Value Chains: Strategic Alliances for Improving Profitability
What is a Value Chain?
A value chain is a business model based on collaboration. An agrifood value chain is a partnership between producers, processors and marketers created to improve quality, increase efficiencies or develop and market differentiated products. Value chains allow members to be more competitive by seeking market opportunities and linking production and processing requirements to meet consumer demand.
The goal of a value chain is increased profits for all value chain partners, as they capitalize on market opportunities and deliver a quality product that consumers demand.
Comparison between a value chain and traditional business relationships
| Business Component | Value Chain | Traditional |
| Communication | Extensive | Little or None |
| Value Focus | Value/Quality | Cost/Price |
| Product | Differentiated Product | Commodity |
| System Driver | Consumer Pull | Production Push |
| Organizational Structure | Interdependent | Independent |
| Business Relationships | Collaborative | Adversarial |
| Source of Supply | Known and Traceable | Anonymous |
| Source of Risk | Relationships | Market and Price |
How a Value Chain can Help Your Business
- increase efficiencies
- reduce costs
- consistency of supply
- market differentiation
- increase food traceability
- knowledge and information sharing
- build and strengthen relationships
- reduce and share risk
- increase profitability
- competitiveness
Growing Your Profitability Through Value Chain Management Workbook
The purpose of the Growing Your Profitability through Value Chain Management (PDF 972 KB) workbook is to assist you in identifying opportunities to improve the competitiveness of your business.
This workbook follows the Lean/Six Sigma methodology which has successfully guided improvements and delivered proven results across many sectors, including agri-food. It achieves this by using value chain knowledge, data and facts as the basis of designing and implementing improvements. The tools are broken into a number of logical phases, with a focus on the customer or consumer.
The five phases are:
- Define
- Measure
- Analyze
- Improve
- Control
To help you systematically identify and implement improvements, the workbook has been designed so it can be completed for an individual business (farmer, a processor, a retailer, etc.), for part of a value chain, or for an entire value chain.
Value Chain Resource Links
For More Information, contact:
Annette Allen
Business Development Specialist
Manitoba Agriculture
Phone: 204-937-7030
