This stage involves:
1. Action planning
Access to market is an action learning experience; the only way to truly understand all the opportunities and challenges a value chain will face is by putting it into practice. In Section 5 and Section 6, you have learned enough to be able to envision who the value chain participants and partners will be; what the value chain will produce; who the buyers will be; and what it will take to make it a profitable and wealth building exchange. Now it is time to experiment with actual production, packaging, and sales on a limited basis to see whether the producers’ group can actually work together to meet its members' demands related to food security, income generation and sustainability, and at the same time meet market standards.
Action planning is a tool for organising for market access. It provides a map of all the steps required to understand and meet market requirements. For example, it is not enough to know that the buyer you will work with wants blue scarfs. You must also know the size, range of acceptable materials, patterns, packaging and other features the buyer must have to be able to sell the scarves to his or her customers. You need to know when the scarves are in demand so that you have them ready when the buyer needs them. You may need to experiment with different materials or treatments to be sure the scarves are colourfast and won’t shrink when washed. If appropriate, you will need to organise the whole production system and the processes among the members of the collective. You will need to line up a supplier for the raw materials as well as the equipment needed to produce the scarves. You will need to figure out how long it takes to produce a scarf and consider how to make the production process as efficient as possible. You will need to set up communications with the buyer so that they can place orders and you can let them know when they will be filled. You will need to negotiate prices and risk sharing with the buyer. Action planning is the process of thinking through the steps that must be taken to put the value chain into action and learning from your experiences.
- River of Change Action Plan.
2. Business planning for the value chain
If economically marginalised people and places are to benefit from value chains over the long term, the producers’ enterprise must be profitable and the informal and/or formal contracts between producers and others in the value chain must be fair and equitable. If others in the value chain are profitable, but producers are not, the value chain has not achieved its objectives. This Toolbox Section provides the tools to look closely at the producers’ group as a business within the context of the entire value chain. The Business Model Canvas is used to define the business. This, combined with the income and expense analysis and risk analysis completed in Section 5
, and the analysis of competition completed as part of the assessment of demand in Section 3
, provides a solid basis for action planning for proof of concept.
The Business Model Canvas brings together the two halves of a value chain; the half that creates the product (the producers) and the half that buys it (the buyers) in one place. It is used to help producers’ groups define the key components of the business beginning on the buyer side. Producers’ groups define who the buyers are, the business’s value proposition (what it delivers to its buyers), how it delivers to its buyers, how it communicates with its buyers, and the income streams that come from its buyers. Then producers’ groups define their own cost structure, key resources, key activities and key partners. The business canvas creates a clear picture of the business model and can be used to communicate with buyers, partners and investors. Buyers can work with producers to complete the Business Model Canvas or to better understand their own businesses.
3. Plan for reflection and learning
Learning happens when we act and then reflect. A lot of activity is required to establish and test a value chain and new information is constantly coming to light. Therefore, it is critical to establish a regular schedule of reflection after each period of activity. The combination of the Business Model Canvas and the Problem Tree and Solution Tree, informed by the work accomplished in all previous Toolbox Sections, provides a basis for understand the starting point and the desired future for producers’ groups.
The tool, Performance Indicators for Three Dimensions of Change suggests some of the positive changes that may occur as value chains gain steam. We encourage you to think about other desired changes as well, particularly those related to the other forms of wealth. Scheduled periods of reflection can be used to determine if positive changes are occurring and, if not, why not. Reflection should lead to modifying activities by adding new ones, stopping existing ones or changing the way activities are carried out to improve outcomes. The results of reflection should be recorded in revisions to the Problem Tree and the Solution Tree that are re-visited at the next reflection time. Reflection need not be limited to only members of producers’ groups; other participants in the value chain or supporters may also have valuable things to contribute.
You should now be able to answer the following questions:
- What is the business model of the producers’ group? How does the business of the producers’ group fit into the overall value chain?
- What is the action plan for piloting the value chain by interacting with real buyers?
- What is the producers’ group’s plan for ongoing reflection and learning?
- How will other participants in and/or supporters of the value chain be engaged in reflection and learning?