2. Contents of the Training
Introduction to Value chain
– Concept of value chain
– Value Chain Vs Supply Chain
Value Chain Analysis
– Principles and Criteria
– Value Chain Mapping
– Stakeholder Identification & Analysis
Value Chain Development
– Value chain upgrading strategies
– Value chain governance
– Bottlenecks in the value chain
4. Objective of the Training
• To introduce participants to the value chain approach
• To strengthen participants' capacity to designing interventions
around value chain development
• To give emphasis on principles and methodologies of how value
chain is developed and identification of gaps by comparing the
existing situation (As Is) approaches with benchmark (To Be) and
provide technological solutions for the gaps in line with GTP priority
sectors.
• To strengthen the network amongst our university and to the
community presently working in value chain analysis.
5. 1. INTRODUCTION
What do you understand by the term value chain and
value addition? Explain in your own word?
• Ethiopia exports Oilseeds such as Sesame to China and
EU markets, is there value addition by exporters?
• Policy makers/Government officials usually says we
should add value to our export products, what are they
referring to?
6. Introduction
• VC has been already practiced in TVET; as a
matter of fact hundreds of value chain are
developed & many technologies transferred to
enterprises.
• TVET through Technology Accumulation and
Transfer (TeCAT), recently experienced a
tremendous resurgence of interest in
promoting value chains as a way
– to identify technology, add value, diversify
economies, and contribute to Micro, Small and
Medium Enterprise in all sectors.
7.
8.
9.
10. The value chain is a concept which can be simply
described as:
the entire range of activities required to bring a
product from the initial input-supply stage, through
various phases of production, to its final market
destination.
Concepts of Value Chain
11.
12. Concepts of Value Chain…..
• “Value chain” describes the full range of value-adding
activities required to bring a product or service through the
different phases of production, including
procurement of raw materials and other inputs,
assembly ,
physical transformation,
acquisition of required services such as transport or cooling,
and ultimately respond to consumer demand (Kaplinsky and
Morris 2002).
13. Basic concepts in value chains
• A VC is considered as an economic unit of analysis
of a particular commodity (eg. milk) or group of
commodities (eg. dairy) that encompasses a
meaningful grouping of economic activities that are
linked vertically by market r/nships.
• A VC encompasses a set of interdependent
organizations, & associated institutions, resources,
actors, & activities involved in input supply,
production, processing, & distribution of a
commodity.
• The emphasis is on the r/nship b/n networks of
input suppliers, producers, traders, processors, and
distributors.
14. Porter’s Value Chain
“The concept of ‘value chain’ was first described by Michael
Porter’s 1985 best-seller ‘Competitive Advantage: Creating and
Sustaining Superior Performance’
The VC concept started from a business management point of view:
seeing a manufacturing (or service) organization as a system, made
up of subsystems each with inputs, transformation processes and
outputs.
15.
16.
17. Porter’s Value Chain……..
• Porter used the VC concept / analysis to illustrate how
companies could achieve what he called “competitive
advantage” by adding value to a product or service within
their organization
• The concept focuses on the activities undertaken by a firm
(and their interactions)
• The broader system of activities for raw material to
consumption is what Porter referred to as the value
system, with separate VCs for each firm in this system
18.
19. Basic concepts in VC (3)
Business Development Services
• Services that play supporting role to enhance the operation of the
different stages in the value chain and the chain as a whole
– Infrastructural services (market place development, roads and
transportation, communication, energy supply, water supply)
– Production & storage services (input supply, genetic & production
hardware from research, farm machinery services and supply,
extension services, weather forecast, storage infrastructure)
– Marketing & business development services (market information,
market intelligence, technical & business training, facilitation of
linkages of producers with buyers, organization and support for
collective marketing)
– Financial services (credit, saving, risk insurance)
– Policy and regulatory services (property rights, market and trade
regulations, investment incentives, legal services, taxation)
24. Supply Chains Vs Value chains
• The primary focus of SSCs is thus on cost and
efficiencies in supply, while VCs focus more on value
creation, innovation, product dev’t, & marketing.
• While both concepts describe the same network of
companies that interact to deliver goods & services, the
VC is essentially about value.
• The issue is not so much about w/c approach is
superior or preferable, since both can deliver improved
business performance & productivity gains for the
chain’s participants.
25. Contd…SSC Vs VCs
• It must be noted, though, that practitioners often
focus on reducing costs & marginal inefficiencies
in supply at the expense of focusing on
interventions that could lead to bigger additions of
value.
• (It is also worthwhile to note that recent years
have seen a great deal of emphasis and innovation
in the logistics of supply chains.)
26. Value Chain Vs Supply Chain………
• Supply chain” encompass every logistical and procedural
activity involved in producing and delivering a final product or
service, “from the supplier’s supplier to the customer’s customer
” (Feller, Shunk, and Callarman 2006).
• Since the primary focus of supply chains is efficiency, the main
objectives are usually to reduce “friction” (for example, delays,
blockages, or imbalances), reduce outages or overstocks, lower
transaction costs, and improve fulfillment and customer
satisfaction.
27. • A value chain is not the same as a supply chain. A value
chain is about linkages generating value for the consumer.
• A supply chain is about processes of moving and
transforming commodities or products from producers to
consumers.
• While a VC is about generating value for the consumer, a
SSC is about logistics.
Value Chain Vs Supply Chain…Contd
28.
