Sri Sharada Institute Of Indian Management -Research

Approved by AICTE
Plot No. 7, Phase-II, Institutional Area, Behind the Grand Hotel, VasantKunj,
New Delhi 110070 Website: www.srisiim.org

Project Report
On
Value Chan Analysis
PGDM : 2013 - 2015

Submitted to:-

Submitted By:-

PROF.SN Nandi

BIPIN KUMARYADAV (20130111)

BISHWAJEET KISHOR (20130112)
MANASH KAKATI (20130124)

Declaration
We hereby declare that the following

project report of

VALUE CHAN ANALYSIS is an authentic work done by us.

This is to declare that all work indulged in the completion of this
work such as research, analysis of activities of an organization
is a profound and honest work of ours.

PLACE:NEW DELHI

BIPIN KUMAR YADAV

BISHWAJEET KISHOR
MANASH KAKATI
PGDM +MBA (2013-2015)

ACKNOWLEDGEMENT
We would like to express my hearty gratitude to my faculty
guide, Prof. SN Nandi for giving us the opportunity to prepare a
project report on Value Chan Analysis and for his valuable
guidance which helped us in completing this project.

BIPIN KUMAR YADAV

BISHWAJEET KISHOR
MANASH PRATIM KAKATI
PGDM : (2013-2015)

INTRODUCTION
Value Chain Analysis
Achieving Excellence in the Things That Really Matter
Value Chain Analysis is a useful tool for working out how you can create the
greatest possible value for your customers. In business, we're paid to take raw
inputs, and to "add value" to them by turning them into something of worth to
other people. This is easy to see in manufacturing, where the manufacturer
"adds value" by taking a raw material of little use to the end-user (for
example, wood pulp) and converting it into something that people are
prepared to pay money for (e.g. paper). But this idea is just as important in
service industries, where people use inputs of time, knowledge, equipment
and systems to create services of real value to the person being served the
customer. And remember that your customers aren't necessarily outside your
organization: they can be your bosses, your co-workers, or the people who
depend on you for what you do.
Now, this is really important: In most cases, the more value you create, the
more people will be prepared to pay a good price for your product or service,
and the more they will they keep on buying from you. On a personal level, if
you add a lot of value to your team, you will excel in what you do. You
should then expect to be rewarded in line with your contribution. So how do
you find out where you, your team or your company can create value?
This is where the "Value Chain Analysis" tool is useful. Value Chain Analysis
helps you identify the ways in which you create value for your customers,
and then helps you think through how you can maximize this value: whether
through superb products, great services, or jobs well done.
Note:
This article looks at a simple approach to using value chains. A more
structured approach was developed by

How to Use the Tool:

Value Chain Analysis is a three-step process:
1. Activity Analysis: First, you identify the activities you undertake to deliver
your product or service;
2. Value Analysis: Second, for each activity, you think through what you
would do to add the greatest value for your customer; and

3. Evaluation and Planning: Thirdly, you evaluate whether it is

worth making changes, and then plan for action.
We follow these through one-by-one:

Step 1 Activity Analysis

The first step to take is to brainstorm the activities that you, your team or
your company undertakes that in some way contribute towards your
customer's experience. At an organizational level, this will include the stepby-step business processes that you use to serve the customer. These will
include marketing of your products or services; sales and order-taking;
operational processes; delivery; support; and so on (this may also involve
many other steps or processes specific to your industry).At a personal or team
level, it will involve the step-by-step flow of work that you carry out. But this
will also involve other things as well.

For example:
How you recruit people with the skills to give the best
service.
How you motivate yourself or your team to perform well.
How you keep up-to-date with the most efficient and
effective techniques.
How you select and develop the technologies that give
you the edge.
How you get feedback from your customer on how
you're doing, and how you can improve further.

Tip: If you carry out the brainstorming behind the Activity Analysis and
Value Analysis with your team, you'll almost certainly get a richer answer
than if you do it on your own. You may also find that your team is more
likely to "buy into" any conclusions you draw from the exercise. After all, the
conclusions will be as much theirs as yours.
Once you've brainstormed the activities which add value for your company,
list them. A useful way of doing this is to lay them out as a simplified flow
chart running down the page this gives a good visual representation of your
"value chain".

