Addis Ababa Tegbareid

Polytechnic College

Value Chain Development

By:- Gadisa Abebe

November, 2018
1
 What is your expectation

From the training

Value chain analysis

Your KWLAGE

2
 Content
 Introduction

 Objectives of value chain development

 Scope of the value chain development

 Value chain Concepts and development approach

 Benefits/ Importance of value chain development

 Steps of value chain development

 Role of actors and stallholders 3

Discussion on Value chain

➢ Meaning

➢ Objectives

➢ Scope(what/where, which are)

4
 INTRODUCTION
 Value Chain has been already practiced in TVET;
as a matter of fact hundreds of value chain are
developed and many technologies transferred to
enterprises.

 value chains as a way to identify technology, add

value, diversify economies, and contribute to
Micro, Small and Medium Enterprise in all
sectors.
5
 Cont…
 value chain development practiced so far, it is
not standardized and developed without the
involvement of the sectors and generally
assumed to be responsibility of TVET more
specifically the trainers.
 Furthermore lack of clarity about the concepts
and methods relating to value chains, there was
a challenge that sooner or later the benefits of
the value chain approach were overshadowed
by unmet expectations.
6
The Training is particularly designed
 To give emphasis on principles and methodologies of
how value chain is developed
 Expected to provide into value chain selection,
 Mapping
 Value analysis for activities
 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.
 Monitoring and evaluation checklist to measure
performance of any developed value chain in gap and
solution identification in relation to the standard.
7
 DEFINITION OF KEY WORDS
 VALUE CHAIN - is a sequence of target-oriented
combinations of production factors (From input to the
market for specific product/services) that create a
marketable product or service to the final consumption.
 VALUE CHAIN ANALYSIS - describes the activities
within and around an organization, and relates them to
an analysis of the competitive strength of the
organization.
 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. 8
 GAP - is something missing from an activity or a
system that prevents it from
being complete or perfect; the difference between
As Is and To Be/benchmark.
 MAIN CHAIN - is a major activity of workflow in
a value chain.
 SUB CHAIN - is a sub/support activity of
workflow in a value chain.
 SIMPLE VALUE CHAIN- value chain
development techniques describes the full range of
activities, which are required to bring a product or
service from the immediate input.
9
 BENCHMARKING - The process of
comparing own performance parameters
with the performance parameters of
businesses or value chains considered the
leaders in the field.
 EXTENDED VALUE CHAIN - value
chain development techniques that much
more complex than simple value chain that
tend to be many more links in the chain.
 SKILLS GAP TRAINING - is training
given by the TVETs to the operators of
the MSEs after they identify their skill
gap. 10
 OBJECTIVE
GENERAL OBJECTIVE
 The overall objective of this training is to
guide how to develop a competitive and well-
organized value chain analysis in order to
identify feasible technologies to bring a
sustainable development in all enterprises over
the country.

11
SPECIFIC OBJECTIVES
 Identify a number of technologies by
comparing the AS IS to benchmark.
 Provide information on the conceptual
fundamentals of chain analyses,
highlighting the constraints prioritization
and technology identification.
 Identify gaps and technologies for 100%
technology copying and project based
training purposes.
 Transfer the identified technologies to the
enterprise to ensure the competitiveness.
12
 SCOPE OF THE VALUE CHAIN
Addresses all GTP priority Sectors and Sub Sectors,
TVET, Research institutes, Universities, Industries and
those who are working for the development and
competitiveness of micro, small and medium
(manufacturing) enterprise at the sector, subsector and
commodity levels, who lead efforts to implement
value chain analysis in their organizations.
13
VALUE CHAIN CONCEPTS
AND DEVELOPMENTAL
APPROACH

14
VALUE CHAIN CONCEPTS
Michael Porter (1985)
Value chain is a concept proposed by Michael Porter in his
book "Competitive Advantage" in 1985. In this book, Porter
explains that "Competitive Advantage" is the ability for a
firm/secure/ to put "generic strategy" into practice.
• Born in 1947
. • Harvard
professor
• Wrote book,
Competitive
Advantage

15
16
Gary Gereffi (1990)
The primary focus of global commodity
chain (GCC) analysis is the international
trading system and the increasing economic
integration of international production and
marketing chains. It was developed
primarily to analyze the impact of
globalization on industrial commodity
chains. GCC highlights power relations that
are embedded in value chain analyses

17
 Cont…
Approche Filière’, translated as Commodity
Chain Analysis, CCA, is applied to the
analysis of existing marketing chains for
primarily agricultural commodities, assessing
how public policies, investments and
institutions affect local production systems.

