months.
Your participation will make ~II important contribution to the success of this study. I t is greatly appreciated!
S incerely,
Ismat Thaver Graduate Student Tel: (5 19) 824 41 20, ext. 8567 Fax: (519) 823 1964
Anne Wilcock Associate Professor Tel: (5 19) 824 41 20, ext. 3824
T?iunk you for taking the time to complete this survey.
meue are five parts to this questionnaire, which focrises on vendor selection and quality programs.
A - BACKGROUND INFORMATION
1. PLEASE INDICATE YOUR JOB TITLE AND THE NUMBER OF YEARS YOU HAVE HELD THIS POSITION.
Department. if appIicable
Number of years
2. INTO WHICH OF THE FOLLOWiNG CATEGORIES WOULD YOUR COMPANY BEST FIT? (CHECK ONE ONLY) (IF MORE THAN ONE CATEGORY APPLIES, PLEASE CHECK THE ONE THAT ACCOUNTS FOR THE MOST)
a) Apparel manufacturer b) TestiIe manufacturer C ) Canadian retailer d) Non-Canadian recailer e) Wholesaler 0 Catalogue 8) Other (please speciQ)
9
J - PLEASE INDICATE WHICH ONE OF THESE CATEGORIES YOUR MAJOR CUSTOMERS BELONG TO. (CHECK ONE ONLY)
a) Canadian retailer b) Non-Canadian retailer C) Wholesaler d) Catalogue e> General public 9 Other (please speciQ)
4. YOUR COMPANY IMPORTS . . . (CHECK ALL THAT APPLY)
. . . apparel Approximate % of total requirement
. . . fabric Approximate % of total requirernent
. . . accessories for apparel Approximate % of total requirement
d) . . . no apparel. fabric, or accessories for apparel
e 1 Company does not import (Please skip to part D if you chose 'e')
5 . PLEASE INDICATE THE PROVINCE IN WHICH YOUR COMPANY IS LOCATED
6. HOW MANY FULL-TIME EMPLOYEES DOES YOUR COMPANY HAVE?
B - VENDOR SELECTION POLICY
In the following questions. vendor is used tu mean anyone ivho is szrpp[ving fabric. accrssoriesfor c~ppw-el, andorjiilished apparel fo your conzpany.
The following questions deal with overseas vendors on@.
7. PLEASE INDICATE HOW MANY OVERSEAS VENDORS THERE ARE IN YOUR TOTAL GROUP OF VENDORS (DOMESTIC + OVERSEAS).
a> None are overseas vendors b) Less than haif of al1 vendors c More than ha1 f of al l vendors d) AI1 are overseas vendors
8. WHAT PERCENTAGE OF THE DOLLAR VOLUME O F YOUR COMPANY'S TOTAL PURCHASES ARE FROM OVERSEAS VENDORS?
9. WHAT MAJOR PRODUCTS ARE IMPORTED BY YOUR COMPANY FROM OVERSEAS? (PLEASE USE AS MANY LIhrES AS NEEDED)
Product SIC code (optional)
1 O. AS FAR AS YOU KNOW. THESE MAJOR PRODUCTS ARE AIMED AT WHICH SECTION O F T H E APPAREL MARKET?
a) High-end M id-range
c > Low-end d) Donr t know e > Not applicable
I 1. THESE MAJOR PRODUCTS ARE MOSTLY IMPORTED FROM . . (CHECK ONE ONLY)
a) . . .developed countries (e-g.. Europe, Canada. US) b) . . .developing. low cost countries (e.5.. Mexico. and
others in Asia. Akica. South America) c) No overseas purchases
13. HOW EASILY AVAILABLE ARE THE VENDORS FOR THESE MAJOR PRODUCTS?
a) Very easiiy available (rnany vendors) 6 ) Not very easily avaiIable (few vendors) c Available with difficulty (select vendors only) d) Not applicable
13. FROM THE LIST BELOW. PLEASE CHOOSE THE O N E STATEMENT THAT BEST DESCRIBESYOUR COMPANY S PURCHASING POLICY FOR THESE MAJOR PRODUCTS:
a) To increase the number o f overseas vendors b) To decrease the number o f overseas vendors c ) To keep the number o f overseas vendors about the
same d) No overseas vendors
C - NEW OVERSEAS VENDOR CRITERIA RATINGS
14. The following is a checklist of overseas vendor criferia thut rr1e hmr compiled. IVe tlndersrand fhaf a single vendor mqv no[ satisfi ail of these criferia. and f h a ~ y u m q have to make prtrchase decisions based on ~hefnifillrnent of some criceria and no[ orhers.