Step 2 Value Analysis

Now, for each activity you've identified, list the "Value Factors" the things
that your customers' value in the way that each activity is conducted. For
example, if you're thinking about a telephone order-taking process, your
customer will value a quick answer to his or her call; a polite manner;
efficient taking of order details; fast and knowledgeable answering of
questions; and an efficient and quick resolution to any problems that arise.
If you're thinking about delivery of a professional service, your customer will
most likely value an accurate and correct solution; a solution based on
completely up-to-date information; a solution that is clearly expressed and
easily actionable; and so on.
Next to each activity you've identified, write down these Value Factors. And
next to these, write down what needs to be done or changed to provide great
value for each Value Factor.
Step 3 Evaluate Changes and Plan for Action
By the time you've completed your Value Analysis, you'll probably be fired
up for action: you'll have generated plenty of ideas for increasing the value
you deliver to customers. And if you could deliver all of these, your service
could be fabulous!
Now be a bit careful at this stage: you could easily fritter your energy away
on a hundred different jobs, and never really complete any of them. So first,
pick out the quick, easy, cheap wins go for some of these, as this will
improve your team's spirits no plan to tackle them in an achievable, step-bystep way that delivers steady improvement at the same time that it keeps your
team's enthusiasm going.
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Tip: If you have a strong enough relationship with one or more of your
customers, it may be worth presenting your conclusions to them and getting
their feedback this is a good way of either confirming that you're right or of
getting a better understanding of what they really want.
Example:
Lakshmi is a software development manager for a software house. She and
her team handle short software enhancements for many clients. As part of a
team development day, she and her team use Value Chain Analysis to think
about how they can deliver excellent service to their clients.
During the Activity Analysis part of the session, they identify the following
activities that create value for clients:
Order taking
Enhancement specification
Scheduling
Software development
Programmer testing
Secondary testing
Delivery
Support
Lakshmi also identifies the following non-client-facing activities as being
important:
Recruitment: Choosing people who will work well with
the team.
Training: Helping new team members become effective
as quickly as possible, and helping team members learn
about new software, techniques and technologies as
they are developed.

a. Identify the Value-Chain Activities. The firm identifies the specific

value activities that the firm in the industry must perform in the process of
designing, manufacturing, and providing customer service. Some firms are
involved in a single activity or a subset of the total activities. The activities
should be determined at a relatively detailed level of operations, that is, at the
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level of business unit or process just large enough to be managed as a

separate business activity.

b. Identify the Cost Driver(s) at Each Value Activity. A cost driver

is any factor that changes the level of total cost. The objective of this step is
to identify activities for which the firm has a current or potential cost
advantage.

c. Develop a Competitive Advantage by Reducing Cost or

Adding Value. In this step, the firm determines the nature of its current and
potential competitive advantages by studying the value activities and cost
drivers identifies earlier. In doing so, the firm must consider the

following:
Identify competitive advantage (cost leadership or differentiation). The
analysis of value activities can help better understand the firms strategic
competitive advantage and its proper positioning in the overall industry value
chain.
Identify opportunities for added value. The analysis of value activities can
help identify activities in which the firm can add significant value for the
customer.
Identify opportunities for reduced cost. A study of its value activities and cost
drivers can help a firm determine those parts of the value chain for which it is
not competitive.
Exploit linkages among activities in the value chain. The decision to provide
an activity internally or to outsource it is sometimes influenced by the way
that activity is affected by another activity in the chain. Value-chain analysis
supports the firms strategic competitive advantage by facilitating the
discovery of opportunities for adding value for the customer and/or by
reducing the cost to provide the product or service.