Hopkins and Wallerstein 1986

A commodity chain is defined as ‘a network of
labour and production processes whose end
result is a finished commodity.
18
 Cont…
In general we understand

value chain is sequence of activities that an enterprise

operating in a specific sector and sub sector performs

in order to deliver a valuable product or service to the

market.
.

19
 VALUE CHAIN IN TVET
 In TVET the existing value chain development is done
through analyzing the existing activities (As Is) of
enterprises and 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. 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

21

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 Benchmarked with international best
practices.
 Upgraded based on the latest trends of
technologies.
 Validated, Documented and reported to
concern organization 22
VALUE CHAIN DEVELOPMENT APPROACH

value chain development approach

advantages;
 Helps to find out a number of technologies
from one developed value chain at a time;
 Since value chain should 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. 23
 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.
 To create employment opportunity and
income for those who are engaged in
technology copy and multiply.
24
 BENEFITS/ IMPORTANCE
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 enterprise
 Primary targets involvement between
local sector and sub sector 25
 Reduces production costs and improves
profitability
 Improves customer satisfaction by providing
quality product and services
 Allows all actors and stakeholder 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;
26
Discuses the categories of value chain
analysis techniques;

Meaning and difference with examples

27
CATEGORIES OF THE VALUE CHAIN

 Value chain categorized in to

1. Extended
2. Simple
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).
28
29
Illustration about Value chain Categories
Sub-
Sector: Sub-Sector: Products:
… …
products:
- Animal production … …
Agriculture
… …
… …
Corn for
Cotton animal
Wheat feeding
- Crop production
Corn Corn for
… humans
- etc.
…

Sub-
Sector: Sub-Sector: Product:
products:
Yarn …
Industrial Fabric …
Development - Textile & Garment
Shirts …
… …
bag
- Leather shoe
Belt 30

- etc. ...
EXTENDED VALUE CHAIN
Extended value chain

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 and facilitated by TVET sector at federal and regional level

31
Example:- EXTENDED VALUE CHAIN

Tex le/Garment Value Chain

TEXTILE GARMENT HOME
INPUT PRODUCTION GINNING WHOLESELLING RETAILING
PRODUCTION TEXTILE PRODUCTION

LAND
FARM SITE GINNING SPINNING DESIGNING TRANSPORT RETAIL
PREPARATION

SEED SOWING WEAVING CUTTING SALES

DISTRIBUTE
SEEDS
TRANSPLANTING
KNITTING ASSEMBLING
SELL CONSUME
TOOLS & IRRIGATION
EQUIPMENT FINISHING FINISHING
WEEDING

PACKAGING
Key
FERTILIZER FERTILIZING

Main Chain
PEST & DISEASE
PESTICIDES CONTROL
Sub Chain
HARVESTING

POST-HARVEST
32
 Cont…
METAL PRODUCT (AS IS)

INPUT PREPARATION PACKAGING &

SHAPING ASSEMBLING FINISHING TRANSPORTING MARKETING
STORAGE

RESEARCH & FINISHED DIRECT

MEASURING BENDING WELDING GRINDING DELIVERY
DEVELOPMENT PRODUCTS IN SELLING
WORKSHOP
LAY OUT MECHANICAL BODY FILLER
DESIGN SCROLLING ASSEMBLY
PROCESS

MATERIAL RIVETING SANDING

SELECTION CUTTING TWISTING Key
PAINTING Main Chain
DRILLING

Sub Chain
33
 SIMPLE VALUE CHAIN
This is a type of value chain technique that primarily
focuses on activity analysis of a specific
product/commodity within sub sector. This type of
value chain development 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 34
A Value Chain can be developed for different sub
sectors as product and services
 Value Chain for Crop production sub sector; cotton
(e.g. from land preparation to harvesting of the
cotton)
 Value Chain for Textile sub sector (e.g. from using
the cotton to produce yarn till fabric)
 Value Chain for Garment sub sector (e.g. from using
the fabric to production of shirt and marketing of
shirt)
 Value chain for metal and metal engineering sub
sector (e.g. from raw metal to production of steel
door)
 Value chain for leather sub sector (e.g. from finished
35

leather to production of leather bag)

 Example: SIMPLE VALUE
CHAIN
TOMATO PRODUCTION
PRODUCTION &
INPUT CULTIVATION & PLANTING POST -HARVEST MARKETING
MANAGEMENT

IRRIGATION TRANSPORTING
IRRIGATION INFRA LAND PREPARATION
FRESH FRUITS
STRUCTURE WHOLESALE & RETAIL
WEEDING
RAISED BED PREPARATION
FARM TOOLS &
EQUIPMENT
TRELLISING/STICKING
SEED SOWING
FERTILIZERS

