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USAID Lessons Learned in ICT for Distribution and Supply Chain Management in sub-Saharan African Agriculture

By Wayan Vota on March 23, 2011

Using ICT to manage distribution and supply chains can increase efficiency and predictability and reduce waste in value chains and have positive impacts on all market actors. ICT applications presented in this paper are divided into the following categories: 1) applications that assist in the management of supplier networks, 2) applications that facilitate traceability, and 3) applications that assist input supply companies to manage their distribution networks.

TYPES OF ICT APPLICATIONS

Management of Supplier Networks: Large buyers often use ICT applications to manage their producer supply networks. Applications address record keeping, monitoring field agent activities, procurement operations, credit and payment tasks, input distribution, measuring productivity, and forecasting.

Buyers use a range of management information systems (MIS), from basic spreadsheets to complex software used to track resources and facilitate the flow of information. Increasingly, they are using mobile phone based systems for the “channel” to reach the suppliers or their own field agents.

Traceability: Traceability refers to the recording of movements of products along the food chain from production to consumption (i.e., tracing products back to their source). For example, “relationship coffee” links coffee from its origin within a specific coffee cooperative and geographic location, increasing its retail price.

Across the globe, export standards are becoming more stringent. There is growing demand among consumers to know where their food comes from. As a result, ICT solutions that allow companies to track goods from individual farms to retail shelf are increasingly available, using, among other technologies, tracking via cell phone systems, and bar codes.

Management of Distribution Networks: Input supply companies selling seed, fertilizer, and animal feed frequently use ICT to help manage their inventory and rural distribution networks. These applications include systems that process seed orders and invoice products electronically, control inventory and costs, communicate with clients, and identify new markets. Applications vary and range from simple spreadsheets to more sophisticated tailormade applications.

LESSONS LEARNED

  1. Before promoting an ICT solution, companies and development organizations must be sure of demand for the solution from existing market actors and engage those market actors in developing the solutions from the start. As noted in the prerequisites, companies must also have commercial incentives to invest in the solution. Dunavant, for example, perceived potential cost savings and efficiencies from the solutions that MTZL created and even purchased an equity stake in the ICT company once they realized how valuable the system was to them.
  2. Companies should conduct an assessment of external forces and risks that could potentially affect the viability of the solution. For example, if a company’s uptake of a particular technology is premised on a strong market demand for their products, then an assessment of the market for those products should take place.
  3. All users of a given technology should be given appropriate training and capacity building to avoid delays in implementation. When a new database software system is first introduced, for example, all users must be properly trained in how to effectively enter data, track production, and run reports.
  4. An ICT solution has costs for operations, maintenance, and occasional upgrades. All costs need to be considered up front when gauging how much the system is worth to those benefiting—and how much they will pay for it. All too often such solutions begin during a donor project only to end at project close because no one anticipated how these operating expenses would be paid. Companies and development organizations also need to be aware of the enabling environment for certain technologies. For example, government regulation of RFID technology may limit its use.
  5. Using such systems in developing countries may require adaptations due to the cost or lack of availability of telecommunications services. For example, pineapple growers in Ghana can comply with traceability requirements by recording pineapples from origin to pallets in a packing shed in the field and simply transport that information to the port via a ‘data stick’ carried by the truck driver rather than transmitting it electronically. At the port, the data can easily be transferred into the international traceability system for the pineapples, tracking them onward from the port to their destinations in Europe.
  6. This set of applications are often financed and operated by large buyers, processors or exporters given how valuable they can be for them. USAID projects need to be especially cautious if heavy subsidies are requested by such large companies—it is likely to be a sign that the system has been designed in a way to outweigh its core value to these large companies

ICT Applications for Distribution and Supply Chain Management in sub-Saharan African Agriculture is one of a series of briefing papers produced by the FACET project to help USAID missions and their implementing partners in subSaharan Africa use information and communications technology (ICT) more successfully — via sustainable and scalable approaches — to improve the impact of their agriculture related development projects including Feed the Future projects.

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Written by
Wayan Vota co-founded ICTworks and is the Digital Health Director at IntraHealth International. He also co-founded Technology Salon, MERL Tech, ICTforAg, ICT4Djobs, ICT4Drinks, JadedAid, Kurante, OLPC News and a few other things. Opinions expressed here are his own and do not reflect the position of IntraHealth International or other ICTWorks sponsors.
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