Supply chain management

The distinguishing feature of the ASLP mango project was the involvement of participants from all stages of the mango production, distribution and retail sectors in the planning and implementation of the program‟s activities. The objective of this cross-sector involvement was to demonstrate that by working co-operatively the participants could create new market opportunities through building better linkages between growers and their markets.

These linkages involved understanding what consumers in specific market segments required (market knowledge), providing fruit that met these requirements (quality management) and delivering the fruit in a reliable and efficient manner (logistics management). Collectively these requirements involve a coordinated management of the supply chain servicing a specific market segment.

4.3.1 The existing supply chain management practices

The Scoping Study indicated that both domestic and export supply chains were being managed sub-optimally:

 there were few if any attempts to understand the needs of consumers in the various markets because the existing customers were familiar with Pakistan mangoes and their quality limitations and their low price

 information flows between members of the supply chain were predominantly concerned with supply management

 relationships between supply chain members, while in some cases long standing, were opportunistic and characterized by imbalances in power

 Poor infrastructure – roads, trucks and a lack of cool storage contributed to poor quality management.

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These findings were confirmed by the core respondents:

We are dependent on commission agents to dispose of our huge production at a certain value and no cooperation at all exists which motivate us to go for premium quality.

(Grower 4)

We contracted the orchard on lump sum value therefore we have to cover our investment cumulatively for all types of mangoes, (this is) the commission agents who know better to sell mangoes of different quality on different price. (Contractor 1)

Why (we) make the fruit more attractive if we are not getting the appropriate price. If we go for additional value we have to bear additional costs for grading, cleaning and packaging, which are very high and commission agents are not interested in high quality mangoes. (Grower 6)

In the existing exports system there is missing of links between the quality produced and the quality demanded and we do not know how to document the whole process.

(Exporter 1)

The absence of cool chain system between the farm and the market as well as insufficient space for storage at Karachi Airport and delay in flights schedule during the mango season are some critical issues to deliver premium quality. (Exporter 2)

These data confirm that there was an absence of integration of processes in the product flow from farm to market due to lack of incentive, absence of trace-back system and inadequate infrastructure facilities.

Dissatisfaction with the present system was evident amongst the core respondent growers and commission agents:

We are highly dependent on contractors/commission agents and exporters and they do not provide any feedback of the market which in fact is undermining our product value.

Therefore some of the progressive growers are seeking to go for direct marketing to some specialised super stores and supermarkets in order to update themselves about the market prospects. (Grower 4)

Technical issues at the farm level are very important and will determine the basis of our future relationships with exporters and commission agents, particularly in terms of value appropriation. (Grower 1)

I cannot say anything with confidence at the moment …but more technical and market information may develop the new links therefore it may change the mango industry look.

(Commission Agent 2).

The Scoping Study identified that the emergence of superior fruit stores and supermarket chains had provided alternative marketing opportunities for growers outside of the traditional wholesale markets – with potential benefits to both growers and retailers.

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If we will be able to procure good quality mangoes we can (Store Manager, superior fruit outlet)… increase our sales three times. (Mustafa & Mehdi 2007 p. 4)

Even exporters indicated that the performance of the chain could be improved by better communication and reward for efforts to improve product quality.

…there should be transparent communication among the all the ASLP Project Team members.. (for the)… traceability of product from farm to market. (Exporter 1)

I am not getting the right price from the export market in response of the effort I made therefore some models of supply chain should be built…which must have same understanding from growers to end consumers. (Exporter 1)

We have very good relations in export market like in Dubai and Europe (UK) based on our family businesses…(but) Pakistani friends (importer) did not give good price.

(Exporter 2)

4.3.2 The existing level of KASA

This analysis of traditional supply chain management practices confirms the findings of the Scoping Study that the supply chains servicing both domestic and export markets are managed sub-optimally in terms of being focused on creating consumer value. This indicated that the participants in these supply chains were unaware of the benefits that could be gained from improving the management of the supply chains in terms of access to market segments that promised higher returns from better quality fruit or higher net returns as a result of a reduction in the current level of wastage. An alternative explanation for the reluctance to change current supply chain management was that the powerful members of the existing chains – the commission agents and exporters, could see no benefits to them from any change to the traditional system.

Growers in the core respondent group were motivated to change this traditional system as they recognised the opportunities that were emerging from the expansion of superior fruit stores and supermarkets in the domestic market and new export opportunities outside existing market segments.

Therefore they had a positive attitude towards change that was driven by strong aspirations to improve their financial position. The knowledge and skills to establish new supply chain linkages to realise these opportunities were lacking.

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While the commission agents and exporters in the core respondent group indicated an interest in change this interest was not as strong as that shown by growers. This could indicate a lack of initial commitment to change because of the uncertainty of any benefits that might be delivered to them.