29. Time to buzz
• Discuss for 5 minutes with your neighbour(s)
about the specific characteristics of
Agriculture value chains
30. VALUE CHAIN IN TVET
• In TVET the existing value chain dev’t is done
through analyzing the existing activities (As Is) of
enterprises & Benchmarking international
standards as a basis of identifying gaps/ constraints
to come up with technological intervention.
• The Interventions covers the project-based training
and 100% technology Copying conducted by the
TVET and later on expected to be transferred and
disseminated to the Enterprises/End users.
31. GENERAL PRINCIPLES
Value chain contains at least the following general principles. Value chain
should be:
• Coincided with GTP priority sectors
• Developed cooperatively with different sectors, sub-sectors and with
different expertise at the product and services levels.
• Supported and coordinated with TVET and governmental and non-
governmental concerned organizations.
• Development focuses on technology identification in order to ensure MSE’s
competitiveness.
• Mapped with actual AS IS value chain and To Be (Benchmarked )with
international best practices.
• Upgraded based on the latest trends of technologies.
• Validated, Documented and reported to concern organization
32. VALUE CHAIN DEVELOPMENT APPROACH
Generally we use value chain development approach as technology
identification and in the view of the following advantages;
• Helps to find out a number of technologies from one developed
value chain at a time;
• Since value chain should be developed with the involvement of
stakeholders it helps to acquire feasible and viable technologies
• Value chain development is a better way to gain practicable
technologies.
• The identified technologies surely increase the productivity of
enterprises, the reason that technologies are tested and
productive in the benchmarked.
• Benchmark shows the gaps how far the existing situation, so
that this approach facilitates technology copying.
• The technologies identified through this approach helps to create
employment opportunity and income for those who are
engaged in technology copy and multiply.
33. BENEFITS/ IMPORTANCE
There are sets of reasons why value chain analysis is important
in this era of rapid globalization. They are the following:
• Simple and better way to identify gaps and technologies.
• Increases efficiency and systemic competitiveness of local
enterprises
• Primary targets involvement b/n local sector and sub sector
• Reduces production costs and improves profitability
• Improves customer satisfaction by providing quality product
and services
• Allows all actors and stakeholders to get broader picture of
the performance of the sub-sector
• It denotes where or at which stage value is added and how
much insight into why the firm does or does not have
added value; A way to identify opportunities to improve
added value;
36. PART 2: Value Chain Analysis
Outline of the Chapter
1. Principles and Criteria in Selecting VC to
Upgrade
2. Steps in Value Chain Analysis
3. Value chain mapping
Vc analysis has gained considerable
popularity in recent years
37. Value Chain Analysis
Why conduct a value chain analysis(VCA)?
• The underlying objective of VC analysis is essentially to
characterize, describe & understand a chain in all its
complexity &, in turn, to evaluate its performance, i.e.
identify constraints & opportunities
• The analysis can later be used to improve its performance
with one or more specific objectives
• N.B.: VCA requires some type of boundaries of some sort.
Some of the dimensions used are:
– Commodity boundary: group of commodities (i.e. vegetables),
specific commodity (i.e. potato), or specific product (i.e. potato
crisps)
– Geographical boundary: local, regional, international
– Etc.
38. VCA..contd
• VCA is the process of breaking a chain into its constituent parts in
order to better understand its structure and functioning.
• The analysis consists of:
– identifying chain actors at each stage & indicating their functions
& r/nships;
– determining the chain governance, or leadership, to facilitate chain
formation & strengthening; &
– identifying value adding activities in the chain & assigning costs
& added value to each of those activities.
• The flows of goods, information & finance through the various stages
of the chain are evaluated in order to detect problems or identify
opportunities to improve the contribution of specific actors & the
overall performance of the chain.
39. Value Chain Analysis
In general, an in-depth VCA considers the following:
• What are the economic costs along the VC?
• Where is the most value added to the VC?
• Who are the most important actors within the VC?
• What is the institutional framework of the VC?
• Where are the bottlenecks in the VC?
• Where is there market potential for growth?
• What is the size of the sector/chain?
• What is the potential for upgrading?
40. What is value chain analysis (VCA)?
• VCA is a dynamic approach that examines how
markets & industries respond to changes in the
domestic & international demand & supply for a
commodity; technological change in production &
marketing; & dev’ts in organizational models,
institutional arrangements, or mgmt techniques.
• VCA looks at the chain as a set of institutions &
rules; as a set of activities in producing, processing
& distributing commodities; & as a set of actors
involved in the value addition & distribution
process.
41. What is value chain analysis (VCA)…..?
• VCA focuses on chain governance & power r/nships
which determine how value is distributed at d/nt levels.
• Through the analysis of systems & power r/ns at d/nt
levels, VCA enables a more comprehensive modeling of
the effect of interventions at d/nt levels.
• VCA aims at identifying how the productivity of chain
activities can be improved, either through improved
technologies, organizations, institutions to better
coordinate the various stages of production and
distribution, & meet consumer demand.
42. Why the interest on VCA?
• A comprehensive understanding of the operation of
commodity markets requires an understanding of the
operation of the d/nt stages through w/c a product & its
associated value additions pass on from production to
consumption or end user.
• A comprehensive understanding of the coordination of
the VC requires a careful assessment of consumer
demand X-cs & the organizational & institutional
arrangements that are in place to meet these demands.
43. Concepts underpinning VCA
• Effective demand
–Effective demand as the force that pulls goods
and services through the vertical system.