Value Chan Analysis of Food And Agriculture of Excellen

Request for Proposal
TRANSFORMING EASTERN INDIAS ECONOMIES THROUGH
INNOVATIVE RURAL BUSINESS HUBS
1. CII Statement of Business
The Confederation of Indian Industry (CII) works to create and sustain an
environment conducive to the growth of industry in India, partnering industry
and government alike through advisory and consultative processes.
CII is a non-government, not-for-profit, industry led and industry managed
organisation, playing a proactive role in India's development process.
Founded over 117 years ago, it is India's premier business association, with a
direct membership of over 7100 organisations from the private as well as
public sectors, including SMEs and MNCs, and an indirect membership of
over 90,000 companies from around 250 national and regional sectoral
associations.
With 63 offices including 10 Centres of Excellence in India, and 7 overseas
offices in Australia, China, France, Singapore, South Africa, UK, and USA,
as well as institutional partnerships with 223 counterpart organisations in 90
countries, CII serves as a reference point for Indian industry and the
international business community.
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2. Project Background
A. Project Background:
Project Name: Transforming Eastern Indias Economies through Innovative
Rural Business Hubs
Timeline: November 1, 2012 to October 31, 2014
Development Partners: CII FACE and USAID
Objectives:
I. Improving market efficiency by generating procurement linkages within
value chains.
II. Increase agriculture productivity by the increased use of agri-innovation
including technology and processes and service for improved management.
III. Human capacity to strengthen responses to market opportunities to
improve market Competitiveness
IV. Integration of stakeholders across the value chain will improve
productivity and market development (though Innovative business models
and balanced market systems).
Background: The Confederation of Indian Industries - Food and Agriculture
Center of Excellence (CII-FACE) has collaborated with the United States
Agency for International Development (USAID) for a period of two years to
improve agricultural productivity and output in eastern India, through the
establishment of Rural Business Hubs (RBH).
The RBH envisioned in this activity, will function as a one-stop aggregation
point for the integration of all elements across a value chain. The RBH
innovation concept implicitly recognizes that converged amalgamation of
linked activities require coordination to ultimately achieve sustainable
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impact. RBHs may manifest as physical, brick and mortar establishments in

their deployment or virtual aggregation points, using Information
Communication Technologies (ICT). While RBH models exist in various
forms, common missing elements in all of them are value chain gaps like
procurement linkages. Although RBH models increase market access to
quality-assured agri-inputs and contribute to market transparency, they fall
short of profitability and therefore are unsustainable unless new, innovative
business models are developed to better harness fragmented resources and
address supply and demand issues across key value chains.
CII FACE will strengthen the private sector role in catalyzing agriculture
productivity while integrating broader participation in select agriculture value
chains in order to increase farm incomes through inclusive economic growth.
Under this activity CII FACE will help improve productivity of small and medium
landholders and increase income levels through inclusive growth by taking
successful market-driven RBH models and innovations to scale. CII FACE will
build upon the RBH investments established through the Consultative Group for
International Agriculture Research (CGIAR) Collaborative Research Support
Programs, foundations and donor groups to harness opportunities for growth such
as in livestock, aquaculture, horticulture and tree crops and other income support
activities. These will be integrated with agricultural best practices in terms of
cultivation technologies, relevant and correct input supplies, critical mass
generated in terms of numbers of participant farmers and aggregated land holdings,
optimal utilization of agricultural infrastructures including financial support and
market linkage with procurement organizations
To accomplish this, CII FACE RBH will support the strengthening of value chain
backward linkages to farmers in order to improve farmer capacity and productivity.
CII FACE RBH will also support the strengthening of forward linkages to markets
in order to improve post- harvest management including food processing,
wholesale and retail marketing and distribution systems. The key to this approach
is the identification of buyers to procure products identified, and specifically
address top of the supply chain requirements. This will require the identification of
location-specific priority interventions, where each hub will serve as the convening
platform that brings together a mix of resources to address forward and backward
linkages. The mix of resources will be determined by the relative advantages and
expertise from both the private and public sectors to ensure the integration of the

key components required for creating an economical and sustainable value

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chain. This will include supply of agricultural inputs like seed, fertilizer, pest
management and mechanization, mechanization services, extension services,
finance and marketing services, agro-processing, and marketing and
procurement systems
CII FACE RBH will develop business models to address gaps in the
agriculture value chain within the context of immature, developing and
mature markets.