On a scale qf- I f o 9. rvlrere I = Not at all imporîant and 9 = Extremeij intporiarri. pleuse tell 21s the importance fo -vou, of rhe fulfillrnenr of each ofrhe criteriu below,for an orferseus vendor beinq considered for vozcr maior ~rodtrcfs: (Pleme skip fo Parr D, ififvoir have no aperience w i ~ h overseus vendors)
Not at al1 important Extremely important Economic stability in country in which vendor is located 1 2 3 4 5 6 7 8 9
Offering of cornpetitive prices by vendor 1 2 3 4 5 6 7 8 9
Fashionability of merchandise offered (i.e.. vendor independently provides new fabric, style & color ideas j 1 2 3 4 5 6 7 8 9
Technical expertise of vendor 1 2 3 4 5 6 7 8 9
Effective communication system (with information on progress of orders) 1 2 3 4 5 6 7 8 9
Low minimum quantities for products offered 1 2 3 4 5 6 7 8 9
Sound t-nancial position of vendor 1 2 3 4 5 6 7 8 9
Short lead times for delivery (fast cycle times) i 2 3 4 5 6 7 8 9
Supplying of quotations promptly 1 2 3 4 5 6 7 8 9
Being certified to ISO 9000 1 2 3 4 5 6 7 8 9
Being certified to a quality prograrn (other than ISO 9000) 1 2 3 3 5 6 7 8 9
Long t zm commitment of vendor 1 2 3 4 5 6 7 8 9
Will ingness to negotiate prices 1 2 3 4 5 6 7 8 9
Possessing Electronic Data Interchange (EDI) facilities 1 2 3 4 5 6 7 8 9
Quality of first samples 1 2 3 4 5 6 7 8 9
Existence of sufficient export quota to meet orders frorn buyer' s company 1 2 3 4 5 6 7 8 9
Pleasr add a q l other criteria rhal yuu consider irnporrant, and rare the importance of each
D - QUALITY PROGRAMS
Qrrestiom if1 this section perruin CO qzrnli~ programs thar yozrr Company or -voz(r vendor s Company m q be involved wirh. andj~otir opinion of those programs.
15. IS YOUR DEPARTMENT/COMPANY INVOLVED WITH A QUALITY PROGRAM?
No (Please skip to question 18 if you chose
No
16. PLEASE NAME. OR BRIEFLY DESCRIBE THE QUALITY PROGRAM YOU ARE CONSIDERING O R USING.
17. PLEASE CHECK ALL T H A T APPLY:
We are considering o r using the quality program due to . . .
a) . . . our domestic customers' requirements b 1 . . - our export customers' requirements C) . . . our company's policy d 1 Other (please specifi)
The folfotvir~g qztestions are on /SO 9000:
18. O N A SCALE OF 1 T O 9. WHERE 1 = NOT AT ALL KNOWLEDGEABLE AND 9 = VERY KNOWLEDGEABLE, HOW KNOWLEDGEABLE ARE YOU OF THE ISO 9000 QUALlTY ASSURANCE STANDARDS? (CONSIDER YOURSELF 'KNOWLEDGEABLE' 1F YOU KNOW AT LEAST SOME OF THE ELEMENTS OF ISO 9000)
NOT A T ALL KNOWLEDGEABLE VERY KNOWLEDGEABLE
19. ON A SCALE OF 1 TO 9, PLEASE RATE YOUR ATTITUDE TOWARDS A VENDOR IMPLEMENTlNG OR CERTIFIED TO ISO 9000 (ISO), FOR THE FOLLOWING STATEMENTS:
a) A vendor with ISO is better than A vendor one without ISO with [SO is
no better than one without ISO
1 2 3 4 5 6 7 Don't know
b) An overseas vendor with ISO iç better than An overseas vendor a dornestic vendor without ISO with ISO is no better than
a domestic vendor without ISO
1 2 3 4 5 6 7 Don't know
20. ON A SCALE OF I TO 9. PLEASE RATE YOUR SELECTION INTENTION FOR A VENDOR IMPLEMENTING OR CERTIFIED TO ISO 9000 (ISO), FOR THE FOLLOWING STATEMENTS:
a) 1 would select a vendor with ISO over a vendor without ISO
would select an overseas vendor with ISO over a dornestic vendor without ISO
1 would select a vendor with ISO over a vendor without ISO
5 6 7 Don't know
1 would not select an overseas vendor with ISO over a dornestic vendor without ISO
5 6 7 Dont know
21. ON A SCALE O F 1 T O 9, WHERE 1 = NOT AT ALL IMPORTANT AND 9 =
EXTREMELY IMPORTANT. HOW DO YOU RATE T H E IMPORTANCE OF THE ISO 9000 STANDARDS I N . . .
Not at al1 important Extremely important Donf t know
a) . . . establishing a vendor' s credentials as a reliable business partner 1 2 3 4 5 6 7 8 9
b). . . reducing uncertainty about a Company' s performance attributes 1 2 3 4 5 6 7 8 9
c). . . providing ISO 9000 certified companies with comparative advantage over non-ISO 9000 certified companies 1 2 3 4 5 6 7 8 9
d). . . improving management practices 1 2 3 4 5 6 7 8 9
e). . . leading to higher perceived quality of products and/or services 1 2 3 4 5 6 7 8 9
f). . . improving customer satisfaction 1 2 3 4 5 6 7 8 9
g). . . allowing traceability 1 2 3 4 5 6 7 8 9
h). . . reducing defects and wastage 1 2 3 4 5 6 7 8 9
i). . . increasing employee efficiency 1 2 3 4 5 6 7 8 9
j) . . . being an international standard of exce Ilence 1 2 3 4 5 6 7 8 9
3 3 --. ARE YOU WORKING WlTH ANY VENDORS THAT ARE IMPLEMENTtNG. OR ARE CERTIFIED TO ONE OF THE ISO 9000 STANDARDS?
23. ARE YOU WORKING WITH ANY VENDORS THAT ARE INVOLVED WITH A N Y QUALITY PROGRAMS (OTHER THAN ISO 9000)?
24- E - COPY OF SURVEY
Would you like a copy of the survey resuits?
Y es No
I f Yes. please give us your name and address for mailing purposes.
Narne
Address
Thank you for completing the survey!
P h s e retum the survey in the self-addressed envelope provided, or fax it to (5 19) 823 1964, to the attention of Ms lsrnat Thaver or Dr Anne Wilcock.