A National Quality Infrastructure Model for the promotion of

Small and Medium - Sized Enterprises in

South Africa

Test and Measurement Conference & Workshop

28 September 2016

Sam Thema

samt@sanas.co.za

Presentation Outline

Introduction

Background

Problem Statement

Conceptual Framework

Measures

Research Methodology - Overview

Analytical Tools and Procedures

Preliminary Literature Review

Expected Results and Conclusions

Acknowledgements

Introduction

This presentation represents a dissertation proposal for the fulfillment of

the requirements of a doctorate degree in business leadership through the

University of South Africa (UNISA) school of business leadership

The AIM of this study is to develop an appropriate quality infrastructure

framework that can be implemented by SMEs managers/owners and

other interested parties to measure SMEs performance.

Background

Globalization leads to Free Trade Agreements

Free Trade Agreements facilitate globalized Supply chains

Supply chains require harmonized Standards

Standards need correct Measurements

Measurements assures reliable tests

Tests are the basis for Product Certification

Certifiers and Laboratories should be accredited

Accreditation equal Technical Competence

Competence must be demonstrated by global evaluation

Global evaluations ends up in globalized Products

For all this to

happen the

Quality

Infrastructure

(QI)

is needed !!

Background – cont’d

Technical

Infrastructure

Standardization

(SABS)

Metrology

(NMISA)

Accreditation

(SANAS)

National Regulator

(NRCS)

Financial and small Business

Development agenciesRegulatory agencies

COTTI

In South Africa a QI agencies are well positioned within the Department of

Trade and Industry as part of the Council of Trade and Industry

Institutions (COTTI) grouped into three clusters, namely the financial and

small business development agencies, regulatory agencies and the

technical infrastructure

Background - cont’d

South African Perspective !

QI comprised

of four key

Pillars

Accreditation

(SANAS)

ISO 22003

SANS 10330

IAF

ILAC

ISO 17025

ISO 17025

Standardization

(SABS)

ISO

CODEX

Testing

LaboratoriesIntercomparisons

Proficiency tests

Metrology

(NMISA)

BIPM

traceab

ilit

y

- Calibration Laboratories

Certification

Certificate

- products

- processes

National QI SystemCustomer

Product

with

Certificate

Value chains

ISO 9001, ISO 22003, HACCP, etc.

National Standards

International Standards

Calibration of Equipment

Testing, Analysis

Investigation

Reference Materials

International System

Source: Modified and Adapted from PTB

South African National Quality Infrastructure

(can be linked to international system)

Product with

Certificate

Background - cont’d

Background - cont’d

Small and Medium-sized Enterprises (SMEs) on the other hand have the

potential to drive both the economy and provide opportunities for

employment.

Despite this positive contribution, reports indicate that SMEs are still

faced with numerous challenges which inhibit their competitiveness and

sustainability.

Background - cont’d

A Success Story

African Aloe (Pty) Ltd is based in the Western Cape, South Africa.

The company has grown from a small business into one of the biggest

Aloe companies in South Africa.

African Aloe specialise in the manufacturing of Aloe ferox raw

materials, Aloe ferox gels, juices and beverages for the pharmaceutical,

cosmetics and food industries.

African Aloe is currently the only aloe company in South Africa that is

HACCP certified (SABS, SANS 1033:2007

African Aloe has an Integrated EXPORTS and Bioprospecting permit

and is also registered with the U.S. FDA

Adapted from - GLOBAL ENTERPRENEURSHIP MONITOR- GEM (2014)

South Africa’s rate of entrepreneurial activity is very low for a developing

nation – a mere quarter of that seen in other sub-Saharan African

countries.

Unemployment is around 40% of the adult population; despite this, the

number of people starting businesses due to having no other option for

work (necessity entrepreneurship) is low.

Entrepreneurial activity in South Africa, although very low, has increased

marginally over the last 10 years, but in 2014 dropped by a staggering 34%

(from 10.6% to 7%)...

The level of business discontinuance still exceeds that of business start-

ups, resulting in a net loss of small business activity and subsequent job

losses

Background - cont’d

Quality Infrastructure

Metrology

Accreditation

Conformity Assessment

SME

Performance

What are possible interventions that needs to be implemented to enhance

SMEs performance ?

Background - cont’d

What is the Problem Statement for this

study ?

Reference

Muhammad, N.M.Y and Khairu, A.M.A. (2015). Total Quality Management

Approach for Malaysian SMEs : Conceptual Framework”, Vol. 6 No. 1, pp. 152-161.

The problem is that there is no appropriate framework that can be

followed describing a quality infrastructure (QI) as an innovative factor

during the implementation of Small and Medium-sized Enterprises

(SMEs) performance (Huhammad and Khairul, 2015:154)

This study therefore seek to close this research gap by developing

appropriate framework that can be followed describing a QI as an

innovative factor during the implementation of SMEs performance.

What Preliminary Literature Review have

been conducted by the researcher thus far?