3. Overall Context and Purpose of RFP

Overall Objective: Strengthening value chain for selected commodity in
the West Bengal, Orissa and Bihar.
CII intends to partner with private, public players, financial institutions and
NGOs under five main broad activities as listed below to strengthen value
chain, human capacities, establish procurement linkages, improve
productivity and promote innovations and use of technology.
1. Access to Markets:
Procurement Linkages: Establish procurement linkages to calibrate
production in line with demand and provide an opportunity for
economic benefits for the local economy. For example organisations
that could provide support in post harvest systems with wholesale,
retail procurement and distribution systems
Input Supply: Input support from private sector will be in form of
seeds, farm equipment, fertilizers, agrochemicals, mechanisation,
pesticides, irrigation, waste management and others. The participating
organisations are expected to help set up demo farms, outreach
extension and training for farmers.
2. Value chain assessment: Provide support in undertaking value chain
assessments.
3. Technology Service: Facilitate introduction and adoption of
innovations and technologies that help improve productivity and
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farmers incomes. For example, use of technology for price discovery,

weather information and other similar such services. These services
could include setting up of ICT solutions, monitoring creation of demo
farms, on farm productivity across the value chain, productivity
trainings and trainings to hub centres.
4. Extension and Capacity Building: Rural Business hubs will deploy
innovation and innovative sustainable business models to decrease
opportunity cost that will result in increased productivity as a result of
better agriculture resource and management practices. For example
organisation who could provide FPO mobilization and need
identification, training on productivity improvement, harvesting
methods, post harvest and waste reduction, weather and crop protection
etc.
5. Access to Finance: Provide access to finance to farmers for purchase
of inputs and other related services.
For example, financial
organisation who could conduct financial literacy training, provide
innovative credit instruments to farmers, includes purchase inputs,
weather insurance , working capital requirement etc.
Interested organizations may submit proposals to contribute to ACTIVITY # 2 i.e.
Baseline Study and Supply Chain Assessment
NOTE: THIS RFP IS TO INVITE PROPOSALS FROM ORGANISATIONs
WHO WOULD LIKE TO BE A PART OF A CONSORTIUM TO
CONTRIBUTE TO ACTIVITY NUMBER TWO i.e. VALUE CHAIN
ASSESSMENT.
ORGANISATIONS HAVING EXPERIENCE IN
CONDUCTING VALUE CHAIN STUDIES ARE INVITED TO SUBMIT
THEIR PROPOSALS

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4. Scope of Work and Deliverables BASELINE STUDY AND SUPPLY

CHAIN ASSESSMENT
A. Scope of Work:
Activity: Value Chain Analysis
Objective: Conduct value chain analysis for Banana and Vegetables value
chain in West Bengal, and Bihar respectively.
Timeline: Within two months from the time of agreement.
Area: North Eastern Region - West Bengal, and Bihar
Profile of Organizations: Research organization, educational institutions

Commodity: Being identified in each state through parallel process

Value Chain activities: The Value Chain analysis looks at the whole process
of effective utilization of resources to create a competitive advantage that
would provide a lower cost and better improved profit margin. Value addition
tends to create the following:
Identifying the specific commodities for value chain
Economies of scale
Capacity utilization
Linkages among activities including vertical integration
Learning process
Interrelationships among business units
Marketing outlets
Value chains encompass the full range of activities and services required to
bring a product or service from its conception to sale in its final markets
whether local, national, regional or global. Value chains include input
suppliers, producers, processors and buyers actively supported by a range of
technical, business and financial service providers.

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The main purpose of this intervention is to carry out an analysis and

assessment of potential value chains and linkages in the agricultural and agrobased sector. This would create a platform for development of a blue-print for
strengthening of value chain from farm to fork activities.
Expected Role: The organization is expected to help us address the
following questions and provide information against required parameters
under baseline section below to meet project results
1. Mapping the value chain

Mapping the value chain of existing private sector

Map backward linkages that are economically viable
Map Farmer organisation lead farmers, self-help groups,
federations and societies
Map potential forward linkages to markets including post-harvest
production and processing services
Chain stakeholders: visualize the relations between actors and
stakeholders:
i. Actors and their functions
ii. Supporters and their functions
iii. Influencers and their functions
iv. Disaggregated data of beneficiaries by male/female, small
holder farmer vs. wealthier medium sized farm holders
2. Bottlenecks along the value chain
Covering at least:
What are the market opportunities? For which products and from
which markets is there a demand?
What are the key bottlenecks preventing strengthening of value
chain?
Are these bottlenecks critical? Can these bottelnecks be
addressed in a reasonable timeframe?
What bottlenecks can be solved by CII FACE? What are the
resource requirements to address these bottlenecks?
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 Summary: What are the main constraints (cluster constraints to