TRANSPLANTING FERTILIZING Key

PESTICIDES
Main Chain
PEST & DISEASE CONTROL
SEED VARIETY
Sub Chain
HARVESTING

36
 Cont…
LEATHER WALLET

INPUT CUTTING QUALITY

PREPARATION STITCHING FINISHING PACKAGING MARKETING
CONTROL

TOOLS & LEATHER ATTACHING PACKED

STITCHING CLEANING INSPECTION & WHOLE SALE
EQUIPMENT CUTTING LEATHER FINISHED GOODS
TESTING

PATTERN SEGREGATING THREAD RETAIL

LEATHER BURNING
PREPARATION BY PARTS

MANPOWER Key
DESIGN

Main Chain

Sub Chain

37
 Cont …
GUEST ROOM PREPARATION (AS IS)

INPUT GUEST ROOM REPORTING &

PRE-ENTRY ENTRY FINALIZATION
CLEANING INSPECTION

PERSONAL BEDROOM VACUUMING &

CHEMICALS ANNOUNCEMENT ROOM ATTENDANT
PREPARATION CLEANING EQUIPMENT
REPORT
ARRANGEMENT
ROOM
PPE ROOM BATHROOM
ASSIGNMENT &
OBSERVATION CLEANING
KEY SUPERVISORY
GUEST AMENITIES
CLEANING CHECK UP
MATERIALS ROOM STATUS
IDENTIFICATION
GUEST ROOM
MATERIAL Key
ARRANGEMENT
HUMAN POWER
Main Chain

Sub Chain

38
1. What are the steps of value chain

development?

2. Elaborate the first three steps.

39
STEPS OF VALUE CHAIN DEVELOPMENT

PREPARATORY 1. VALUE CHAIN SELECTION

2. DATA COLLECTION

VALUE CHAIN 3. VALUE CHAIN MAPPING

4. VALUE ANALYSIS
DEVELOPMENT
PHASE

AND 5. GAP IDENTIFICATION

SOLUTION 6. PRIORITIZING CONSTRAINTS

7. TECHNOLOGY IDENTIFICATION &

CATEGORIZATION
CONCLUDING 8. VALIDATION /PROOF/

9. ASSESSMENT AND EVALUATION

40
ValueInput
Chain Workflow
Steps Results Responsibilitie
GTP
(1) Value Chain Different Actors agreed on
Identified Sector/Sub- Data about activities,
Selection joint plan
Sector/Industry actors, constraints,
Detailed data about sector, etc. Sector & Sub-
Manual: Data (2) Data Gathering sub-sector or industry to be Techno based data sector
Gathering Template Phase able to develop value chain Human based data representatives

Value Chain description and analysis

Orga based data with support
Input Info based data from TVET
Manual:
* how to develop VC (3) Value Chain (1) Value Chain AS IS Value Chains incl.
* Selection criteria Mapping activities, actors, enablers,
for benchmark (2) Benchmark Value Chain stakeholders, data
TO BE
(4) Value Chain Analyses done according to
Analysis • Yield, Quality, Cost, Time
As Is against the benchmark • Cost and Return Analysis
Set of criteria (5) Gap identification = Gap
& Prioritization of the Techno based Gap
gaps Human based Gap
Orga based Gap
Designed Technology to Info based Gap
(6) Technology close gap
Identification and 100% Copy Team (=
to Value Cain
categorization department within
Selection Designed Technology to
TVET)
close gap
Project Based Training
Intervention

(7a) Transfer to 100% Trained human resources, Team (= department

Copy team e.g. Lead trainers and/or within TVET)
(7b) Project based TVET trainers are trained
Training to produce technology Lead Trainers and/or
TVET Trainers and/or
Multiplyer MSE are trained Extension Agents
and know how to use or
(8) Assessment & produce technology
Conclusion

Evaluation

MSE is able to use

Target technology and reach 41
reached? intended targets
SELECTION OF VALUE CHAIN

GTP
Women Size of
Empowerment Sub Sector

Conserva; on
Importance Employment

VALUE
Poten; al
Impact in
CHAIN GDP
Share
MSE's SELECTION
CRITERIA
Product Share of
a
Diversific ; on Export

Factor Growth
Condi' on Poten' al
Market
Poten; al

42
GTP

GROWTH AND TRANSFORMATION PLAN (GTP)

