USAID Module 1: Understanding Value Chains
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The document outlines a facilitator guide for a workshop focused on understanding value chain systems, emphasizing the significance of systems thinking to enhance performance and meet market demands. It includes methodologies for group activities, such as role play to illustrate the roles of various actors in a value chain, and provides guidance on facilitation techniques for effective training. The overarching goal is to foster cooperation among market actors to create wealth and improve project implementation outcomes.
USAID Module 1: Understanding Value Chains
- 1. FACILITATOR NOTES MODULE 1: UNDERSTANDING VALUE CHAIN SYSTEMS Module Learning Objective To introduce the importance of systems thinking to improve the performance of value chains to meet end market requirements and create broad-based wealth Session 1: Introduction to Value Chains Objectives To understand actors and interconnected systems within the value chain framework To introduce actors in one of the project’s target value chains Methodology Large group activity Key Messages Value chains are made up of multiple roles and functions performed by interdependent market actors—many of whom are not part of the core system (e.g., rules setters, service providers) You must understand the organization and structure of a value chain system before determining what your project will do Timing Approximately 45 minutes Materials Identity Cards Activities ACTIVITY: Value Chain System Role Play Welcome: Brief (60-second) introduction. Logistical Setup: Give each participant an Identity Card that states the generic name of a value chain actor in one of the project value chains. Hand out a few blank cards for entrepreneurs to find new opportunities or gaps to fill. Ask participants to “find their market”—link with those actors that they buy from and sell to. Allow at least 10 minutes for participants to meet others in their roles and try to make deals. Debrief: After 10 minutes, discuss starting with “Who was successful? Who wasn’t? Was the system efficient?” Draw out key terms: who are the players, type of relationships (vertical and/or horizontal) nature of relationships relative to how they compete and/or cooperate? Summarize: This is a system – multiple players, multiple functions – you can call it a value chain, a market system, or a value chain system. Our picture of a system includes many players, many of whom are not part of the tightly linked chains that transform raw materials into finished products and transport or distribute them to a range of end markets. Our picture is going to be much broader than typically can be seen through the eyes of one player (a processor, a farmer, a farmers’ cooperative) or from our “target group” typically small Facilitator Notes: Module 1 1
- 2. farms or firms within a much broader and complex system. Our goal is to shift the purpose of the system away from a norm of everyone for him/herself to one where all system players find better ways to compete and cooperate in order to achieve a collective purpose of constantly upgrading to meet end market requirements that results in wealth creation (e.g. growth with equity). Facilitation Tips Decide how far you want to take this activity beforehand. It could become a central way to explain most concepts in the curriculum and continue for a long time. There may not be time to debrief with each actor, depending on how much time you have and how many participants there may be in the room. Ensure a large space is available in or outside the training room that participants can move around in freely for this activity. During the debrief, ask open-ended questions to encourage participants to discover information and raise issues themselves, rather than lecturing and providing answers. A simple way to distinguish between vertical and horizontal linkages is to keep in mind that vertical means firms performing different functions, whereas horizontal refers to firms performing the same function. Potential Questions from Participants If participants ask for clarification on what to do or to obtain more background on their roles, try not to give any additional instructions as they will figure the process out as they move forward. Tell them that they can make any assumptions about their roles and the instructions that they wish. Discussion / Debrief Questions To introduce end-consumer preferences and end-market demand: Ask end-consumers: “What kind of / quality of end-product do you want?” As you proceed to other actors, you could refer back to the qualities or specifications introduced, by asking “Do you know what the end-consumer wants? What are you doing to ensure that you are able to provide this?” To introduce multiple market channels: “Where does the chain split/separate to link to differing end-consumers or end-markets?” To introduce understanding that chains do not work neatly step-by-step and that actors often bypass other actors: “Can anyone sell directly to any of the actors higher up the chain or do you have to go through the others that are immediately next to you in this role-play?” “What are examples in this role-play situation where this does or could occur?” Conclude by summarizing the basic functions being taken on by various groups of roles in the chain and how the value chain can be plotted according to these functions (e.g. end consumer/retailing, exporting, packaging processing, producing, input supplying) Exploring rules and norms: “Did anyone consider regulations and rules as part of their chain?” “What are examples of specific actors that do act or could act that represent these?” (E.g. government, policy makers, regulators) “Did you only consider formal rules?” “What about informal rules, what are Facilitator Notes: Module 1 2
