Project Lead
Challenges
Value chain analysis focuses on the dynamics of complex linkages within a network. Both value creation and value capture occur in a system that includes suppliers, distributors, partners, and collaborators, thus extending a business’s access to resources and opportunities.
The starting point of the value chain analysis requires “mapping of the market” to track and analyse the contribution of the different chain actors and the relationships among them. An understanding of the interactions within a value chain helps identify the factors that influence the chain performance. The resulting market map defines the value chain actors, the enabling environment, and the service providers.
Supply chain mapping allows businesses to put strategies in place to rapidly react when a supplier faces a shortage, an order gets lost in the system, if there is a surge in demand or if something even more unexpected happens. It can also facilitate a deeper understanding of the surrounding costs, timeframes, and risks providing competitive advantages.
The Scottish Government is committed to growing Scotland's food and drink industry and bringing benefits to the nation in terms of jobs, wealth, and international renown. There are significant challenges because of the Covid-19 pandemic and the UK’s EU-exit. There is a need to better understand major Scottish supply chains and to use this knowledge to increase the value created by the chains for benefits to be distributed equitably.
The key policy drivers of this project are:
- Good Food Nation policy: aiming at ensuring food companies are a thriving feature of the economy and places where people want to work
- Scottish Government plans: supporting the food and drink industry
- Scottish Government plans: promoting sustainable production and procurement as it wants domestic produce that is increasingly healthy and environmentally sound
- Ambition 2030: Industry Strategy for Growth: A challenge for the industry is that success and growth must translate into greater profitability at the farmgate and on the fishing boat
- EU Exit: understanding to what extent the UK leaving the EU has affected the Scottish supply chains
Questions
- Which supply chains are important for the Scottish Food and Drink industry and where are the opportunities to add or recapture value?
Solutions
This project is mapping major food supply chains both within Scotland and those where Scottish industries are heavily involved to improve the understanding in the way they operate. To achieve this aim, we propose a methodology to be able to update changes in the maps, a modelled analysis of individual sectors that demonstrates where value is created, added, and lost during the supply chain, and to use the modelled analysis to simulate various scenarios whereby the value in the supply chain could be increased and distributed in Scotland among producers and processors.
A new methodology for mapping supply chains
We are conducting a literature review and using these insights to develop a methodology to produce updated maps of supply chains in Scotland.
Mapping Scottish food supply chains
Using this methodology, we are mapping selected food supply chains both within Scotland and those where Scottish industries are heavily involved. The maps identify
- The transformation of products from raw materials along the chains
- Modelling the value added along the selected chains
- Identify bottlenecks and where value opportunities are missed
Overall, this project aims to generate a better understanding of the food supply chains and to identify ways to increase the value-added from the chains. The analysis helps to identify sources of innovation, such as possibilities for product development, new or improved processes or technologies to increase efficiency, profitability, and sustainability of the supply chain.
Project Partners
Progress
This project consists of two objectives; Objective 1 (framework to map supply chains) and Objective 2 (mapping the pork supply chain). Both consist of several sub-objectives, with those for Objective 1 including: i) to produce a literature review, ii) to formulate a methodology for mapping supply chains and iii) to formulate a methodology to update the maps. While the sub-objectives for Objective 2 consists of i) to map the supply chain (for which we have had interviews with stakeholders), ii) to provide a description of the maps, iii) to implement the methodology to update the supply chain information, iv) to complement information with quantitative information, v) to model the value added along the selected chain, vi) to identify all the factors that may improve the value creation on the chains and vii) to report the results of this exercise.
Several types of supply chain mappings were reviewed, their purpose and data requirements (the project is related to the distribution of value added amongst supply chain stakeholders). Both quantitative and qualitative maps (which are complementary) are considered. The quantitative map type consists of collecting statistical information regarding the supply chain, which is useful for the analysis of resilience to shocks. For the quantitative analysis we have used information from the Economic Report on the Scottish Agriculture, the pork production survey and Kantar Worldpanel data. For the qualitative mapping we have benefitted from the work carried out by the Scottish Agricultural Organisation Society (SAOS). Collecting quantitative data for all supply chains, is not possible, but it has been attempted for the pork supply chain combining information from producers, abattoirs and products at the retailer level (Kantar Worldpanel data). The qualitative map type is based on interviews with stakeholders and has benefitted from mappings carried out by SAOS - these are useful to explore details such as collaboration or specific activities.
Related Projects
This work aims to understand the relationship between Scottish consumption of domestic food and drink products versus imported products; and whether purchases of a particular provenance are due to prices or other reasons. Furthermore there is a need to understand the relationship between Scottish exports and domestic demand for those exported products and to what extent the goals of the...
- Food Supply & Security
- 2016-2022