Introduction Objectives Key Questions Steps Step 1     Mapping the core processes in the value chain Step 2     Identifying and mapping the main actors involved in the processes Step 3     Mapping flows of products Step 4     Mapping knowledge and flows of information Step 5     Mapping the volume of products, numbers of actors and jobs Step 6     Mapping the geographical flow of the product or service Step 7     Mapping the value at different levels of the value chain Step 8     Mapping relationships and linkages between value chain actors Step 9     Mapping services that feed into the value chain Step 10     Mapping constraints and potential solutions Step 11     Making a value chain map matrix What Should be Known after Analysis is Complete

Introduction

 

After initial selection of value chains is complete (Tool 1), the next step is to map the value chain. This is a vital step in guiding the analysis of selected value chains. This chapter provides the tools and examples on how to capture the different dimensions of a value chain. To understand the value chain that is to be analysed, models, tables, figures and diagrams are used: ‘A picture is worth a thousand words’. Making a value chain map is a way of making what is seen and encountered more easily understood. This chapter provides tools and examples on how to capture the different dimensions of a value chain.

 

Objectives

 

Mapping the value chain has a number of objectives:

 

·        Gain a basic overview of the value chain to guide the full value chain analysis to be undertaken

·        Identify constraints and possible solutions at different levels in the value chain

·        Identify the location and position of the poor in the value chain 

·        Visualise networks to get a better understanding of connections between actors and processes

·        Demonstrate interdependency between actors and processes in the value chain

·        Create awareness of actors to look beyond their own involvement in the value chain

 

Key Questions

 

There is  no such thing as a comprehensive, all-encompassing value chain map. There are many potential dimensions of the value chain that could be included in an initial mapping exercise: the product flows, the actors involved in the chain, costs and margins at different levels, etc. Therefore, it is crucial to choose which dimensions are to be mapped, based on the available resources, the scope and objective of the value chain analysis and the mandate of the organisation.

 

The following questions can guide what dimensions to map:

 

• What are the core processes in the value chain?

• Who are the actors involved in these processes and what do they actually do?

• What are the flows of product, information and knowledge in the value chain?

• What is the volume of products, the number of actors and jobs?

• Where does the product (or service) originate from and where does it go?

• How does the value change along the chain?

• What types of relationships and linkages exist? 

• What types of services are feeding into the chain?

• What is the location and position of the poor in the value chain?

• What key constraints exist at various levels in the chain and what are potential solutions to those constraints?
• How do products, information and knowledge flow through the value chain?

 

These questions will be used to provide the basis for the steps described this chapter.

 

Take Note

Many of the mapping dimensions covered in this tool are also addressed in other tools in this book. The difference lies in the depth of the analysis. The mapping tool is designed to provide an initial overview of the key aspects of the value chain. This initial overview will be used to guide the subsequent analysis of the chain, based on the later tools in this book.

 

In all dimensions that need to be mapped, the practitioner is to consider the position and role of the poor as actors in the value chain.

 

Steps

 

Step 1     Mapping the core processes in the value chain

 

The first question that must be asked in any value chain analysis is what the different (core) processes in the value chain are. In other words, what processes occur from inputs to raw material through to final consumption of end products?

 

The first step is to find the core processes in your value chain. As a rough guide, try to distinguish a maximum of six or seven major processes that the raw material goes through before it reaches the final consumption stage, including the provision of inputs to produce raw materials. These core processes will differ, depending on the characteristics of the chain you are mapping: industrial products undergo different phases compared to agro-products or services.

 

Tool 2 - Box 1: Example of mapping core processes 

One of the main products in Ninh Binh province, Vietnam is handicrafts made of sedge or sea grass. Typically, boxes or baskets are produced for export markets. As an example, the core processes in the basket export chain are as follows.

 Source:^[1]

 

The example in box 1 above shows a relatively simple linear value chain, with two major final products (baskets or boxes) produced from the raw material (sea grass). However, for many value chains there are more than one or two products produced from the initial raw material, each of which will follow its own set of processes to final consumption. In these cases the process map will be more complex, and involve parallel sets of processes. An example of this type of value chain is cassava, where the final product could be cassava chips for animal feed, or cassava starch for numerous end uses. Figure 1 below shows the potential complexity of a full map of value chain processes.