- 3. examples of these?” (E.g. taboos, cultural norms) Adaptations / Variations Preparation You may want to have participants retain their roles throughout the workshop so that you can ask them how they would respond in certain circumstances and also introduce new players with people taking on new roles as the workshop progresses. These roles could potentially be written directly onto participants’ name badges. Prepare Identity Cards o Prepare miniature cards each with one generic name of a value chain actor in one of the project value chains, either preprinted or written directly onto card). Print the name in large letters on each card. o If possible, get name badge holders or stickers with the names on it so that each person’s card can be easily seen by the other participants. o Ensure there are enough for one card / role per participant. o Using pictures on the cards can add value, especially to groups not familiar with more formal training techniques and which prefer less writing. For example: Banks could have picture of a local bank, an input supplier could have pictures of seeds and fertilizers, an equipment supplier could have pictures of a piece of farm equipment, etc. Simple words could work well too, however, as they allow participants to visualize their own context directly. Rice Value Chain System Actors 1. Importer of Long-Grain White Rice 2. Local White Rice Trader 3. Local Paddy Trader 4. Large-Scale Paddy Miller 5. Medium-Scale Paddy Miller 6. Community Hand Miller of Paddy 7. Community Hand Thresher of Paddy 8. Retail Grocery Outlet 9. Open-Air Food Market 10. SME Agro-Input Dealer 11. Large Input Supply Firm 12. Small-Scale Paddy Farmer 13. Commercial Long-Grain Paddy Farmer 14. Small-Scale Emerging Commercial Paddy Farmer 15. Community Leader/Chief 16. Rural Transporter 17. Tractor Service Provider 18. Owner of Agricultural Crop Warehouse 19. Ministry Of Agriculture Official 20. Rural Bank Manager 21. Credit Officer from a Large Bank 22. Radio Station Manager 23. Spray Service Provider 24. Ag Extension Officer 25. ICT Firm 26. Ag Equipment Dealer Facilitator Notes: Module 1 3
- 4. Facilitator Notes: Module 1 4
- 5. Module 1 Session 1 Rice Value Chain Actor Role Play Session 2: Course Objectives and Agenda This session provides basic guidelines on how to introduce the workshop objectives, presenters, and agenda or route map for the learning. Objectives To introduce the workshop objectives and agenda To align workshop objectives with participant expectations To introduce the workshop presenters Key Messages Key Workshop Objectives: o To orient and train staff on value chain systems approach to project design and implementation o To ensure that everyone on a project is working towards the same goal, with the same vision, and working with market actors in a consistent way o To orient and train staff on facilitation practices, including developing an on-going staff/project capacity building plan o To develop internal knowledge management practices and systems that will ensure effective implementation o To operationalize the work plan based on market facilitation best practices o To result in more detailed action plans for the project components and staff Timing Approximately 20 minutes Methodology Presentation Materials Agenda/PowerPoint slide with workshop objectives Activities / Presentation PRESENTATION: Introduce Goals andObjectives Hand out agenda Ask participations for their expectations Compare participant expectations against agenda Try to satisfy any mismatch with time for issues not covered by the agenda PRESENTATION: Introduce Presenters Provide background to the experience and expertise of the workshop presenters to give credibility to the information that will be shared and presented. PRESENTATION: Introduce Participants(optional) You may decide to ask each participant to introduce themselves and their organizational affiliation, although this could take extensive time. You may prefer to simply have participants wear name badges with the names and organizations written in large, easily legible letters. PRESENTATION: Introduce Agenda Expand a little further on each of the modules and sessions as they are Module 1 Session 1: Rice Value Chain Actor Role Cards 1
- 6. introduced as part of the agenda, giving a few examples or additional learning points that will be explored in each of the sections. You may list these on the PowerPoint, write them on a flipchart or put up a diagram which shows the Route Map that participants will move through during the workshop. This Route Map can be used at various times throughout the workshop, preferably at the start of each day, start by reflecting on what was covered previously and where on the Route Map (agenda) the participants currently are and where they are going. Show participants where they have been and where they will be going as they explore topics during the workshop. Ask if there are key questions that you would like answered through the workshop? State whether or how they will be addressed throughout the project. Discussion / Debrief Questions When project staff and partners are from different places around the country, there is a need to ensure that everyone is on the same page in terms of the project and how everyone will be operating. This type of workshop is particularly important at the startup phase of the project to ensure that everyone is aligned around the same vision for the project. This will allow project staff and partners to gain the knowledge and skills to share this thinking with others in the field, such as other field project and partner staff, or with private sector players and other value chain actors. When workshop participants reread the project workplan after the workshop, the aim is to ensure that everyone understands the workplan in a more similar way. Adaptations / Variations Route Map: You can leave this up throughout the