3 poor reasons for not belonging to a value chain


Producers double their profits in 18 months by changing the way they market their products, trimming their costs and increasing their revenues.

√Čtienne Gosselin | Agronomist | Journalist

Dr. Martin Gooch, Director of Value Chain Management International in Oakville, Ontario, is an internationally recognized expert in value chains. Here he cites a few poor reasons for not belonging to one.

Basically, no one can afford to not be part of a value chain!

1) It's too risky: Actually, the greatest risk is doing nothing! The key to success is starting small with low expectations. For example, you can approach a supplier, buyer or another producer and expand the chain in steps.

2) Value chains aren't for me: Conversely, all businesses are part of a chain of one kind or another. It's how the business operates. And by analyzing the way we work, we can understand how to better produce and how to increase customer satisfaction. That's the first step towards a larger value chain that goes beyond the business.

3) I'll lose control if I'm part of a value chain: It's just the opposite--by working with other businesses, you actually have more control. For example, a larger group has more influence on consumer behaviour. Another example: by joining together, agricultural producers can get better prices on inputs.

The merits of value chains are recognized--but how do we measure them? Martin Gooch estimates the average financial gain for all sectors to be 10-20% in under 3 years. "I've seen producers double their profits in 18 months by changing the way they market their products, trimming their costs and increasing their revenues, while producing a more standard product more consistently, that meets buyers' needs and expectations."

You might also like to read: Value chains: when 1 + 1 equals 3

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