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Some Facts
The overall value addition of agriculture produce in India is less than
2% compared to more than 40% in other developing countries like
Brazil, Malaysia.
The long and fragmented supply chain coupled with lack of modern
storage, transportation, processing and marketing facilities /
infrastructure lead to deterioration of the quality and value-loss of
agricultural commodities.
Too much intermediation by Commission Agents / Arthias at various
levels, un-scientific handling of agriculture produce, multi layer
marketing etc add further to the sufferings of the producer-farmer.
Significant investment opportunities are likely to arise in the market,
for both basic and high value foods, where demand can be driven by
rising incomes and price reductions achieved through increased
integration and efficiency in the supply chain.
Minimizing the market risk the farmers are exposed to, should be the
primary objective, specially for both perishable and comparatively
durable agriculture commodities. This is possible only through an
integrated value chain.
Value chain
A "value chain" is the full range of
inter-related productive activities
performed by firms in different
geographical locations to bring out a
product or a service from conception
to complete production and delivery
to final consumers" Definition by
UNCTAD
Risks:
Less control
Less flexibility
More money spent
More time spent
to make decisions
Sharing of
proprietary
information or
expertise.
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Healthy Animals
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General characteristics of
value chains
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General characteristics of
value chains
Value chains emphasize high levels of interorganizational trust.
Inter-organizational trust is pivotal to successful
value chains.
Inter-organizational trust will still be in place even
if key people leave because it is based on
organizational proceduresit is process-based
trust.
Inter-organizational trust is built on fairness,
stability, predictability of agreements among
strategic partners and confidence that partners will
not exploit the others vulnerabilities.
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General characteristics of
value chains
Value chains emphasize shared values
and vision, shared information
(transparency) and shared decision
making among the strategic partners.
Shared information improves productivity and
enables rapid responses to market changes.
Shared decision making can be framed in
familiar shared governance terms:
Legislativesets standards for the chain
Judicialmonitors performance in the chain
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Executivecoordinates procedures and flows
General characteristics of
value chains
Shared decision making means all
partners experience a sense of fairness
and justice.
Distributive justicerewards/profits are
distributed fairly among all strategic
partners
Procedural justiceall partners
experience rules of business as fair
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General characteristics of
value chains
Value chains emphasize high levels of
performance.
High levels of performance are essential to
deliver high- quality products and services.
Appropriate standards need to be developed
and performance evaluations conducted
across the entire chain.
Quality assurance and continuous
improvement systems need to be employed.
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Improved
Improved
Procurement
Procurement
Improved
Improved
Logistics
Logistics
Benefits
Benefitsof
of
Value
ValueChange
Change
Management
Management
Enhanced
Enhanced
Customer
CustomerOrder
Order
Management
Management
Improved
Improved
Product
Product
Development
Development
Stages in Building a
Value Chain
Stage 1: Identifying the
Opportunity
Stage 2: Developing a Pilot
Project Plan
Stage 3: Monitoring and
Evaluating the Pilot Project
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