Files
Abstract
Since 2005, the implementation of a traceability system is mandatory to all European food chain operators. The
balance of costs to build and maintain the traceability system and benefits of traceability depends on the firm's
traceability objectives and its resources, as reflected in characteristics, such as adopted quality management
systems (QMS) or firm size. Mora and Menozzi (2005) mention that the cost of traceability is lower when firms
already have a QMS in place. Moreover, US producers exporting to multiple destinations, in particular EU and
Japan, need to comply with more stringent traceability regulations (De Souza Monteiro and Caswell 2004). This
may request the adoption of more sophisticated and costly traceability systems. Food operators tend to have a
good understanding of traceability cost, while performance benefits are usually more difficult to grasp
(Verdenius 2006). This research aims at improving the understanding of how expected and actual costs and
perceived benefits are influenced by firm characteristics (Meuwissen et al. 2003).
This paper proposes a conceptual decision model that incorporates firm characteristics and both expected and
actual costs and benefits of traceability. It is hypothesized that firm characteristics influence both expected and
actual costs and benefits, while the level of traceability is influenced by expected and actual costs and perceived
benefits as well as firms' characteristics. Costs can be divided into implementation and operation/maintenance
costs. Benefits can arise from compliance with regulatory requirements, enhanced recall performance,
improved marketing performance and increased supply chain efficiency (Sparling and Sterling 2004).
The analysis uses a sample of 60 Italian fish processing businesses that were surveyed in 2008. Indicators of
firm's characteristics such as number of QMS certifications, operations complexity, firm size and complexity of
customer requirements, are entered as independent variables in regression analyses to predict expected and
actual costs and perceived benefits which were measured on 90 point semantic scales and constant sum scales.
The findings show that none of the firm characteristics investigated influence costs, while firm size and QMS
certifications influence benefits in different ways. Somewhat surprisingly, firm size was found to be negatively
correlated with expected and actual benefits; i.e. larger firms reported lower benefits both expected ex]ante
and realized ex]post traceability system implementation. Finally, the number of QMS certifications is positively
associated with expected benefits; i.e. expected benefits increase with the number of QMS certifications
acquired by a firm, but no association with actual perceived benefits of traceability was found.