Value ChainValue Chain

Dr. Nittana SouthisengSME Development Specialist

Mekong Institute

29 Octobter 12

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A mechanism that allows producers, processors, and traders—separated by time and space—to gradually add value to products and services as they pass from one link in the chain to the next until reaching the final consumer (domestic or global).

What is Value Chain (VC)?

Exists when the actors in the chain operate in a way that maximizes the generation of value along the chain.

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SupportActivities

Primary Activities

Technological Development

Human Resource Management

Firm Infrastructure

Procurement

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Elements of Value ChainElements of Value Chain

Value chain actors are the firms and individuals who assume different functions in the value chain, engaging directly in production, processing, trading and marketing.

Value Chain Actors

Value Chain Mapping

Products

Value chain

actors and their

functions

Flow of products and end markets

Business interactions

Service provision

Value Chain & Business Support Services

What are the potential business in your country?

Who are the actors that participate in businesses across value chains?

Map the flow and their business interactions

Value Chain Actors

Mapping Cashew Value Chain in Tanzania

A method for understanding how firms under given framework conditions operate and coordinate their businesses to ensure that primary materials are transformed, stored, transported and reach end-consumers in certain form and quality.

Value Chain Diagnostics

VCD 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, and meet consumer demand.

Value Chain Dimensions in Diagnostics

Sourcing and supplies

Production capacity and technology

End-markets and trade

Governance of value chains

Sustainable production and energy use

Value chain finance

Business environment and socio-political framework

Farmer/ Producers/ Cultivation

Trader/collector

Processing

- Manage

- Value adding

- Distribution

Retailer Wholesaler Exporter Consumer

- Manage

- Value adding

- Distribution

Wholesaler in export market

Distributor in export market

Retailer in export market

Value Added Value Added

A process takes inputs and

performs value-added activities

on those inputs to create an output.

The success of actors in value-

adding their production lies in the ability of these actors to be part of the networks

Value Added Process

Value Added ProcessA process map is a graphical representation of all of the steps involved in an entire process or particular segment of a process.

Determine the boundaries of the

process and

Involve representatives from each major activity

associated with the process in the

improvement effort.

Map the process by identifying non–value-

added activities & value-added activities.

Eliminate the non–value-added

activities.

Redesign the process using the knowledge

gained in the first nine steps.

Mapping Value Added Process

Market Trend

Creative

ConvenientHealthy

Less environmental

impact

Value Adding

Dried Som Tum “Thai Smile”

Banana

Fish

17Examples of Thai Agricultural Creative Products

Dried Som Tum “Thai Smile”– vacuumed and dried food – keeps the freshness of vegetables for Som Tum. Cooked in microwave oven for a few minutes, you can enjoy the authentic Thai Som Tum in terms of taste, sweetness, as well as preserved nutrition

‘Kessara Bakery Shop’ has an idea to bring Pla Shaon, local fish in Singburi, as an important ingredient for cake and ice cream

‘Proud’ is the Thai sweet brand name. Its selling point is to package Thai traditional sweets and dried fruits in nice-looking forms. It is suited for gifts in every occasion.

Difference between Supply Chain and Value Chain

Thank You