 

 

Source:^[2]

Tool 2 - Figure 1: Example of mapping core processes in the cassava value chain. This value chain demonstrates the potential complexity of a chain where there are numerous end products

 

Take Note

Is the best way to view the map vertical or horizontal? Depending on the context, a choice needs to be made. There is no right or wrong. Regardless of which choice is made, try to be consistent throughout the analysis.

 

Step 2     Identifying and mapping the main actors involved in the processes

 

Now that the main processes are mapped, it is possible to move on to the actors - the people who are involved in the value chain. The second key question from above prompts this step: Who are the actors involved in these processes and what do they actually do?

 

How to distinguish between actors depends on the level of sophistication the mapping exercise is trying to reach. The most straightforward distinction would be to categorise actors according to their main occupation. For example, collectors are involved in collection, and producers are the ones that produce. This is a starting point, but does not give sufficient information. An addition would be to categorise according to different classifications, such as:

 

• Legal status or ownership (e.g. government, registered enterprise, cooperative, household) 

• Size or scale (number of people involved, micro-small-medium sized enterprise)

Warning

In many value chains, especially in small or weaker markets, there is often no pure specialisation. One actor will take on several different roles. For example, a rice miller will also collect rice and act as input provider. Try to find out what the main occupation of this actor is and categorise accordingly.

 

Tool 2 - Box 2: Example of mapping actors 

An example of mapping actors comes from the Mexican honey value chain from the Calakmul region to the domestic market. This map categorises actors based on legal status and scale.

 Source: ^[3]

 

The result is a map of actors that is still fairly general. The map could be further developed by breaking down the core processes into the specific activities that are undertaken by the different actors that have been identified.

 

Every value chain has its own core processes and its own specific activities. The extent to which the chain is broken down to specific activities depends on the researcher’s judgement. Eventually, it should result in an understanding of where there are gaps or overlapping activities, if there is a potential for upgrading, or simply a better understanding of the situation.

 

Tool 2 - Box 3: Example of mapping of specific activities undertaken by actors from core processes 

The example of sedge handicraft in Vietnam is used again.               Actors     Cooperatives, Private input suppliers Sedge farmers   Collectors   Production enterprises   Exporters   Importers   Retailers   Activities     Growing Harvesting Cutting Drying Splitting Collect Categorize Store Transport Categorize Dry Weave Mould prevention Storage Collect Quality control Storage Transport Quality control Storage Transport      Storage Selling to final consumers

   Source: ^[4]

 

Take Note

Breaking down core processes into specific activities is useful when we turn to analysing costs, revenues and margins (see Tool 6 - Analysing Costs and Margins). The activities can be seen as the cost- or profit centres of actors.

 

Step 3     Mapping flows of products

 

Once steps 1 and 2 are completed, the processes, actors and specific activities in the value chain have been mapped. The third step is to map the flows of products through the value chain. This involves identifying the products at each stage of the process as they are transformed from inputs to raw materials, to intermediate materials and to final products. Mapping these flows creates a clear picture of what forms of products are handled, transformed and transported at each process stage of the value chain. This can be quite simple with products: the stages that the tangible product goes through are simply followed, from raw material to final product. This is especially helpful if a researcher wants to know what stages are used to reach the final product.

 

Tool 2 - Box 4: Example of product flows in the pig value chain, Ben Tre Vietnam 

Process	Inputs to sow-piglet production	Sow-piglet production	Fattening	Procurement	Processing	Consumption
Input Form		feed, medicine, replacement sows	weaners	fattened pigs	fattened pigs	pork, offal
Output Form	feed, veterinary medicine, replacement sows	weaners	fattened pigs	fattened pigs	pork, offal

 

Step 4     Mapping knowledge and flows of information

 

Intangible qualities of value chains, such as information and knowledge, are generally more difficult to capture in a visual map. Be aware that these flows are often going both directions. For example: a trader tells a farmer about product requirements; a farmer gives the trader information about product availability. In Tool 5 - Analysing Options for Demand-Driven Upgrading: Knowledge, Skills, Technology and Support Services, tools are provided that help to track down what kind of knowledge or information flows through a value chain.