A study by Choi, Hyun, Hong and Kang (2014) developed a framework for

assessing national standards capability. The framework draws on total quality

management (TQM) models as its theoretical basis. However, this model can only be

applied to measure the strength and weaknesses of the overall independent variables

of QI against a number of pre-defined dependent variables and no firm performance

or SMEs performance included amongst these depended variables

Reference

Choi, G. D., Hyun, O., Hong, J. and Kang, B. (2014), “Standards as catalyst for

national innovation and performance – a capability assessment framework for

latecomer countries”, Vol. 25 No. 9, pp. 969–985.

Literature review – cont’d

Concepts of the National Standards Capability Assessment Framework (NSCAF) by Choi

et al (2014), is a combination of three pillars: Standardisation, Conformity Assessment and

Metrology and the seven assessment criteria.

Literature review – cont’d

Another recent study by Kafetzopoulos, Psomas and Gotzamani (2015)

identified the following three dimensions of firm performance, namely:

product quality, operational performance and business performance.

Reference

Kafetzopoulos, D.P., Psomas, E.L. and Gotzamani, K.D. (2015), “The impact of

quality management systems on the performance of manufacturing firms”, Vol.

32 No. 4, pp. 381–399.

Conformity

Assessment

Product Quality

Operational

measures

Business Performance

Metrology

Accreditation

H1+

H2+

H3+

H4+

Independent variables

(Quality Infrastructure)

ISO

standards

(Examples:

ISO 9001

ISO 17025

ISO 17020)

Dependent variables

(SMEs performance)

What is the conceptual framework for the study?

Conceptual Framework

Measures

Thirty items as identified below during literature review and these items will be used as

measures the following seven variables (1) Metrology; (2) Accreditation; (3) conformity

assessment; (4) ISO standards; (5) Product quality; (6) operational quality; (7) business

performance.

Variables Items Source

Metrology

Comparability

Traceability

Uncertainty reduction

Gonçalves and Peuckert, 2011

Frenz and Lambert, 2013

Accreditation

Competence

Transparency

Political independence

Gonçalves and Peuckert, 2011

Frenz and Lambert, 2013

Conformity

assessment

Confidence

Reliability

Conformity

Gonçalves and Peuckert, 2011

Frenz and Lambert, 2013

ISO Standards

Harmonization of product and

procedures

Coordination

Continuous improvement

Customer satisfaction focus

Prevention of non-conformances

Gonçalves and Peuckert, 2011

Product quality

Performance

Reliability

Durability

Product quality

Perceived quality

Conformance to specification

Kafetzopoulos, Psomas, and

Gotzamani, 2015

Operation quality

Company’s productivity

Company’s efficiency

Company’s process effectiveness

Company’s competitive advantage

Company’s ability to have access to

new domestic and foreign markets

Kafetzopoulos, Psomas, and Gotzamani,

2015

Business

performance

Company’s profitability

Company’s financial results

Company’s net profit margin

Company’s sales growth

Company’s market growth

Kafetzopoulos, Psomas, and Gotzamani,

2015

Research Methodology - Overview

Identify focus groups and participants

for the interview

Qualitative data collection from focus

groups and personnel interview

Designing of the survey instrument

Collection of quantitative data

Analysis of quantitative data

Phase 1

Qualitative data

Phase 2

Quantitative data

Analytical Tools and Procedures

An ordinary Least Square (OLS) regression method will be used to test if there is

statistical relationship between QI variables and SMEs performance. The regression

model will be developed for each hypothesis testing and be represented by the

following formula:

iji iY = X +

Where is the regression coefficient for variable i in model j, ij

i = 1, 2, 3 and j = 1, 2, 3, 4

i is the error term for regression model j,

11 11Model 1: Independence = (Metrology) +

Model 2: Independence = 12 (Accreditation) + 12

Model 3: Independence = (conformity assessment) + 1313

Model 4: Dependence = SMEs performance = (metrology) + (Accreditation) +

(Conformity Assessment) +

1424

34 14

The regression model will be developed for each hypothesis testing and it is expected

to be represented by the following formula:

Analytical Tools and Procedures – cont’d

Expected Results & Conclusions

It is expected from the results that there would be a positive relationship

between the dependent and Independent variables as indicated by the

regression model. The direction between these variables is expected to be in the

direction as postulated in the model

The study will further argue that lack of awareness on a QI by SMEs

managers/owners may lead to a negative relationship between QI constituencies

(namely: standardization, metrology, accreditation and conformity assessment),

subsequently affecting their business performance.

Furthermore, it is expected that a QI will have a positive influence on SMEs

performance with the direction of influence as postulated in the proposed

conceptual framework

Acknowledgements

The researcher express his deepest gratitude to SANAS management and

colleagues for their continued support and allowing this journey of research and

imagination .

The overwhelming support and advice from the supervisor, Professor Ramphal

from UNISA, is immeasurable and one is looking forward to his future guidance

as one continues to “imagine it and measure it”

Thank You

for your attention