–Hence the need to understand how demand is
changing both at the domestic & international
markets, & the implications for VC organization &
performance is quite impressing.
44. Concepts underpinning VCA (2)
• Verticality and vertical coordination
– Verticality implies that conditions in one stage in the
chain are likely to be strongly affected by conditions in
the other stages in the chain, in direct & indirect ways &
in expected & unexpected ways.
– Hence, primary focus of VCA is on the vertical
dimension & the interest is how productive, efficient &
effective VCs are in the production, transformation and
distribution of the commodity.
45. Concepts underpinning VCA (3)
• Value chain governance
– The roles of coordination & associated roles of identifying
dynamic profitable opportunities & apportioning roles to key
players.
– Implies interactions b/n firms reflect organization, rather than
randomness.
– Three types of power in chain governance
• Setting basic rules for participation in the chain
• Monitoring the performance of chain actors in complying with
the basic rules
• Helping chain actors adhere to basic rules
– Some value chain may exhibit very little governance
– There may be multiple sources of governance
– Power of governance may be vested with the chains, in local
communities, or in business associations
46. Potential objectives of VCA
• Analysis of income distribution
• Analysis of employment issues
• Analysis of economic & social impacts of interventions
• Analysis of environmental impact of interventions
• Guide collective action for marketing
• Guide research priority setting
• Conduct policy inventory and analysis
47. Innovation possibilities in VC
• Input supply
• Production & post harvest
• Marketing options
• Technical assistance & training
• Organization and coordination of marketing functions
• Market information & intelligence
• Market institutions
• Market infrastructure
• Financial services
• Policy and regulatory issues
49. A VALUE CHAIN ANALYSIS PROCESS
Value Chain
Analysis
Who has Incentives to take
advantage of these
Opportunities
Opportunities for Upgrading
Constraints to these
Opportunities
+
+
50. CATEGORIES OF THE VALUE CHAIN
• In value chain categorization first we have to consider the GTP
priority sectors those are the broadest distinction between activities
in an economy: e.g. Agriculture, industry.
• A value chain can be developed in extended (value chains
developed at sub sector level or across sectors) or in a simple
manner (value chain developed at product/services level).
• For the purpose of this manual we select both the value chain dev’t
techniques that prepared at sub sector (All economic activities
involved in a specific product group or service: e.g. Metal
Product, Textiles value chain) and product/services levels (Specific
e.g. Tomato value chain, Bed Preparation value chain).
51. Sector: Sub-Sector:
Agriculture - Animal production
- Crop production
- etc.
Sector: Sub-Sector:
Industrial
Development
Cotton
Wheat
Corn
…
…
…
…
…
- Textile & Garment
- Leather
- etc.
Products:
Product:
Yarn
Fabric
Shirts
…
Corn for animal
feeding
Corn for
humans
…
…
…
…
…
Sub-products:
Sub-products:
…
…
…
…
bag
shoe
Belt
...
Illustration about Value chain Categories
52. EXTENDED VALUE CHAIN
Extended value chain(EVC)
Type of value chain techniques that much more complex than simple value
chain that tend to be many more links in the chain, to mean that comprises
of many sectors and sub sectors within a series of chains to gain a final
product/ services.
The extended value chain development has the following characteristics
• It should be developed at sector or sub sector level with the
involvement of technical experts from the sectors
• Address all gaps in a sub sector or beyond
• Conducted & facilitated by TVET sector at federal and regional level
53. Example, EXTENDED VALUE CHAIN
RETAILING
WHOLESELLING
Tex le/GarmentValueChain
GARMENT HOME
TEXTILEPRODUCTION
TEXTILE
PRODUCTION
GINNING
PRODUCTION
TOOLS&
EQUIPMENT
SEEDS
LAND
PREPARATION
SEED SOWING
TRANSPLANTING
IRRIGATION
WEEDING
FERTILIZING
PEST& DISEASE
CONTROL
POST-HARVEST
FARM SITE TRANSPORT
Key
MainChain
Sub Chain
INPUT
GINNING
WEAVING
KNITTING
FINISHING
DESIGNING
CUTTING
ASSEMBLING
FINISHING
SPINNING
DISTRIBUTE
SELL
RETAIL
SALES
CONSUME
HARVESTING
FERTILIZER
PESTICIDES
PACKAGING
55. SIMPLE VALUE CHAIN
This is a type of VC technique that primarily focuses on activity analysis of
a specific product/commodity within sub sector. This type of VC dev’t
technique has the following characteristics
• Describes the full range of activities, which are required to bring a
product or service from the immediate input.
