M4P stands out for its discussion of a range of qualitative tools for understanding value chain relations and the financial implications of investments in value chains. Among the tools presented by UNIDO, a particularly noteworthy one is the tool for incorporating gender issues in the analysis. In general, for each method or tool presented in the guides, authors provide an overview of the method or tool to be applied, as well as examples of its use and results.
In most cases, however, discussion is brief and examples lack detail. The lack of discussion about options for adjusting the methods and tools to different contexts may frustrate implementation by some users given the diversity of contexts in which VCD is carried out and the difficulty of collecting data from households and the private sector. Following a discussion on data collection and analysis, the guides present a process for the actual design of the interventions for VCD.
The guides recommend one or more workshops be carried out with the selected actors. During these meetings, results from prior data collection and analysis are presented: the chain is described, the end market discussed, bottlenecks presented, and in some cases, potential solutions are presented for validation e. More participatory guides consider strategy development as a separate and final step in the process.
This may consist of a single workshop e. CIP, which recommends various sessions over several months. Guides may warn users on the potential for conflicts during the process e.
In general, however, discussion lacks on the process by which actors come together to negotiate solutions and pursue common interests and how this process evolves over time see Staatz and Donald, for discussion. Under what conditions is joint strategy development and implementation most likely to succeed? What options exist when win-win solutions fail to emerge? How does the process vary according to differences in the local context?
Looking beyond the actual workshops, the guides avoid challenging users to question the strategy itself: what worked? This would imply a strong focus on joint reflection and learning to be carried out throughout the strategy implementation process. Thus, the following analysis focuses on the six guides that do. Most of their indicators focus on data collection at the chain and market level.
Among the recommended indicators are sales volumes and values, production costs, yields, profitability, product offer, and technologies applied. In both cases, indicators relate mainly to income and the contribution of the value chain being developed to household income. ILO suggests various indicators related to the concept of decent work, including employment creation and labour conditions.
The indicators suggested by the guides provide relevant and important information for understanding the outcomes and, in some cases, the impacts of VCD. With the exception of UNIDO, these guides are not designed to provide a deep understanding of the needs and circumstances of more vulnerable actors in a given chain, including household producers and small businesses, or how VCD-related interventions shape their ability to participate and benefit from deeper engagement with markets.
Guidance on how to collect and analyse information for monitoring and evaluation is limited. GTZ stands out for presenting a rigorous approach to monitoring ;and evaluation, with recommendations for the elaboration of an impact pathway, formulation of impact hypotheses, and use of control groups for attribution. However, given the complexity of the suggested approach, the guide does not provide sufficient help to practitioners in its implementation.
In general, users are expected to already understand the basics of monitoring and evaluation in a VCD context or apply readily available monitoring and evaluation guides designed for project assessment e. Baker, ; Grun, However, guides designed for the monitoring and evaluation of project assessment are likely to fall short in the context of VCD, given the multiple levels at which VCD takes place and the possibility that changes result from multiple sources see Stoian et al.
Based on the results from our analysis of guides, we provide recommendations for tool users according to the context in which they are working, their objectives in pursuing VCD, and the methods for data collection and analysis that best suit their needs and interests Table V.
The guides provide a framework for development practitioners to engage with market actors and set the stage for collaboration in VCD following guide implementation. They prioritize the institutions that shape the actions and interactions of chain actors and the related implications for chain development. Institutions of particular interest are those governing the relationships, agreements, and interactions among chain actors, the informal and formal rules that determine what individuals and organizations should or can do, and the recurring actions carried out by individuals or organizations such as provision of services, functions, and products.
The implementation process brings chain actors and development organizations together to seek answers to questions of common interest, including enquiry into the limitations to chain growth and potential solutions that benefit all stakeholders. The guides embrace the use of participatory research methods, including key informant interviews, participatory workshops participatory chain mapping , and focus groups, thus facilitating their implementation by practitioners working in environments where data are scarce and large-scale sampling may be prohibitively expensive.
The guides reflect the interest of development organizations in achieving greater sustainability for their interventions.
An underlying premise is that sustainability can only be achieved with a strong focus on consumer demand and the needs of certain chain actors e. By focusing attention on demand, the guides recognize that smallholders and other upstream chain actors must be able to respond to the demands of consumers, which opens the door for building more productive dialogue and interactions with the private sector. The role of support services in helping smallholders better meet the needs of downstream chain actors is another aspect in which the guides address sustainability.
The review also sheds light on certain gaps and limitations in the guides related to VCD design. First, greater attention must be given to the needs and circumstances of poor households. The guides often implicitly assume that rural households are a homogeneous group and have sufficient resources to participate in VCD, do not face substantial trade-offs when using these resources, and are able to assume higher risks when investing their capital and labour.