PRIORITY SECTORS

1 Agriculture 4.2 Road Transport

2 Industry development 4.3 Shipping Transport
2.1 Textile and Garment 4.4 Air Transport
2.2 Leather Industry 4.5 Energy
2.3 Sugar 4.6 Water and Irrigation
2.4 Cement 4.7 Telecommunication
2.5 Metal Engineering 4.8 Urban Development
2.6 Chemical 5. Trade
2.7 Agro Processing 6. Health
3 Mining 7. Culture,Tourism,Sport
4 Economy and infrastructure 8. Social
4.1 Rail Transport

43
 SIZE OF SUB SECTOR
Employment
For countries like Ethiopia, unemployment is a critical problem.
The selected value chain will create a considerable amount of
job opportunities and absorb unemployed labor force. Thus,
beyond supplying of quality products a value chain expected to
reduce unemployment.

GDP share
An Economic development of a country is the total sum of GDP
shares for every product/subsector. A product that has a greater
GDP share in an economy is more likely to create jobs and
alleviate poverty. A selected value chain should be those
products/subsectors with a relatively higher share of national
GDP.

44
Market share
If a product is not competitive in quality and price on
the market to satisfy customer requirements it no
longer exists in the market. So the value chain we are
in a position to develop should have a sustainable and
significant market share.

Share of Export
The share of export represent the shares of the
product/subsector from the country`s total export of
goods and services. The indicator measures the degree
of importance of a product within the total exports of
country. The export share of a product/subsector is a
determinant factor for a value chain selection.
45
 GROWTH POTENTIAL
Define as the mathematical probability that a business will
become larger. The growth potential refers to amount of
sales or revenues the organization generates currently and
keeps the future demand and satisfaction. A growth
potential is often the most important selection criteria
because without growth competitiveness a
product/subsector cannot be sustained. A selected value
chain should have the potential to grow parallel to the
customer`s growing demand.

Market potential.
The estimated total sales revenue of all suppliers of a
product in a market during a certain period for both
domestic and export scenario. 46
Factor condition (human, material, knowledge, capital,
infrastructure)
Other condition factors related with human resources, the
accessibility of the materials, knowledge imposed, amount
of capital and infrastructure in producing the product and
services should be considered in selection of value chain
development.

Product diversification.
Enterprise’s expanding opportunities through
additional market potential of an existing product..
Achieved by entering into
additional markets and/or pricing strategies. Often the
product may be improved, altered or changed, or
new marketing activities are developed. A value chain is
47
developed for products that have a potential to diversify.
POTENTIAL IMPACT ON MSE, YOUTH
A value chain is developed to support MSEs with identified
etc.
gaps. On the other hand, the developed value chain promotes
the establishment of MSEs by creating jobs, and
strengthening the linkages with large industries. Growth in
industries with high rates of MSE participation and
employment will have an impact in reducing poverty more
than growth in industries with low employment and minimal
MSE participation. A value chain that has positive
contribution to massive MSEs participation and job
opportunity for youth should be selected. 48
CONSERVATION IMPORTANCE

A production of environment friendly product and services, business operation with

the highest consideration of the environment and natural resources that aims to
identify the most significant positive and negative impacts of the value chain on the
environment and vice versa. To remain in business and be profitable in the longer
term, the value chains in which we develop need to be all-encompassing and green.
Focusing on economic development alone brings environmental damage, and
therefore the selected value chain will have no/less harm on the environment that
enhances the quality of growth.

49
WOMEN EMPOWERMENT

 Women's empowerment, referring to

the empowerment of women in our present society,
has become a significant topic of discussion in
regards to development. Equal rights for men and
women as a basic human right is given great
considerations. The value chain that we are going to
select should consider gender equal opportunity

50
 DATA COLLECTION

Planning And Preparation

After the selection of the value chain to develop the following are
considered in planning and preparation stage;
 Background; Review of the past and existing status (facts and figures) of
the product
 Survey Area. Specific location to be visited in order to acquire the
existing situation (AS IS) for value chain development.
 Survey Period. Specific Date and a number of days covered during the
field visit
 Target Respondents. Specific number, name of producer/ service
provider within the target survey area.
 Study Team. A group composed of different technical expertise related
with the sector or subsector of the value chain analysis to be conducted.

51
GATHERING TOOL DEVELOPMENT
In able to collect all the information needed for value chain development, a set of
gathering tools must be developed. A composition of qualitative and quantitative
questions to identify primary and support activities needed to do the mapping of the
AS IS, which define as the existing activities and practices of product/service
providers.