• Prepared by technical experts within a sub sector any level
• Conducted and facilitated by TVET structure at each level within
local economic corridor
A Value Chain can be developed for d/nt sub sectors as product and services
• A VC for Crop production sub sector; cotton (e.g. from land preparation to
harvesting of the cotton)
• A VC for Textile sub sector (e.g. from using the cotton to produce yarn till
fabric)
• A VC for Garment sub sector (e.g. from using the fabric to production of
shirt and marketing of shirt)
• A VC for metal & metal engineering sub sector (e.g. from raw metal to
production of steel door)
• A VC for leather sub sector (e.g. from finished leather to production of
leather bag)
56. Example: SIMPLE VALUE CHAIN
TOMATO PRODUCTION
MARKETING
POST -HARVEST
PRODUCTION &
MANAGEMENT
CULTIVATION & PLANTING
IRRIGATION INFRA
STRUCTURE
SEED VARIETY
FARM TOOLS &
EQUIPMENT
FERTILIZERS
LAND PREPARATION
RAISED BED PREPARATION
SEED SOWING
TRANSPLANTING
IRRIGATION
WEEDING
FERTILIZING
PEST & DISEASE CONTROL
TRELLISING/STICKING
HARVESTING
FRESH FRUITS
WHOLESALE & RETAIL
PESTICIDES
TRANSPORTING
Key
Main Chain
Sub Chain
INPUT
58. Cont …
REPORTING &
INSPECTION
FINALIZATION
GUEST ROOM
CLEANING
ENTRY
PRE-ENTRY
GUEST ROOM PREPARATION (AS IS)
INPUT
CHEMICALS
Main Chain
Sub Chain
PPE
CLEANING
MATERIALS
GUEST ROOM
HUMAN POWER
PERSONAL
PREPARATION
ROOM
ASSIGNMENT &
KEY
ROOM STATUS
IDENTIFICATION
MATERIAL
ARRANGEMENT
ANNOUNCEMENT
ROOM
OBSERVATION
BEDROOM
CLEANING
BATHROOM
CLEANING
VACUUMING &
EQUIPMENT
ARRANGEMENT
GUEST AMENITIES
ROOM ATTENDANT
REPORT
SUPERVISORY
CHECK UP
Key
59. STEPS OF VALUE CHAIN DEVELOPMENT
PHASE
PREPARATORY 1. VALUE CHAIN SELECTION
VALUE CHAIN
DEVELOPMENT
AND
SOLUTION
2. DATA COLLECTION
3. VALUE CHAIN MAPPING
4. VALUE ANALYSIS
5. GAP IDENTIFICATION
6. PRIORITIZING CONSTRAINTS
7. TECHNOLOGY IDENTIFICATION &
CATEGORIZATION
CONCLUDING 8. VALIDATION
9. ASSESSMENT AND EVALUATION
60. Steps Results
Input
(1) Value Chain Selection
(3) Value Chain Mapping
Data about activities,
actors, constraints, etc.
Techno based data
Human based data
Orga based data
Info based data
Responsibilities
Different Actors agreed on
joint plan
Value Chain Workflow
GTP
Identified Sector/Sub-
Sector/Industry
(2) Data Gathering Phase
Manual: Data
Gathering Template
Manual:
* how to develop VC
* Selection criteria for
benchmark
Detailed data about sector,
sub-sector or industry to be
able to develop value chain
Input
(1) Value Chain AS IS
(4) Value Chain Analysis
(5) Gap identification &
Prioritization of the gaps
(2) Benchmark Value Chain
TO BE
Techno based Gap
Human based Gap
Orga based Gap
Info based Gap
Value
Chain
description
and
analysis
As Is against the benchmark
= Gap
Target reached?
(6) Technology
Identification and
categorization
(7a) Transfer to 100%
Copy team
(8) Assessment &
Evaluation
Intervention
Conclusion
Designed Technology to close
gap
MSE is able to use technology
and reach intended targets
Trained human resources, e.g.
Lead trainers and/or TVET
trainers are trained to produce
technology
100% Copy Team (=
department within
TVET)
Project Based Training Team (=
department within TVET)
Lead Trainers and/or TVET
Trainers and/or Extension
Agents
Multiplyer MSE are trained
and know how to use or
produce technology
Set of criteria
Sector & Sub-sector
representatives
with support from
TVET
to Value Cain
Selection
Value Chains incl.
activities, actors, enablers,
stakeholders, data
Designed Technology to close
gap
Analyses done according to
• Yield, Quality, Cost, Time
• Cost and Return Analysis
(7b) Project based
Training
61. Steps in Value Chain Analysis
Steps in value chain analysis
• Steps1: Select/ prioritize VC /Commodity for
analysis
• Step 2: Chain mapping
• Step3: Analysis of Costs and Margins
63. SELECTION OF VALUE CHAIN
VALUE
CHAIN
SELECTION
CRITERIA
GTP
Size of
Sub Sector
Employment
GDP
Share
Share of
Export
Growth
Poten' al
Market
Poten; al
Factor
Condi' on
Product
Diversific
a ; on
Poten; al
Impact in
MSE's
Conserva; on
Importance
Women
Empowerment
64. Selecting/prioritizing VC/ commodities for analysis..Contd
Q. What are the steps for selecting commodities for market and
VC for analysis?
• Step 1. Determine criteria to be used for ranking
• Step 2. Weighting of Criteria
• Step 3. List potential products/activities
• Step 4. Matrix ranking of products/activities against the
criteria
65.
66.
67. Value Chain Mapping
• Group work: 1. value chain map
1) Start with mapping the key actors & core
processes...
Mapping a chain means creating a visual representation or a flow diagram of the
connections between activities in value chains as well as other market players.
It helps to illustrate and understand the process by which a product goes through several
stages until it reaches the final customer.
68. Group work: value chain map…..
• For each stage describe what happens to the
commodity,
• what activities take place & what values are added
(i.e. grading, sorting, threshing, cleaning, packaging,
cooling etc.)
• Be as specific as possible!!
69. Group work: value chain map….
• If it is applicable to your case, also quantify the VC
in terms of numbers / percentages for each step &
stage of the (core processes) VC, e.g.:
– quantify the product flow (%) from one step to the
next
– quantify losses in the chain (%)
– quantify profits or costs
– etc.