Insights from the literature show that these assumptions often do not reflect the needs and conditions of the poor. Recent publications have highlighted the need for greater attention to the needs and interests of smallholders when considering options for VCD Seville et al. The design of strategies for VCD that include poor and vulnerable populations may require additional concepts and tools that take these aspects into account. This will increase the complexity of tool implementation; however, it also offers the opportunity to design more viable and efficient strategies.
Debate continues on which concepts and tools are most useful and how to incorporate them into guides without alienating users. Second, the guides should provide deeper guidance for dealing with variations in the context. Most guides assume that users will identify critical elements of the context, understand their relevance for VCD, and make the necessary adjustments for data collection and analysis.
These contextual differences may relate to scale in shipping and processing and the related need for smallholder organization , the preexisting asset endowments of smallholders and small businesses and the related need for investments in asset building prior to VCD , and the overall business environment and the related need for advocacy as part of the VCD.
Alternative implementation pathways based on differences in the context may increase the complexity of the guides themselves but should result in more tailored strategies for VCD. Finally, more attention should be given to capacities of those that implement the guides.
Greater discussion on how to deal with complex research design and implementation issues, such as variability in returns may help to improve the overall rigour of assessment and usefulness of the VCD strategies.
The incorporation of fully developed case studies rather than snapshots of good practices from diverse sites will also help to inform users about potential implementation pitfalls and options for avoiding them.
Conceptual frameworks should explicitly show the relationships between tool implementation and the ultimate development goals to be achieved. Guides would benefit from a conceptualization of how guide implementation leads to outcomes and impacts for different types of chain actors. The incorporation of new tools and methods must recognize the trade-offs faced by users between ease of use and rigour.
New debates and interactions among tool designers and users are needed to identify the costs and benefits of additional tools and rigour and promote learning for improved design and implementation of VCD guides. While individual authors and organizations have developed learning groups around specific guides, a wider group of users and guide designers is needed to address important issues and dilemmas facing tool design and implementation.
Guidelines for value chain analysis and development reviewed. Parameters for the review of guides for VCD. Data collection recommended indicators, guiding questions by the guides, by level. Recommendations to users on which guides are most appropriate for particular objectives, contexts, and methods. For the sake of brevity, the guides are referenced in this article according to the organization that backed development of the guide. The authors of each guide are identified in Table I.
Chain governance often refers to the vertical coordination by firms in one node of the chain with firms in other chain nodes. Coordination can assume various modalities that include strategic alliances, and contractual partnerships. These determine how product flows are regulated in terms of prices, quality, quantity, and delivery specifications, among other aspects Humphrey and Schmitz, Governance structures are considered to have important consequences for the access of chain actors in developing countries to markets and the range of activities that developing-country actors can undertake.
A wider framing of the governance concept includes legislative aspects that shape business interactions, such as food safety and environmental standards Kaplinksy and Morris, ; Tallontire et al.
The concept of upgrading refers to the potential of businesses and producers in developing countries to improve their performance and obtain greater benefits from value chain participation. The term business refers to privately owned small, medium, and large businesses, as well as community-based businesses such as cooperatives, producer associations, and farmer organizations that are commercially active.
In some cases, businesses may receive VCD assistance from governments and civil society e. His research focuses on understanding the opportunities for achieving poverty reduction through enterprise and value chain development. Recently, Donovan wrote, together with Dietmar Stoian, The Methodology 5Capitals: A tool for assessing the poverty impacts of value chain development.
Dr Jason Donovan is the corresponding author and can be contacted at: j. Based in the USA, his main research interests are smallholder farming systems, adoption and diffusion of innovations, marketing, extension approaches, and participatory technology development.
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Measure content performance. Develop and improve products. List of Partners vendors. Your Money. Personal Finance. Your Practice. Popular Courses. Business Business Essentials. Business Essentials Guide to Mergers and Acquisitions. Table of Contents Expand. What Is a Value Chain? Understanding Value Chains. Components of a Value Chain.
Examples of Value Chains. Key Takeaways A value chain is a step-by-step business model for transforming a product or service from idea to reality. Value chains help increase a business's efficiency so the business can deliver the most value for the least possible cost.
The end goal of a value chain is to create a competitive advantage for a company by increasing productivity while keeping costs reasonable. Service - includes all the activities required to keep the product or service working effectively for the buyer after it is sold and delivered. Secondary activities are: Procurement - is the acquisition of inputs, or resources, for the firm. Human Resource management - consists of all activities involved in recruiting, hiring, training, developing, compensating and if necessary dismissing or laying off personnel.
Technological Development - pertains to the equipment, hardware, software, procedures and technical knowledge brought to bear in the firm's transformation of inputs into outputs. Infrastructure - serves the company's needs and ties its various parts together, it consists of functions or departments such as accounting, legal, finance, planning, public affairs, government relations, quality assurance and general management.
References Porter, Michael E. For an overview of Engaging the private sector through multi-stakeholder platforms DCED, , click here. At a glance: Short reads on VCD. Value chain development explained, ILO, Overview documents. Value Chain Development for Decent Work. Measuring the results of VCD. Other useful links.
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