A variety of tools (questionnaires, interviews, literature reviews, observations etc.)

are used to assist in the data gathering process. Each type of tool provides alternative
means to illustrate, explain and specify exactly what must be delivered to meet the
intended goals. The gathering tool should be covered the name of the product and
services selected, the background and information of the selected enterprise, the
inputs or initial resources to start an enterprise, the main chain or the sequence of the
main process and also the sub chain or the activities supporting the main chain. The
tool also includes the statement of the real problems and solutions existing within the
enterprise and finally the interventions given by the governmental and non-
governmental organizations.

52
 MAPPING THE VALUE CHAIN
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.
Activity Analysis, The identification of the activities undertaken
by the enterprise that contributed to the delivery of the product or
service. After the identification the survey team will do the
brainstorming with the activities identified which are the Main
Chain and the Sub Chain.
The purpose of mapping the value chain is to translate the
findings of the gathering of data into a Value Chain. The Value
Chain map is a simple tool, which visualizes complex things we
find in reality. 53
 Cont…
 Mapping of a Value Chain follows a certain
terminology, meaning that

 The Main Chain is a major activities of work flow in

a chain that are written down using a BLUE arrow
box

 The Sub Chain is a sub/support activities of work

flow in a chain that are written down using a
WHITE arrow box 54
 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.

55
 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. 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,)

56
 Examples
Rice Produc on Value Chain(AS IS)
CULTIVATION & PRODUCTION & POST- HARVEST
INPUT PROCESSING MARKETING
PLANTING MANAGEMENT (40% LOSSES)

CAPITAL SITE SEED GROWTH WEEDING THRESHING POWDERING WHOLESALE

SELECTION SELECTION MONITORING -
FARM SITE
LAND INSECT & PEST DRYING INJERA MAKING RETAIL
TOOLS & SEED SOWING IRRIGATION&
PREPARATION DRAINAGE CONTROL
EQUIPMENT
CROPPING TRANS- MILLING TELA MAKING
MANPOWER PLANTING FERTILIZING HARVESTING
CALENDAR
SEEDS STORAGE
Key
PESTICIDE
TRANSPORTING Main Chain
FERTILIZER
Sub Chain
57
 BENCHMARK(TO BE)
Rice Produc+on Value Chain (To Be)CHINA
CULTIVATION & PRODUCTION & POST- HARVEST
INPUT PROCESSING MARKETING
PLANTING MANAGEMENT (40% LOSSES)

CAPITAL PESTICIDE SOIL TESTING GROWTH MONITORING THRESHING

soil test kit on time(mechanical, 2 ha/ RICE WHOLESALE
day)5hp FARINACEOUS local market/export
FARM SITE FERTILIZER
Dishes
(Adequate IRRIGATION & DRAINAGE
CROPPING
Irrigation) soil CALENDAR
moisture required DRYING BEVERAGE RETAIL
for upland, IRRIGATION & DRAINAGE ,mechanical if rainy Production 35-40 birr/kg,
LAND SOAKING
lowland-5cm season ,sun Display
drying(concrete) Management with
WEEDING price and variety tag
TOOLS & BAKING & PASTRY
(once) (Proper Plowing has great affects on
EQUIPMENT Production
LAND weeding, spray 1day/ha,2hp, manual-1 day/
STORAGE
PREPARATION ha 15hp, water prevent weeds to grow
12-14% MC)wooden/
MANPOWER Mechanized
plastic pallettes
INSECT & PEST CONTROL
SEEDS SEEDLING MILLING
(inbred, PREPARATION HARVESTING In house,mobile miller,no
hybrid)lowland/ (Seed (67 qu/ha lowland)2 crop/yr upland,2-3 broken grain,rice bran
upland Soaking-24h,incubatio crop /yr lowland,Harvester - taken by farmer
n period- 36 h) 40kg/ Harvester/thresher(grains output) 3ha/day
varieties,regular ha PACKAGING
changing,
Sacks,plastic,brandname,
(moisture TRANSPLANTING labels
content 12-14 % Wet direct-
Broadcast-100kg/ha
MC)pure, Dry Direct-100kg/ha, TRANSPORTING
90-100% GP, 20mm depth 10-15 hp, (tractor-
120-140 days 1day/ha trailer,jeepney,cart)
58
AS IS

GUEST ROOM PREPARATION (AS IS)