70. Group work: value chain map….
1) Start with mapping the key actors & core processes...
2) ... then continue with connecting the service providers...
3) ... and then the enabling environment...
71.
72. 3. Value Chain Development:
Challenges, Opportunities & Intervention
Strategies
73. Value Chain Development
Outline of the chapter
• Approaches to Identify Challenges and Opportunities in the VC
• Steps in Value Chain Development
• Challenges in Value Chain Development
• Opportunities for Value Chain Development
• Identifying Leverage Points from Constraints and Opportunities
• Upgrading Strategies,
• Monitoring and Evaluation
74. Value Chain Development(VCD)
VCD: Refers to the concerted effort to improve conditions
in the VC.
• It implies enhancing rewards and/or reducing exposure
to risks
• Enable entire value chain/firms produce or deliver
products & services that meet the quality standards of the
local and/or world markets at prices that are competitive.
• VCD can be considered equivalent to the concept of value
chain upgrading.
87. Group work
For the your group industrial products
A. identify the constraints along the main functions
B. Discuss on opportunities available to develop the VC
product
C. Discuss interventions to be taken for each constraints
identified at each stages to
I. Garment products
II. Wood work
III. Metal Work
88.
89.
90.
91.
92.
93.
94.
95.
96.
97.
98.
99.
100.
101. Innovation
• In terms of VC dev’t, innovation must be viewed
as necessary for overall chain competitiveness by
capturing more value or upgrading the VC.
• The production factor of “knowledge” Is one core
factor regarding the upgrading of value chains.
• A value chain’s access to information (e.g.
regarding market trends) can itself be a competitive
advantage.
102. Innovation..contd…
• If the rate of innovation is lower than that of
competitors (whether firms or competing Vcs), this
may result in declining market share & value added; in
extreme cases it may also involve negative growth.
• Thus, innovation has to be placed in a relative context
– pace compared to competitors – that can be referred
to as upgrading.
• Upgrading refers to the innovation that increases firm
and/or value chain competitiveness.
103. Stakeholder Analysis
Guiding questions:
• Who are the stakeholders in relation to
your case?
• What are their interests, views,
objectives?
• How important are they?
• How are they affected?
• How do they affect / influence the case?
• What kind of relations do they have?
• How should these stakeholders
participate or contribute?
104. ROLE OF ACTORS & STAKEHOLDERS
Actors are those who have direct engagement on value chain
development. These are;
• Sectors, subsectors and development institutes
• Research institutions, Universities,
• TVET
• Industries, chambers
Stakeholders are those who support the value chain
development. These are;
• Input suppliers
• professional Association
• NGOs
• Donors
105. ROLE OF STAKEHOLDERS
• Provide consulting.
• Technical support on value chain development,
• Support in financing the value chain
development,
• Share international experiences on value chain
development,
106. Stakeholder Analysis….
Design a matrix using different colour cards for
each column:
Column 1: brainstorm stakeholders. Group /
cluster
• Stakeholders: place similar stakeholders in one
row and write the name of the stakeholder group on
a separate card.
– Are all stakeholders already included in your value chain
map?
– Separately list the stakeholders for the 3 levels!
Column 2: Characteristics, which describe the
stakeholder or group. e.g. size; degree of influence or
importance; how are they organised; scale or scope
(national, regional, provincial); rural/urban;
membership etc.
Column 3: Interests in the case. What is it they can
/ hope to get out of the case?
107. Stakeholder Analysis….
• Column 4: resources that they (can) provide to the
case.
– they contribute towards the case? e.g. data or
information; human resources (personnel, expertise); a
network; financial resources; material, facilities and/or
equipment that might be used in the project; mandate,
policies.
• Column 5: challenges faced (by stakeholders) and
that hinder the successful outcome of the case. e.g.
lack of involvement in planning; lack of funds or
material; lack of information or orientation to the case
etc.
• Column 6: required actions. How to work with
these stakeholders within the case (e.g. build capacity
or strengthen interest)?
109. ROLE THE ACTORS
A. Sectors subsectors and development institutes
• Develop their own sectorial and sub sectorial value chains,
• Develop value chains for each product/commodity,
• Being cooperative while value chain development,
• Intervene in the solution,
• create awareness and build capacity on value chain,
• generate obligatory rules for the implementation of value
chain,
• Validate the developed value chain,
• Designing and formulating Value chain Upgrading strategy,
• Conduct monitoring and evaluation,
110. ROLE OF ACTORS….Contd
B. Research institutions and
universities
• Being cooperative while value chain development,
• Create awareness and build capacity on value chain,
• Intervene in the solution,
• Generate obligatory rules for the implementation of
value chain,
• Conduct Monitoring and evaluation
111. ROLE OF ACTORS….Contd
C. TVET Sector
I. Federal level
• Create awareness and build capacity on value chain,
• Facilitate and work collaboratively with actors in the value
chain development,
• Generate concepts for the implementation of VC dev’t.
