Professional Documents
Culture Documents
Polytechnic College
November, 2018
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What is your expectation
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Content
Introduction
Meaning
Objectives
Scope(what/where, which are)
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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.
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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.
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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
Providetechnological 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
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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.
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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.
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VALUE CHAIN CONCEPTS
AND DEVELOPMENTAL
APPROACH
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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
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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
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Cont…
market.
.
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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
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CATEGORIES OF THE VALUE CHAIN
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.
It should be developed at sector or sub sector level with the involvement of technical
experts from the sectors
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Example:- EXTENDED VALUE CHAIN
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Cont…
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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
leather to production of leather bag)
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Example: SIMPLE VALUE
CHAIN
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Cont…
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Cont …
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1. What are the steps of value chain
development?
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STEPS OF VALUE CHAIN DEVELOPMENT
2. DATA COLLECTION
VALUE CHAIN 3. VALUE CHAIN MAPPING
DEVELOPMENT 4. VALUE ANALYSIS
AND
5. GAP IDENTIFICATION
PHASE
SOLUTION
6. PRIORITIZING CONSTRAINTS
Evaluation
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GTP
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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
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national GDP.
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
developed for products that have a potential to diversify.
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POTENTIAL IMPACT ON MSE, YOUTH etc.
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WOMEN EMPOWERMENT
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DATA COLLECTION
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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.
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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
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Cont…
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Examples
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BENCHMARK(TO BE)
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AS IS
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BENCHMARK
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AS IS
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BENCHMARK
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Group Discussion
4. VALUE ANALYSIS
5. IDENTIFICATION OF GAPS/CONSTRAINTS
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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.
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Method of Comparative Analysis
Line Graph
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FOUR PARAMETERS
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Example: FOUR PARAMETERS
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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.
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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.
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IDENTIFICATION OF GAPS/CONSTRAINTS
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IDENTIFICATION OF CONSTRAINTS/GAPS
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
technology identification
Technology categorization
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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).
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
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VALIDATION
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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
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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,
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ROLE OF ACTORS
B. Research institutions and universities
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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,
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ROLE OF ACTORS
based training,
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,
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ROLE OF STAKEHOLDERS
provide consulting.
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