INPUT GUEST ROOM REPORTING &

PRE-ENTRY ENTRY FINALIZATION
CLEANING INSPECTION

PERSONAL BEDROOM VACUUMING &

CHEMICALS ANNOUNCEMENT ROOM ATTENDANT
PREPARATION CLEANING EQUIPMENT
REPORT
ARRANGEMENT
ROOM
PPE ROOM BATHROOM
ASSIGNMENT &
OBSERVATION CLEANING
KEY SUPERVISORY
GUEST AMENITIES
CLEANING CHECK UP
MATERIALS ROOM STATUS
IDENTIFICATION
GUEST ROOM
MATERIAL Key
ARRANGEMENT
HUMAN POWER
Main Chain

Sub Chain

59
BENCHMARK

GUEST ROOM PREPARATION (BENCHMARK) AUSTRALIA

INPUT GUEST ROOM REPORTING &

PRE-ENTRY ENTRY FINALIZATION
CLEANING INSPECTION

PERSONAL BEDROOM VACUUMING &

CHEMICALS ANNOUNCEMENT ROOM ATTENDANT
PREPARATION EQUIPMENT
CLEANING REPORT
ARRANGEMENT
ROOM
PPE ROOM BATHROOM
ASSIGNMENT &
OBSERVATION CLEANING
KEY SUPERVISORY
GUEST AMENITIES
CLEANING CHECK UP
MATERIALS ROOM STATUS
IDENTIFICATION
GUEST ROOM
MATERIAL Key
ARRANGEMENT
HUMAN POWER
Main Chain

Sub Chain

60
 AS IS

METAL PRODUCT (AS IS)

INPUT PREPARATION PACKAGING &

SHAPING ASSEMBLING FINISHING TRANSPORTING MARKETING
STORAGE

RESEARCH & FINISHED DIRECT

MEASURING BENDING WELDING GRINDING DELIVERY
DEVELOPMENT PRODUCTS IN SELLING
WORKSHOP
LAY OUT MECHANICAL BODY FILLER
DESIGN SCROLLING ASSEMBLY
PROCESS

MATERIAL RIVETING SANDING

SELECTION CUTTING TWISTING Key
PAINTING Main Chain
DRILLING

Sub Chain

61
 BENCHMARK

METAL PRODUCTION (BENCHMARK) GERMANY

PACKAGING AFTER
INPUT QUALITY
PREPARATION SHAPING ASSEMBLING FINISHING & TRANSPORTING MARKETING SALE
CONTROL
STORAGE SERVICE

RESEARCH & INSPECTION PACKED DELIVERY RETAILING

MEASURING BENDING WELDING GRINDING SERVICING
DEVELOPMENT & FINISHED
TESTING PRODUCTS REPAIRING
MECHANICAL WHOLE TRAINING
DESIGN LAY OUT SCROLLING BODY FILLER
PROCESS ASSEMBLY SELLING
STANDARD
STORAGE
MATERIAL RIVETING SANDING
SELECTION CUTTING TWISTING
Key
PAINTING
DRILLING
Main Chain

Sub Chain

62
Group Discussion

4. VALUE ANALYSIS

5. IDENTIFICATION OF GAPS/CONSTRAINTS

6. PRIORITIZING THE TECHNOLOGY GAPS/CONSTRAINTS

63
 VALUE ANALYSIS
Value Analysis is analyzing value of each activities and how it is undertaken in
existing situation(AS IS) with respect benchmark. A value analysis, providing both
qualitative and quantitative background information for activities to be analyzed;
Sources of information for this analysis may include secondary data, published or
unpublished literature, surveys, focus groups, and rapid appraisal. A major goal of
analyzing is to identify any “bottlenecks” in the value chain.

The identification of the factors that the customer’s value in the way of the conduct of
each activity and then work out on the changes that are needed.

64
 Method of Comparative Analysis
All data and information gathered in Value chain can be
analyzed using a combination of the following methods.

 Four Parameters (Yield, Quality, Cost, Time)

 Line Graph

 Cost and Return Analysis

65
FOUR PARAMETERS

The process of analyzing the Value chain activities is according to

the four parameters (Yield, Quality, Cost and Time) to identify
the Gaps between AS IS compared to the Benchmark. The four
parameters defined as flows:
 Yield – refers to level or number of output acquired
 Quality – refers to the level of standard applied
 Cost – refers to the amount of money allotted in a specific
activities
 Time – refers to the specific duration, time limitation in
performing the activities

66
Example: FOUR PARAMETERS

Comparative Analysis ( Lowland Rice )