• Intervene in the solution,
• Generate obligatory rules for the implementation of value chain,
• Facilitate the process of validating developed value chain,
• Support and follow up the value chain development and
implementation,
• Designing and formulating value chain upgrading strategies,
• Conduct Monitoring and evaluation,
112. ROLE OF ACTORS…..Contd
II. Regional level
• Create awareness and build capacity on value chain,
• Facilitate and work collaboratively with actors in the value chain
development,
• Generate concepts for the implementation of value chain
development,
• Generate obligatory rules for the implementation of value chain,
• Facilitate the process of validating developed value chain,
• Carry out VC dev’t at a cluster level according to growth corridor,
• Implement the validated value chain accordingly,
• Support and follow up the value chain development and
implementation,
• Designing and formulating value chain upgrading strategies,
• Conduct Monitoring and evaluation,
113. ROLE OF ACTORS….Contd
III. Zonal/district/city offices
• Create awareness and build capacity on VC dev’t,
• Identifying local growth corridor for VC dev’t,
• Involve and work collaboratively with actors in the value
chain dev’t according to their growth corridor,
• Implement the validated value chain accordingly,
• Support and follow up the value chain development and
implementation,
• Conduct Monitoring and evaluation,
114. ROLE OF ACTORS….Contd
IV. TVET institutes/
Dean, Industry Extension Vice Dean:
• Create awareness and build capacity on value chain development,
• Identifying local growth corridor for value chain development with
local actors,
• Involve and work collaboratively with actors in the value chain
development,
• Facilitate technology copy & transfer implementation from
validated value chain,
Trainers
• Trainers can participate on value chain development as technical
expert, if and only if their expertise skill is desirable.
• Need to have a clear understanding on value chain development,
and implication on technology copy & transfer as well as project
based training,
115. ROLE OF ACTORS….Contd
D. Industries(from large to micro level)
• Being cooperative while value chain development,
• Intervene in the solution,
• support all actors and stakeholder to get broader picture of the
performance of the industry,
• Indicates where or at which stage value is added and how much,
116. Conducting Benchmarking and Gap
Assessments of Value Chains
‘If you don’t know where you are going
…any road will lead you there’
Lewis Carol
117. Benchmarking ………
• Compares the performance of a VC to itself at
d/nt points in time, to another value chain in the
country, or to a VC in another country in order to
establish the current baseline position & provide
comparative data to guide decisions and action.
• …a business improvement tool that is growing in
popularity.
118. Purpose of Benchmarking
• To compare against a standard point of reference
• A systematic process for identifying and
implementing best practice.
• In practical terms…. It’s about learning from the
experiences of others.
• It allows practitioners & stakeholders to
understand the performance of particular VCs in
comparison to competitors, & especially to
global best performers.
119. Benchmarking Cont…
• AS IS: is the actual or existing sequence of
activities to deliver a product or services to the
market by an enterprise.
• TO BE: represents the benchmark or the
standard, or a set of standards, used as a point
of reference for evaluating performance or level
of quality.
120. Cont…
The standard, or a set of standards, used as a
point of reference for evaluating performance or
level of quality. Benchmarks may be drawn from
a country's own experience, from the experience
of all sectors from the other country.
Benchmarking
The process of comparing own performance
parameters with the performance parameters of
businesses or value chains considered the leaders
in the field.
Parameters can refer to various aspects.
121. Benchmarking….Contd…
Important benchmark parameters are
productivity, cost of production or product
quality.
Benchmarking is used to identify gaps in the
performance of the value chain promoted.
Factors consider during selection of
benchmarking but not limited;
• Productivity(quality, production/yield, cost)
• other condition factor (level of technology,
skill, employment/ labour intensive,
environment,)
122. Examples
MARKETING
PROCESSING
POST- HARVEST
(40% LOSSES)
PRODUCTION &
MANAGEMENT
CULTIVATION &
PLANTING
Rice Produc on Value Chain(AS IS)
SITE
SELECTION
LAND
PREPARATION
SEED
SELECTION
SEED SOWING
TRANS-
PLANTING
GROWTH
MONITORING
IRRIGATION&
DRAINAGE
FERTILIZING
WEEDING
-
INSECT & PEST
CONTROL
HARVESTING
DRYING
THRESHING
MILLING
STORAGE
TRANSPORTING
WHOLESALE
RETAIL
POWDERING
INJERAMAKING
CROPPING
CALENDAR
TELAMAKING
INPUT
SEEDS
FERTILIZER
PESTICIDE
TOOLS &
EQUIPMENT
FARM SITE
CAPITAL
MANPOWER
Main Chain
Sub Chain
Key
123. BENCHMARK(TO BE)
Rice Produc+on Value Chain (To Be)CHINA
SOIL TESTING
soil test kit
CROPPING
CALENDAR
LAND SOAKING
LAND
PREPARATION
Mechanized
SEEDLING
PREPARATION
(Seed
Soaking-24h,incubatio
n period- 36 h) 40kg/
ha
TRANSPLANTING
Wet direct-