max 8 key issues)?
3. Baseline information
The key results that project is committed to deliver are:
Increased net incomes (on and off farm) for households engaged
in the target value added market chains
Increased productivity and decreased opportunity cost for
improved productivity as a result of better agriculture resource
and management practices
Decreased post harvest losses for targeted value chain
Increased application of post harvest market information.
Access to financial and risk management products by household
in target population
Baseline study will collect information on following suggested
parameters but not limited to only these one. The questionnaire can be
finalized after the finalization of agreement with the agency
(Estimated) number of farmers active in the chain/product groups
Estimated income levels
(Estimated) value addition activities at each step of the value
chain
Current productivity volumes and amounts for the selected value
chain
Post Harvest loses
Trends in supply and demand
Data on exiting vs. required financial assistance and actors
4. Deliverables:
What steps are needed to ensure that the value chain performs well?
Proposed CII activities to support value chain for selected
commodity.
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 How much increase in income is expected to result from the CII

FACE intervention (target and attribution estimation)?
How much increase in productivity is expected to result from the
CII FACE intervention
How much decrease in post harvest loses is expected to result
from CII FACE interventions
What are the kind of financial instruments and risk management
strategies are required to ensure strengthening of value chain
What are opportunities for synergies due to integrated
approach/alliances with other organisations actively supporting
that value chain?
Risk analysis
Baseline study results with suggested indicators for measuring
the outcome after two years of the project

Responsibilities of the Bidder

The chosen contractor will be responsible for organizing and managing the
logistics of conducting the fieldwork, including the provisioning of a team of
interviewers capable of administering the questionnaires in local language;
the provision of transport and lodging of the teams of interviewers during the
field work; processing, conducting basic analysis and presenting in a
packaged report to CII FACE for further analysis and reporting. The
interviewers and their supervisors should be able to communicate fluently in
(local language). All interviewers need to be able to read and write in local
language as well.
The bidder need to specify survey methods along with details of the sample
for each survey instrument which they usually consider appropriate.
Responsibilities of CII FACE:
1. CII FACE will provide overall management, technical inputs as and when
required, particularly in the areas of finalizing the study instrument, and
guiding the analysis and baseline study at several points.
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2. Provide a list of and a map of project sites in three regions

3. Provide introduction of field investigators to the sites, and on-site support
to them through CII FACE field offices.
V. Costs

Provide itemized costs for the total scope of this project, based on the scope
of work and deliverables outlined in Section IV.
The final scope of work may be subject to negotiation; however, bidder
selection will be made against the original scope of work. Bids should follow
the following budget format: (change, add, or delete items in the list as
required.)
A line item budget, in Indian rupees, is to be presented with Unit Rates,
Person Days and Timelines as per the sample budget format attached,
showing anticipated costs of the proposed research activities. All projected
costs must be in accordance with the organizations standard practices and
policies.
Table 1: Sample Form for Budget Details by Line Item
Sr. No
1.

Particulars
Personnel Costs
Cost/activity/ for person
(specify daily rate X # days)

Others (specify)
Sub-total
2.

Travel and Transportation

Mode/# and cost per trip
Local expenses
Others (specify)
Sub-total
Training of Field Teams for Data Collection
# Interviewers X rate per day during training
Venue hiring/food and drink costs
Vehicle hire
Per diems
Others (specify)
Sub-total
Data Collection and De-briefing in the
Field

3.

4.

18

Unit

# of Units

Rate

Amount

Sub-total
Any other

6.

Sub-total
Tax
GRAND TOTAL
Offers may include additional line items as and where necessary, and with appropriate justification in
the Budget Notes.