Value Chain Yield Quality Cost Time
I. Cultivation As Is To Be As Is To Be As Is To Be As Is To Be
Site Rainfed Irrigation
selection & dainage
infra
Soil Analysis Free from Done before
MoAg cropping
Cropping Not Recorded Harvesting Harvesting
Calendar Recorded (Oct-Dec) ( Oct-Nov)
Land Traditional Iron curve 4,500 (3-4 5-6 days Amt. of
Soaking/ wooden plow/ times 2000 birr water is
Land Prep plow Hand plowing) available at
Flooded- tractor the right
rainfed time
II. Planting
Rice Seed 55 67 qt/ha Long 200kg.ha 40kg/ha at 150-160 100-110 EM
Varieties quintal / Round grains, at 10birr/ 10 birr/kg days DAP/ 111-120 MM
ha grains registered kg DAS 121 up LM
certified
seeds
55 67 qt/ha Farmer to Fr Seed 200kg.ha 40 kg/ha Not 80-100%
quintal / farmer grower-10 at 5birr/kg at 10 birr/ practice germination
67
Seed Quality ha exchange/ 0% pure, kg
reserve 80-100%
germ. Rate
LINE GRAPH
The following chart shows an analysis of the rice yield using the line
graph. This is just to show the trend of the yield of the rice.
Comparison of Yield-LOWLAND/UPLAND

FOGERA RICE YIELD FOR FOGERA RICE YIELD FOR

LOWLAND(Quintal) UPLAND(Quintal)
(X JIGNA VARIETY) (NERICA VARIETY)
38
60 36
58 58 36 35
56
55
34
54
35
32
52 54 51 30 30
50
48 28
46 26
2003 2004 2005 2006 2003 2004 2005 2006

68
 COST AND RETURN ANALYSIS
The following table shows the Cost of production analysis and the
return of investment in rice production, comparing the AS IS versus the
TO BE. Which shows that weeding activities covers 26%(AS IS) of the
cost of production. Therefore weeding appears to be the constraints in
rive value chain.
COMPARATIVE YIELD ANALYSIS-UPLAND
UPLAND AS IS % TO BE % YIELD ANALYSIS AS IS TO BE
1 1ST 2ND 1. Total Production
= 3,500 kilos 6,000.00
CROPPING CROPPING CROPPING
SEEDS 1, 500 5.51 800 800 3.04 2. Less 10% PH losses 210 kilos 6% losses 180.00 3% PH loses
3. Average Yield pe
FERTILIZER 1, 750 6.42 2,200 2,200 8.38 Hectare
PLOWING 4,500 19.83 6,100 6,100 23.24 = 3,290.00 kilos 5,820.00

PLANTING 600 2.20 600 600 2.28 COST AND RETURN

ANALYSIS
WEEDING 6, 000 26.45 3000 3000 13.71
HARVESTING 900 3.30 900 900 3.42 1. Farm Gate Price
= 8.00 ETB 8.00 ETB
2. Gross Income
THRESHING 1,680 6.17 3,840 3,840 14.63 = 26,320.00 ETB 46,560.00 ETB
TRANSPORT 390 1.43 600 600 2.28
Add: Rice Straw 1,600.00 2,000.00 ETB
SACKS 800 2.93 800 800 3.04 Rice Bran
LAND 7,000 25.71 7,000 7,000 26.67 27,920.00 48,560.00
TOTAL ETB
RENTALS 3. Production Cost
TOTAL 25, 120 100% 26,240 26,240 100% = 25,120.00 ETB 26,240.00 ETB
4. Net Income
= 2,800.00 ETB 22,320.00 ETB

5. Return of Investment
= 0.11 0.85

AS IS TO BE
69
NET INCOME-ONE CROPPING NET INCOME-TWO CROPPING
2,800.00 ETB 44,640.00 ETB
IDENTIFICATION OF GAPS/CONSTRAINTS
Literally a gap is something missing from an activity or a system that prevents it from
being complete or perfect. But in this manual identification of a gap means the
difference between the existing situation (AS IS) and the benchmark (TO BE) with
the concern of technology. Technology is simply a conversion of input into
marketable output.
Constraints/Gaps Analysis of a Value Chain follows a certain terminology, meaning
that
 The Main Chain Gap of a Value Chain are written down in the following manner,
using an RED arrow box
 The Sub Chain gaps under a certain chain are written down using a YELLOW box
 The Critically Mismanaged Approach represents the SUB CHAIN available in the
AS IS and BENCHMARK but still needs a critical attention. It is written using a
GREEN box

70
 IDENTIFICATION OF CONSTRAINTS/GAPS

Rice Production Value Chain (Constraints/Gap)

CULTIVATION & PRODUCTION & POST- HARVEST
INPUT PROCESSING MARKETING
PLANTING MANAGEMENT (40% LOSSES)