workshop and refer to it during the debriefs. You may decide to write key messages on colorful cards and put these under the various parts of the route map as you finish each session, leaving these on the wall throughout the training. Facilitation Tips It is better not to provide participants with exact time slots for each module or activity on the agenda because it lets them know if you are running over or under time. It also reduces your flexibility to change the focus or timing of the agenda. For this reason it is useful to only provide the start and end times for the entire day. Preparation Project Vision Poster: Prepare a large page that states the overall project vision. Route Map Poster: Prepare posters along wall which represent workshop Route Map. Route Map Handout: You may also decide to print a copy of the Route Map for each participant. Agenda Handout: You may decide to provide a copy of the agenda for the workshop to each participant, although it may be better to simply provide the Route Map. If the agenda is provided, do not include times for individual sessions. Session 3: Value Chain System Elements
- 7. Objective(s) To understand principles that guide our work. To understand definitions and basic interrelationships between value chain actors. Key Messages Value chain systems involve interdependent players interacting together for a common purpose best achieved through the effective functioning of the whole system to meet end market requirements resulting wealth creation A system can be simple or complicated, with many functions and players, rules, and support services – but all systems are complex with individual firms competing against each other and cooperating with each other in order to provide value to the end-market consumer. Materials PowerPoint slides (3 slides) Timing Approximately 30 minutes Methodology Brief presentation of framework followed by plenary discussion on system principles and why they are important to understand as guides to our work. Activities ACTIVITY: Presentation Slide 1: Key Terms and Definitions Delivering value to end market consumers is the starting point for understanding how a market system works. Supply is organized by transforming raw materialsintofinished products and delivering them to end market consumers. Inter-firm relationships are both vertical (firms doing different things) and horizontal (firms doing the same things) How well value chain actors perform their functions is influenced by: o inter-connected systems and o rules of the game. Think of inter-connected systems as other systems—both commercial and noncommercial—that cut across many value chains. These might include the following: o Sector-specific commercial systems: agriculture services like tractor or spraying or agriculture equipment sales or leasing. o Cross-cutting commercial systems: banking, legal, accounting services. o Cross-cutting non-commercial systems: educational, advocacy, consumer protection services. Think of rules as the values, beliefs, customs codified either as formal laws and regulations that govern business or as informal norms and practices that influence entrepreneurship and business. Rules are formal and informal and cut across geographic boundaries from local communities to the global economy. Slide 2:Inter-Connected Systems The solutions to unlocking pro-poor growth potential in rice, for example, may be solving problems in inter-connected economic systems such as manufacturing or services.
- 8. The example in slide two illustrates the importance of inter-connected systems by understanding that a rice farmer plays two roles: o a producer of rice who must satisfy his or her buyer’s requirements;and o a consumer of goods and services whose requirements must be met by suppliers (e.g., services, inputs or equipment). Slide 3: System Elements Three core aspects – value chain relationships, rules and inter-connected systems – will guide the successful interaction of inter-dependent market actors (private, public and civil society) to create wealth by continuously meeting changing market requirements. Facilitation Tips Potential Questions from Participants and Suggested Responses Create a flip chart on key terms: At the beginning of the workshop key terms will be used loosely and they need tightening. Add new and unfamiliar terms to this list and arrive at a working definition for each. Key terms to get on the list now include: o System o Multi-function o Multi-player o Relationships o Rules o Inter-connected Systems o Performance/upgrading Ask open-ended questions to encourage participants to discover information and raise issues themselves, rather than lecturing and providing answers. Many participants will likely have more grounding in understanding the firm than in the larger economic systems in which they operate. The objective of the entire 5 day program is to “change the way participants think” about their work by introducing and working with a value chain system approach. Clarify the terms and their meaning as much as possible but avoid trying to get everyone on the same page on the first day. Use simple analogies to help participants understand a system: for example, the human body is a system with inter-dependent parts that must work together to be healthy and happy.
- 10. Module 1 Session 1 Rice Value Chain Actor Role Play Task You are the actor on the card and you are asked to conduct the following activities: Identify the most important other actors to you and what exchanges or business transactions you can make with them. Be prepared to explain why they are important to you and what deals you made with them. Module 1 Session 1: Rice Value Chain Actor Role Cards 1
- 11. Importer of Long Grain White Rice
- 18. Retail Grocery Outlet of Rice Products
- 19. Open Air Food Market of Rice Products
- 31. Credit Officer from a Large Bank
- 35. ICT Firm