VI. Overall Qualifications

Provide information on your overall qualifications, including
Profile of relevant corporate qualifications.
Professional expertise with qualitative and quantitative aspects of
value chain and baseline analysis.
Qualifications of key members of the proposed project team (attach
CVs and provide details of back-up/standby teams).
Number of years in business.
If your company has more than one location, please indicate these
qualifications for the site that is responding.
VII. Proposal Evaluation Criteria
The following is a list of significant criteria against which proposals will be
assessed. The criteria are listed in order of priority, however they are not
weighted.
CII FACE anticipates issuing a firm fixed-price sub-agreement to the offeror
whose proposal is most advantageous and cost-effective. A fixed-price
contract calls for one price, not subject to any adjustment based on the
offerors cost experience in performance of the contract. This fixed-price is
established at the outset, when the contract is negotiated and signed.
19

Proposals will first be evaluated from a technical standpoint. Those

proposals that are considered to be technically acceptable shall then be
evaluated in terms of cost. Each technical proposal will be evaluated based on
evidence of the following items:
CRITERIA
TECHNICAL CRITERIA (35 points)
Proposals reflects understanding of project and the scope of work in the RFP
Proposal illustrates knowledge of value chain analysis and baseline survey methods
along with details of the sample for each survey instrument which is usually considered
appropriate
Clearly demonstrates knowledge and understanding of the value chain analysis and
baseline questions and objectives across the value chain and can justify the selected
methodology for meeting the stated objective(s) as outlined in the SOW
Experience conducting value chain analysis and baseline studies quantitative and
qualitative analysis
Sub Total
QUALIFICATIONS and EXPERIENCE (30 points)
Qualifications and Experience of the project team
Experience of the organization in similar work
Experience of working in East India and working experience with other value chain
players
Sub Total
WORK PLAN (20 points)
Clear outline of steps and activities to achieve deliverables
Having required personnel on the team
Capacity to perform the work within the desired timeline
Sub Total
COST (15 points)
Appropriateness of the budget to the plan suggested vis--vis institution/staff experience
and qualification
Sub Total
GRAND TOTAL
Note: CII reserves the right to include additional criteria.

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Scores
8
8

9
10
35
10
10
10
30
7
6
7
20

15
15
100

VIII. Instructions for Responding

A. CII contacts:
Procurement Contact: Tarun Tandon (tarun.tandon@cii.in)
Technical/Program Contact: Meetu Kapur (meetu.kapur@cii.in)
D. Proposals due: May 17, 2013
Completed proposals in the format below should be submitted by email to the
contacts listed above. The subject line of the email should read:
Transforming Eastern Indias Economies Through Innovative Rural
Business Hubs

Organization Description
Period of Performance
Methodology of contribution to the objectives as outlines in section IV
Work plan and deliverables
Manpower required to conduct the value chain analysis and baseline
study
Budget including contributions (in cash or kind)
E. Selection of short-list
CII reserves the right to select a short list from the bids received. CII has the
option to interview and discuss specific details with those agencies who are
on the short-list.
F. Conclusion of process
Applicants will be notified of CIIs decision in May 2013. Final award is
subject to the terms and conditions included in this solicitation, as well as
successful final negotiations of all applicable terms and conditions affecting
this work.

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IX. Terms and Conditions of the Solicitation

A. Notice of non-binding solicitation
CII reserves the right to reject any and all bids received in response to this
solicitation, and is in no way bound to accept any proposal. All the work
produced under this RFP will be sole property of CII FACE.
B. Data

All the raw and final data collected by the organization will be handed over to
CII FACE in soft and hard copies.
C. Confidentiality
All information provided by CII as part of this solicitation must be treated as
confidential.
Proposals, discussions, and all information received in response to this
solicitation will be held as strictly confidential, except as otherwise noted.
D. Communication
All communications regarding this solicitation shall be directed to
appropriate parties at CII indicated in Section VIII. A. Contacting third
parties involved in the project, the review panel, or any other party may be
considered a conflict of interest, and could result in disqualification of the
proposal.

E. Acceptance
Acceptance of a proposal does not imply acceptance of its terms and
conditions. CII reserves the option to negotiate on the final terms and
conditions. We additionally reserve the right to negotiate the substance of the
finalists proposals, as well as the option of accepting partial components of a
proposal if appropriate.
F. Right to final negotiations
CII reserves the option to negotiate on the final costs and final scope of work.
G. Third-party limitations
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CII does not represent, warrant, or act as an agent for any third party as a
result of this solicitation. This solicitation does not authorize any third party
to bind or commit CII in any way without our express written consent.

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