CAPITAL INJERA, TELA

PESTICIDE SOIL TESTING GROWTH MONITORING THRESHING MAKING
soil test kit on time(mechanical, 2 WHOLESALE
FARM SITE FERTILIZER ha/day)5hp local market/export
RICE
(Adequate IRRIGATION & DRAINAGE
CROPPING FARINACEOUS
Irrigation) soil CALENDAR Dishes
moisture required DRYING RETAIL
for upland, IRRIGATION & DRAINAGE ,mechanical if rainy BEVERAGE 35-40 birr/kg,
LAND SOAKING
lowland-5cm season ,sun Production Display
drying(concrete) Management with
WEEDING
TOOLS & BAKING & PASTRY price and variety tag
(once) (Proper Plowing has great affects on
EQUIPMENT weeding, spray 1day/ha,2hp, manual-1 Production
LAND STORAGE
PREPARATION day/ha 15hp, water prevent weeds to grow 12-14%
MANPOWER Mechanized MC)wooden/plastic Key
pallettes
INSECT & PEST CONTROL
Main Chain
SEEDS
SEEDLING MILLING
(inbred, HARVESTING In house,mobile miller,no
PREPARATION Main Chain Gap
hybrid)lowland/u (Seed Soaking- (67 qu/ha lowland)2 crop/yr upland,2-3 crop broken grain,rice bran
pland 24h,incubation period- /yr lowland,Harvester - taken by farmer
Harvester/thresher(grains output) 3ha/day Sub Chain
varieties,regular 36 h) 40kg/ha
PACKAGING
changing,
(moisture
Sacks,plastic,brandname, Sub Chain Gap
TRANSPLANTING labels
content 12-14 % Wet direct-Broadcast- Critically mismanaged
MC)pure,90- 100kg/ha Dry Direct- TRANSPORTING 71approach
100% GP, 120- 100kg/ha,20mm depth (tractor-
10-15 hp, 1day/ha
140 days trailer,jeepney,cart)
PRIORITIZING THE TECHNOLOGY GAPS/CONSTRAINTS
NO PARAMETERS
1 Marketability
Attractiveness to potential buyers of the product and services
2 Profitability
Able to yield a profit or financial gain
3 Capability and Usefulness
Able to be used for a practical purpose or in several ways
4 Functionality
The quality of being suited to serve a purpose well
5 Import Substitution
Able to replace the product imported from outside of the country
6 Feasibility
State or degree of being easily or conveniently done within MSE’s level
7 Adaptability
Able to adjust into a local condition
8 Potential Impact to the MSE
Able to strengthen the linkages with Micro Small and Medium Enterprises
9 Woman Empowerment
Able to offer equal rights to men and women
10 Employment
Ability to utilize available manpower including persons with disability and72can reduce the
unemployment rate in the country
Group Discussion

7. Technology identification & categorization

➢ technology identification

➢ Technology categorization

➢ linkages between sectors/ sector integration

73
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.

74
 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
75 Processing
Plant
Technology for rice as exam.
VALUE CHAIN TECHNOWARE HUMANWARE INFOWARE ORGAWARE

CULTIVATION Soil Test Kit Prepare land for Seed Quality Seed Center
Improved Iron agriculture crop Manual Soil Analysis
Plough production – FCP Soil Sampling Center
Low Draft Chisel L3 Manual Mechanization
Plough Soil samples and Land Preparation Bureau
Para Plough analyze results – Manual Crop Insurance
Tractor Drawn FCP L3 Seedling Agency
Bed Furrow Maker Establish Nursery- Preparation
Spading Machine FCP L3 Manual
Power tiller Tractor Operation
Rotavator & Maintenance
Spring Tyne Manual
Cultivator
Tractor Drawn
Disc Plough
Tractor Drawn
Disc Harrow
Mini Power Tiller

PLANTING Seedling tray

Transplanter
Transplant
– FCP L2
seedling Transplanting
Manual
76
LINKAGES BETWEEN SECTORS

77
 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. 78
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
79
on hundred percent technology copy manuals.
Group Discussion

1. Who are the Actors

2. Who are Stakeholders

3. What are their responsibilities

80
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
81

 Donors
 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,
82
 ROLE OF ACTORS
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

83
 ROLE OF ACTORS
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 value chain development.
 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,
84
ROLE OF ACTORS

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 value chain development 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,

85
 ROLE OF ACTORS
III. Zonal/district/city offices
 create awareness and build capacity on value chain
development,
 Identifying local growth corridor for value chain
development,
 Involve and work collaboratively with actors in the value
chain development 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,
86
 ROLE OF ACTORS

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, 87
 ROLE OF ACTORS
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,

88
 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,

89
90