 

The role and position of the poor is crucial in this part of the mapping: do the poor participate in the exchange of knowledge? The example in Box 5 shows a map of the knowledge held by each actor in the value chain.

 

Tool 2 - Box 5: Example of mapping knowledge

One of the cash crops cultivated in Northern Laos is soybean. These soybeans are mainly exported to China to be processed into animal feed or cooking oil. A crucial issue, mentioned by all actors throughout the value chain, was the inconsistent quality of the soybeans.   Mapping the knowledge proved to be a useful tool in this case. After interviewing farmers, collectors and intermediary traders (all based in Laos), it became clear that the actors had different views on what quality requirements there were and what quality really meant. A related issue was that the buyers (Chinese processing companies) had never met any of the actors on the Lao side of the border. The map looked as follows:   What are the quality requirements for ‘good’ soybeans?

 Source: Adapted from:^[5]

 

Mapping information involves showing the flow of information between actors at each process in the value chain, as shown in Figure 2 of example below. 

 

Actor	Farmer		Collector		Exporter
		<-----------------------------		<----------------------------
Type of information flow		prices for various grades, timing of demand		international standards for product quality, demand for different grades of product

Tool 2 - Figure 2: An example of the type of information flows 

 

Step 5     Mapping the volume of products, numbers of actors and jobs

 

Some dimensions in value chain mapping can be quantified. For example, what is the volume of products, the number of actors and the number of jobs?

 

The volume of products is closely related to mapping the product flow. The dimension of volume is added to following the product through the value chain. Finding out the volume of product makes it possible to have an overview of the size of the different channels within the value chain. The following examples in Box 6 and Box 7 map the volume as a proportion of the total volume of the whole sub-sector.

 

Tool 2 - Box 6: Example of mapping volumes

 

Tool 2 - Box 7: Example of mapping volumes in a bamboo value chain. By adding the proportional volumes of the product passing through different parts of the value chain it is possible to get an overview of the size of different parts of the chain.

 Source:^[6]

 

Two more dimensions that are quantifiable are the number of actors and the employment opportunities they offer. These two dimensions are closely related to each other. Following on from listing the actors in Step 2 the next step is to find out the number of each type of actor. The number of poor, being a part of the actors in the different steps, is a dimension that can be covered in this stage of the analysis.

 

An example of volume mapping the catfish value chain in the Mekong Delta of Vietnam is presented in Box 8. In another example, Box 9 maps employment in the vegetable retail trade in Vietnam.

 

Tool 2 - Box 8: An example of volume mapping in the catfish value chain 

 

 Tool 2 - Box 9: Example of mapping the number of actors and employees involved in vegetable retail in Hanoi, Vietnam 

Vegetable retail in Hanoi takes place through many channels. The following example shows that these different outlets differ in number, but also in number of employees.

 Adapted from:^[7]

 

Warning

Measuring employment can be difficult, especially when part of the value chain is in the informal sector. Some problems that arise are how to count part time employment, and what constitutes full time employment. Tool 8 – Analysing Employment Distribution will deal with these and other matters.

 

Step 6     Mapping the geographical flow of the product or service

 

Based on the mapping of processes, actors and product flows, it is relatively straightforward to develop a geographical map, following the trail of the product or service that is to be mapped. The first step is to identify where each of the processes in the value chain are physically located (for example, where are the farms, primary processors, and secondary processors). Start at the place of origin (i.e. where it is cultivated) and see if it is possible to map how the product travels from intermediary trader to wholesaler, retailer and final consumer. If possible, a map of the region can be used to indicate the physical flow on it. Making this kind of map will make it possible to capture a dimension of the product flow (volume, margin, number of actors) and show the locational or regional differences. The picture in Figure 3 below shows information about a sugar value chain transferred onto a geographical map of the province. Preparation of this map greatly facilitated the organisation of subsequent fieldwork to conduct the full value chain analysis.

