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1. JINKA UNIVERSITY TRAINING PREPARED FOR VALUE CHAIN ANALYSIS AND DEVELOPMENT BY Mebratu Alemu (PhD) Arba Minch, Ethiopia 5-7 March, 2019

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

3. Contents…… Benchmarking in Value chains Concepts Purpose of Benchmarking Types of bench Marking

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. 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

8. Concepts of Value Chain….. “ V alue 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).

9. 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.

10. 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 .

11. 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

12. Basic concepts in VC (3) Business Development S ervices 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)

13. Production Post-harvest handling Processing Retailing Consumption Trading Trading Market information and intelligence Financial services Transportation Communications Govt. policy regulation Tech. & business training & assistance Production input supply & Business Support Services Research The Value Chain Transport Input Supply

14. 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.

15. 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 .)

16. Value Chain Vs Supply Chain……… • S upply 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.

17. • 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

18. Time to buzz Discuss for 5 minutes with your neighbour (s) about the specific characteristics of Agriculture value chains

19. 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 .

20. 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

21. 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.

22. 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;

23. VC actors Research Universities Marketing Agency Others Cooperative Promotion NGOs BoA Financial institutions Small farmers Traders companies Union Regional Government Ministry of Agriculture Enablers Supporters Operators International conventions

24. PART 2: Value Chain Analysis Outline of the Chapter Principles and Criteria in Selecting VC to Upgrade Steps in Value Chain Analysis Value chain mapping Vc analysis has gained considerable popularity in recent years

25. 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 .

26. 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.

27. 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?

28. 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.

29. 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 .

30. 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.

31. 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.

32. 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.

33. 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

34. 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

35. 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

36. COMPONENTS OF VALUE CHAIN ANALYSIS Value Chain Analysis Value Chain Selection Design Implementation Monitoring & Impact Assessment Competitiveness Analysis Chain Analysis End Market Analysis

37. A VALUE CHAIN ANALYSIS PROCESS Value Chain Analysis Competitiveness Analysis Chain Analysis End Market Analysis Who has Incentives to take advantage of these Opportunities Opportunities for Upgrading Constraints to these Opportunities + +

38. 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 ).

39. 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 a nima l feeding Corn for humans … … … … … Sub- products : Sub- products : … … … … bag shoe Belt ... Illustration about Value chain Categories

40. 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 C onducted & facilitated by TVET sector at federal and regional level

41. E xample, EXTENDED VALUE CHAIN

42. Cont…

43. 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)

44. Example: SIMPLE VALUE CHAIN

45. Cont…

46. Cont …

47. 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

48. 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

49. 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

50. Steps1: Select/ prioritize value chain for analysis

51. SELECTION OF VALUE CHAIN

52. 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

53. 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.

54. 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!!

55. 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.

56. 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...

57. 3. Value Chain Development: Challenges, Opportunities & Intervention Strategies

58. 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

59. 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.

60. Figure 5

61. 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 Garment products Wood work Metal Work

62. 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.

63. 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 .

64. 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 ?

65. 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

66. ROLE OF STAKEHOLDERS P rovide consulting. T echnical support on value chain development, S upport in financing the value chain development, S hare international experiences on value chain development,

67. Stakeholder Analysis…. Design a matrix using different colour cards for each column : Column 1: brainstorm stakeholders . Group / cluster S takeholders : 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: C haracteristics , 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?

68. 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 )?

69. Stakeholder Analysis….

70. 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 ,

71. ROLE OF ACTORS…. Contd B. Research institutions and universities Being cooperative while value chain development, C reate awareness and build capacity on value chain, Intervene in the solution, G enerate obligatory rules for the implementation of value chain, C onduct Monitoring and evaluation

72. ROLE OF ACTORS…. Contd C. TVET Sector I. Federal level C reate 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, F acilitate the process of validating developed value chain, S upport and follow up the value chain development and implementation, Designing and formulating value chain upgrading strategies, Conduct Monitoring and evaluation,

73. ROLE OF ACTORS….. Contd II. Regional level C reate 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, F acilitate the process of validating developed value chain, C arry out VC dev’t at a cluster level according to growth corridor, Implement the validated value chain accordingly, S upport and follow up the value chain development and implementation, Designing and formulating value chain upgrading strategies, Conduct Monitoring and evaluation,

74. ROLE OF ACTORS…. Contd III. Zonal/district/city offices C reate 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, S upport and follow up the value chain development and implementation, Conduct Monitoring and evaluation,

75. ROLE OF ACTORS…. Contd IV. TVET institutes/ Dean, Industry Extension Vice Dean: C reate 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. N eed to have a clear understanding on value chain development, and implication on technology copy & transfer as well as project based training ,

76. 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,

77. 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

78. Benchmarking ……… C ompares 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 .

79. 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.

80. 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.

81. 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 .

82. 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 ,)

83. Examples

84. BENCHMARK(TO BE)

85. AS IS

86. BENCHMARK

87. AS IS

88. BENCHMARK

89. Types of Benchmarking

90. 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

91. 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 VC s & 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 .

92. 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.

93. Business Benefits of Benchmarking

94. 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.

95. 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

96. 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

97. Objectives of the Benchmarking might include: • Operational improvements • Reduced transaction costs • More advantageous market positioning

98. 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:

99. Outcomes… 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

100. 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

101. 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.

102. 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

103. 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

104. LINKAGES BETWEEN SECTORS

105. 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.

106. 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 .

107. Thank you