Supply chain analysis

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Supply chain analysis consists in a quantitative analysis of inputs and outputs between firms, prices and value added along a supply chain through agent accounts. These inputs and outputs can be expressed in physical flows of material and services needed to manufacture a final product as well as in their monetary equivalents). The term Supply Chain analysis is used to refer to the overall group of economic agents (a physical person such as a farmer, a trader or a consumer, as well as legal entities such as a business, an authority or a development organisation) that contribute directly to the determination of a final product. Thus the chain encompasses the complete sequence of operations which, starting from the raw material, or an intermediate product, finishes downstream, after several stages of transformation or increases in value, at one or several final products at the level of the consumer (Food and Agriculture Organization of the United Nations, 2005a).

Building a supply chain analysis requires to spend time in the followings tasks (see example figure 2):

1. Mapping the chain (through a flowchart) to obtain an overview of the chain, the product flows, the position of the chain actors and type of interaction between the actors.

2. Developing the economic accounts corresponding to the activities of the agents involved in the chain. This consists in quantifying the activities observed and their flow of material both in physical and in monetary terms. This allows the analyst to assess the relative importance of the different segments or sub-chains of the chain, which in turn will allow an appropriate use of time and resources. For more details on how building economic accounts, read FAO (2005b and 2005c).