 

 

Source:Mapping Exercise for Sugar Value Chain, Cao Bang, Vietnam, ^[8]

Tool 2 - Figure 3: Example of geographical mapping of the sugar value chain  

 

Source: ^[9]

Tool 2 - Figure 4: Example of geographical mapping of fresh produce supply in Zambia

 

Step 7     Mapping the value at different levels of the value chain

 

A core element of value chain mapping is to map the monetary value throughout the chain. This is covered by the key question: How does the value change throughout the chain?

 

Value is something that can be measured in many ways, and this will be discussed in more detail in Tool 6 – Analysing Costs and Margins. The most straightforward depiction of a monetary flow would be to look at the value that is added at every step throughout the chain, providing an overview of the earnings at the different stages. Other economic parameters are, amongst others, revenue, cost structures, profit, and return on investment.

 

Tool 2 - Box 10: Example of mapping value added throughout the chain 

In India, saris (women’s dress) are made with handlooms. The following example is a map of the value chain in this sub-sector. The value is the price in rupees (Rs.) at which the sari is sold to the next actor in the chain.

This example shows that producers (weavers) actually add the most value, both absolutely (Rs. 138.4) and relatively (125% value addition). However, this does not tell us about the profit margin of the producers. To assess that parameter, an analysis of costs needs to be made (see Tool 6 – Analysing Costs and Margins).

 Source: ^[10]

 

It is important to recognise that at the mapping stage of the value chain analysis very little accurate information may be known about costs, margins and profits at different process levels within the value chain. It is most likely at this stage of the analysis that only price information is known at each process level.

 

Step 8     Mapping relationships and linkages between value chain actors

 

Mapping linkages between value chain actors starts with mapping the actors in the value chain, as described in Step 2 of this tool. A next step is to analyse what kind of relationship actors have to each other. This is prompted by the following key question: What types of relationships and linkages exist?

 

Relationships can exist between different process steps (e.g. between producers and traders) and within the same process step (e.g. farmer to farmer).  Relationships or linkages between similar actors can be mapped according to three broad categories:

 

1. Spot market relations: These are relations that are created ‘on the spot’, that means that actors make a transaction (including negotiations on price, volume and other requirements) with the duration and scope of that specific transaction. This is typical for transactions made on a fresh vegetables marketplace: buyer and seller meet, come to an agreement (or not) and break up the relationship. These can also be described as ‘arm’s length relationships’.

2. Persistent network relations: When actors have a preference for transacting with each other time and time again, we can speak of a persistent network relation. This comes with a higher level of trust and some level of interdependence. This relationship can be formalised by contracts, but this is not a necessity.

3. Horizontal integration: This goes beyond the definition of a ‘relationship’, since both actors share the same (legal) ownership. One and the same organisation (this can be an enterprise, or a cooperative) deals with different processes throughout the value chain. The ownership structure can be partial or full.

4.  

 IIn order to map these types of relationships, different lines and arrows are used. The following example clarifies this.

 

Tool 2 - Box 11: Example of mapping relationships and linkages 

The following example is based on the sedge handicraft sub-sector in Vietnam. Most linkages are persistent. This example is representative for sectors in which high quality requirements and differentiation (design of handicrafts) are crucial.

 Source: ^[11]

 

Step 9     Mapping services that feed into the value chain

 

A potential risk with value chain analysis is that the world surrounding the value chain is not taken into account. Crucial information might be found in the rules and regulations that are governing (parts of) the value chain or in services that are feeding into the chain. Mapping these services will give an overview of the potential for interventions outside the value chain itself. This is covered by the key question: What types of services are feeding into the chain? 

 

Tool 2 - Box 12: Example of mapping business services 

One of the major constraints of the sedge value chain in this example is the lack of services, especially in the first steps in the value chain.