Broadcast-100kg/ha
Dry Direct-100kg/ha,
20mm depth 10-15 hp,
1day/ha
GROWTH MONITORING
IRRIGATION & DRAINAGE
IRRIGATION & DRAINAGE
WEEDING
(once) (Proper Plowing has great affects on
weeding, spray 1day/ha,2hp, manual-1 day/
ha 15hp, water prevent weeds to grow
INSECT & PEST CONTROL
HARVESTING
(67 qu/ha lowland)2 crop/yr upland,2-3
crop /yr lowland,Harvester -
Harvester/thresher(grains output) 3ha/day
THRESHING
on time(mechanical, 2 ha/
day)5hp
DRYING
,mechanical if rainy
season ,sun
drying(concrete)
STORAGE
12-14% MC)wooden/
plastic pallettes
MILLING
In house,mobile miller,no
broken grain,rice bran
taken by farmer
PACKAGING
Sacks,plastic,brandname,
labels
TRANSPORTING
(tractor-
trailer,jeepney,cart)
WHOLESALE
local market/export
RETAIL
35-40 birr/kg,
Display
Management with
price and variety tag
RICE
FARINACEOUS
Dishes
BEVERAGE
Production
BAKING & PASTRY
Production
MARKETING
PROCESSING
POST- HARVEST
(40% LOSSES)
PRODUCTION &
MANAGEMENT
CULTIVATION &
PLANTING
INPUT
SEEDS
(inbred,
hybrid)lowland/
upland
varieties,regular
changing,
(moisture
content 12-14 %
MC)pure,
90-100% GP,
120-140 days
FERTILIZER
PESTICIDE
TOOLS &
EQUIPMENT
FARM SITE
(Adequate
Irrigation) soil
moisture required
for upland,
lowland-5cm
CAPITAL
MANPOWER
124. AS IS
REPORTING &
INSPECTION
FINALIZATION
GUEST ROOM
CLEANING
ENTRY
PRE-ENTRY
GUEST ROOM PREPARATION (AS IS)
INPUT
CHEMICALS
Main Chain
Sub Chain
PPE
CLEANING
MATERIALS
GUEST ROOM
HUMAN POWER
PERSONAL
PREPARATION
ROOM
ASSIGNMENT &
KEY
ROOM STATUS
IDENTIFICATION
MATERIAL
ARRANGEMENT
ANNOUNCEMENT
ROOM
OBSERVATION
BEDROOM
CLEANING
BATHROOM
CLEANING
VACUUMING &
EQUIPMENT
ARRANGEMENT
GUEST AMENITIES
ROOM ATTENDANT
REPORT
SUPERVISORY
CHECK UP
Key
125. BENCHMARK
REPORTING &
INSPECTION
FINALIZATION
GUEST ROOM
CLEANING
ENTRY
PRE-ENTRY
GUEST ROOM PREPARATION (BENCHMARK) AUSTRALIA
INPUT
CHEMICALS
Main Chain
Sub Chain
PPE
CLEANING
MATERIALS
GUEST ROOM
HUMAN POWER
PERSONAL
PREPARATION
ROOM
ASSIGNMENT &
KEY
ROOM STATUS
IDENTIFICATION
MATERIAL
ARRANGEMENT
ANNOUNCEMENT
ROOM
OBSERVATION
BEDROOM
CLEANING
BATHROOM
CLEANING
VACUUMING &
EQUIPMENT
ARRANGEMENT
GUEST AMENITIES
ROOM ATTENDANT
REPORT
SUPERVISORY
CHECK UP
Key
126. AS IS
MARKETING
TRANSPORTING
PACKAGING &
STORAGE
FINISHING
ASSEMBLING
SHAPING
PREPARATION
METAL PRODUCT (AS IS)
INPUT
RESEARCH &
DEVELOPMENT
Main Chain
Sub Chain
DESIGN
MATERIAL
SELECTION
MEASURING
LAY OUT
PROCESS
CUTTING
BENDING WELDING
MECHANICAL
ASSEMBLY
GRINDING
SANDING
FINISHED
PRODUCTS IN
WORKSHOP
DELIVERY
DIRECT
SELLING
Key
SCROLLING
TWISTING
DRILLING
RIVETING
BODY FILLER
PAINTING
129. Types of Benchmarking
• INFORMAL - Comparing with Peers and Colleagues
• Actively encouraging employees to learn from the experience
and expertise of other colleagues & organizations through
comparing practices & processes e.g. through best practice
visits, conferences, best practice websites, networking
• FORMAL
(a) Performance Benchmarking
• Comparing performance levels of a process/activity with other
organizations
(b) Best Practice Benchmarking
• Following a structured process for comparing performance
levels and learning why better performers have higher levels of
performance and adapting/implementing those better practices
130. Formal Benchmarking…
• In assessing a VC’s competitiveness, several key
aspects can be usefully examined.
• First, it is important to benchmark overall VC
performance, meaning how well the actors in the
VC deliver products to the final consumer in
comparison to other VCs & other countries.
• Once the overall VC is analyzed, it can be broken
down into key performance components, such as
yields, transport efficiency, market access, unit
price, and many others.
131. Formal Benchmarking…
• These key components & the underlying processes
can then be individually benchmarked to identify
relative strengths & weaknesses.
• Industry experts can identify important, detailed
performance & competitiveness indicators; once
these indicators are quantified, comparisons b/n
d/nt industries & countries can be made.
• The experts and the VC leadership can then
analyze how the better performance is being
achieved.
133. What Benchmarking Does
1. Establishes a Baseline of Current Performance
Once the benchmarking exercise has been completed, a
company, an industry, or a country understands its
position relative to its comparators.
2. Identifies Areas and Targets for Improvement
If benchmarking against best practices, then differences
in performance along the entire value can be identified.
Shortcomings can be examined steps can be taken to
improve performance.
3. Pinpoints Potential Critical Factors for Success
Areas for improvement can be prioritized.
134. Steps to Effective Benchmarking
• The benchmarking process is straightforward in
nature. It generally includes the following steps:
•Determine what indicators & measures to
benchmark
• Determine the benchmarking target groups
• Gather and analyze the data
• Convert benchmark data into action through:
o Managed Discussion
o Prioritization and Design
o Implementation
135. Examples
1 . Uganda Benchmarking Constraints in the Coffee
Industry ( 20 days...to export) Vs
• Uganda’s coffee is generally transported to
Kampala and sent to Mombassa Port for
shipment overseas.
• coffee exporters in Colombia, Costa Rica, and
Vietnam indicated that instead of 20 days, the
norms for delivery to port were b/n one and
seven days!
• This information helped the industry and
government to recognize the impact
136. Objectives of the Benchmarking
might include:
• Operational improvements
• Reduced transaction costs
• More advantageous market positioning
137. Outcomes of Bench marking
• Based on the results and findings of the benchmarking
exercise, floriculture industry leaders worked together to
develop the Ugandan Floriculture Competitiveness Plan:
2005–2010.
• Elements of the strategies presented in the Plan build
upon the benchmarking exercise.
• The benchmarking exercise highlighted shortcomings in
several areas, including product diversification, research
and development, and transport costs.
• The Plan looks to improve the Ugandan floriculture
industry’s performance through the accomplishment of
five key targets and associated sub-strategies:
138. Outcomes…
1. Increase export volumes and values
Expand in existing markets with existing products
Open new markets with existing products
Establish a Europe-based unpacking distribution facility
Diversify and expand product offerings
2. Increase Internal and Foreign Direct Investment
– Clarify strategic industry status
– Develop and implement a floriculture investment
incentives package
– Develop an upland expansion plan
– Develop financial support mechanisms for the industry
– Develop and carry out investment promotion program
139. Outcomes….
3. Improve technology and practices
– Set up and maintain an effective cold chain management system
– Facilitate expansion of fresh management services
– Establish the Floriculture Training Development Center
– Develop and Install a product expansion program
4. Develop and launch a quality, branding, and marketing
campaign
– Strengthen Uganda’s position as a quality service provider
– Standardize export packaging
– Develop and launch a floricultural branding program
– Develop and Implement a marketing program
5. Position the Uganda Flower Exporters Association (UFEA) for
sustainability
– Prepare and implement industry development support program
– Produce revenue generation and sustainability plan
140. TECHNOLOGY IDENTIFICATION & CATEGORIZATION
Technology identification is the process of identifying
technologies from the benchmark. If the technology in the
benchmark is somehow complicated and sophisticated with
respect to the country`s potential and focus, it is possible to
look for other additional alternative technologies
(equivalent technology from other best practices) without
compromising the quality and efficiency.
Categorization of technology: The process of segregating
identified technologies according to four categories of
technologies namely Techno ware, Human ware, Info
ware and Orga ware.
141. Technology categorization
TECHNOLOGY DESCRIPTION
TECHNOWARE (TOOLS) Includes materials, gadgets, etc. This component is the
object-embodied physical technologies, like tools & equipment,
implements, vehicles.
HUMANWARE (SKILLS) Includes the human knowledge, ability, and experience.
This component is the person-embodied art-of-doing
technologies, like ingenuity, craftsmanship, skills in performing
the task.
INFOWARE (FACTS) Includes organized information, work processes, design
and blueprints, etc. This component is the record-embodies
know-what–why-how-type technologies, like systematized
concepts and technical specifications (parameters, diagrams,
formulae, theories and manuals).
ORGAWARE (SETUPS) Includes the organizational structures, setups, methods
of doing things, etc. This component is the organization-
embodied work-operations-schemes-type technologies. Like Soil
testing Laboratory, Food Processing Plant
142. Technology for rice as exam.
VALUE CHAIN TECHNOWARE HUMANWARE INFOWARE ORGAWARE
CULTIVATION Soil Test Kit
Improved Iron
Plough
Low Draft Chisel
Plough
Para Plough
Tractor Drawn Bed
Furrow Maker
Spading Machine
Power tiller
Rotavator
Spring Tyne
Cultivator
Tractor Drawn Disc
Plough
Tractor Drawn Disc
Harrow
Mini Power Tiller
Prepare land for
agriculture crop
production – FCP L3
Soil samples and
analyze results –
FCP L3
Establish Nursery-
FCP L3
Seed Quality
Manual
Soil Sampling
Manual
Land Preparation
Manual
Seedling
Preparation
Manual
Tractor Operation &
Maintenance
Manual
Seed Center
Soil Analysis Center
Mechanization
Bureau
Crop Insurance
Agency
PLANTING Seedling tray
Transplanter
Transplant seedling
– FCP L2
Transplanting
Manual
144. VALIDATION
Whenever a value chain analysis is conducted it needs to be
validated.
After the full value chain analysis documents are completed, it
should be validated by technical advisory panel(TAP) at Sector-
Industry Leading Body.
During validation the validating body will check and review
content accuracy, completeness and relevance with the criteria
listed in the annex 4.
Then, the value chain will be approved for subsequent works
of technology copy & transfer as well as project-based
training.
145. ASSESSMENT & EVALUATION
• Assessment and evaluation measures the impact and outcomes of
transferred technologies, which are identified from a value chain
analysis to solve the constraints for industry competitiveness.
• After the technological gaps of a sector/institution are
complemented by the best technology from the benchmark, the
impact or outcome resulted from the application of the technology
should be measured and known. Since this kind of measurement
indicates the effectiveness of the technology transfer system, it
should be measured with special attention.
• The assessment and evaluation is done based on the guideline
specifically prepared for measuring the outcome of technology
transfer on hundred percent technology copy manuals.