The sources and payment procedures of these services are different: embedded, fee based or for free (subsidised). A separate map can be drawn to make this visible.

Source:^[12]

 

Step 10     Mapping constraints and potential solutions

 

Constraints exist at almost all process levels of any value chain. For example, these could be constraints to greater efficiency, constraints to upgrading or constraints to greater involvement of the poor. Initial identification of these constraints should be made at all process levels and in addition, identification of potential solutions can be made.

 

Tool 2 - Table 1: An example of mapping constraints and possible solutions 

	Input	Corn production	Procurement	Processing
Input		Seed Land Fertilisers Agronomic practices	Corn pips
Activities	Supply of inputs	Corn planting Crop husbandry Harvesting Semi-processing Pip preparation	Packing Transporting	Drying Milling
Actors	Input suppliers (e.g. fertilisers) Extension officers (crop husbandry techniques) Agricultural research stations Farmer Unions Material supply agents	Farmers planting, managing the crop, harvesting and semi-processing	Commune collectors, District collectors, Province collectors	District trading companies, Small milling households
Difficulties		Untimely fertilisation Thorn worm epidemics Lack of production techniques Too high expenses for good quality seed Lack of capital	Lack of corn for procurement High transportation cost Difficult transportation High tax	Spoilt corn Lack of drying technology
Feasible solutions		Selling fertiliser on credit earlier Training agricultural promotion staff at village level Supply quality seed on credit Lending	Suitable tax policies	Investment in drying technology

 

Step 11     Making a value chain map matrix

 

Once mapping of the various dimensions of the value chain is complete, a value chain map matrix can be constructed which summarises the key information from the maps in one table. The matrix can be used as the basis for designing questionnaires, determining which actor groups to interview and which geographical locations to concentrate field work in. The matrix can also serve as an easy to interpret sector summary from a value chain perspective. Examples of a value chain matrix are given in Figure 5 and Table 2.

 

Source:^[13] 

Tool 2 - Figure 5: Initial matrix prepared after value chain mapping exercise

 

Tool 2 - Table 2: Information transferred to final matrix 

	Inputs	Production	Collection	Pre-processing	Factory processing
Inputs		Seed, fertiliser, plant protection drug Technique, soil, labour source Capital	Fresh leaves and buds	Fresh leaves and buds	Fresh leaves and buds Dried leaves and buds
Activities		Producing fresh leaves and buds	Collecting fresh leaves and buds Selling to factory	Drying Preservation	Buying fresh leaves and buds Pre-processing buds Selling finished products
Outputs	Seed, fertiliser, plant protection drugs Technique, soil, labour source Capital	Fresh leaves and buds	Fresh leaves and buds	Dried leaves and buds
Actors	Seed company Fertiliser agency Plant protection agent Extension centre Bank	Farmer	Collectors	Local level small scale (household)
Location and participation of the poor	Not much	Planting à Management à Protection à Harvesting	Not much	Some involvement	Limited (some workers)
Challenges		Plant protection Difficulties in getting good quality varieties Lack of technical knowledge	Difficult to transport	Preservation difficult Lack of funds for effective kilns
Possible solutions		Periodical spraying Changing planting mechanism Setting up convention Technical training (plant production)	Upgrading roads	Investment in kilns
Location		Thach An, Hoa An	Thach An, Hoa An	Thach An, Hoa An, Cao Bang town	Cao Bang town

 Source:^[14]

 

What Should be Known after Analysis is Complete

 

This tool has given an overview of the different dimensions that can be mapped and offered suggestions on how to map them. 

 

Developing initial value chain maps and a map matrix provides a firm basis for undertaking the full value chain analysis described in the following tools. In particular, after the mapping exercise is complete, practitioners should be able to determine which value chain actors should be interviewed, what information should be gathered, what significant information gaps exist, and what the geographic locations for field work are. 

 

The next chapters provide tools to help analyse the dimensions that you wish to map.

 

Useful Examples

 

Example 1: {Title}

 

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Example 2: {Title}

 

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Links to Other Examples

 

Author	Title	Description of Tool	URL Link