Supply capacity - ITC

The VA2T Programme focuses on improving the ability of SMEs in developing and transition economies, to integrate into local, regional and global value chains and to increase the value added to a good or service. Taking into account the value chain analysis, the programme builds international market strategies and helps SMEs develop and market differentiated value-added offerings. VA2T also seeks to influence relevant stakeholders in creating a supportive environment for enterprises and sectors at each step of the value chain. These include policymakers and regulators, TISIs, and international private sector market partners. Public-private dialogue platforms are fostered to trigger wide-scale transformational change.

At sector level, the programme conducts strategic analyses of change readiness, the value chain, and markets. It facilitates stakeholders to design development strategies; builds platforms, industry and cluster associations; engages stakeholders in alliances for action; and unites buyers, processors, producers and support-service providers.

At the enterprise level, with focus on SMEs with a high growth potential, that export or show export readiness or aspiration, the programme operates as follows:

1. Strategic analysis: Capturing market, sector and enterprise-level information to identify key constraints to trade internationally, and the potential to enhance value addition in selected SMEs in certain sectors and markets. This includes building analytical capacity of SMEs and TISIs in identifying and selecting most appropriate resource requirements – including Access to Finance (A2F), skills, technology and innovation – export opportunities, and target markets;
2. Operations: Providing technical assistance and advisory services for SMEs to overcome identified barriers to internationalization and value-addition. This may include optimizing sourcing, production, logistics, packaging, and quality/technical requirements;
3. Market linkages: Providing proactive assistance to SMEs in elaborating marketing and branding campaigns, identifying and connecting with potential clients, as well as diversifying into new markets and segments.

At both sector and enterprise levels, increasing sustainability is an important driver of long-term value-addition and competitive differentiation. Furthermore, VA2T contributes to inclusive development by mainstreaming gender and youth in the selection of SMEs who will receive assistance.

The effectiveness of the approach is demonstrated with some recent examples from projects. During 2016, ITC worked both to transform trade capacity across sectors and to upgrade individual aspects of value addition. In Bangladesh, Kenya and Uganda, capabilities and exports in sectors ranging from information technology (IT) services to avocados were upgraded, leading to increased exports by an estimated $20 million, as well as 1,254 new full and part-time jobs.  Firms increased exports by an average of 71%, broke into 33 new export markets and struck deals with 165 new clients. In Sri Lanka, ITC concluded a project to improve fruit and vegetable quality that has seen European Union health and safety alerts related to food imports from Sri Lanka decrease by about 40% since 2013. In Nepal, ITC assisted the pashmina sector to develop its first official branding guidelines and register the Chyangra Pashmina trademark.  Better product packaging can be critical to a company’s efforts to move up the value chain. In the United Republic of Tanzania, ITC worked with the country’s Small Industries Development Organization to invest $250,000 in establishing a multi-purpose packaging facility, which will allow local food and beverage sector SMEs to purchase world-class packaging material 35% to 40% more cheaply. In Zambia, ITC brought international designers in to help local small-scale honey producers develop attractive labels, brands and marketing, enabling them to compete with larger firms in local and regional markets. In tandem with these branding improvements, ITC fostered links with international companies that led to quality improvements and new bulk sales worth approximately $500,000 to buyers in Europe. 

International surveys have shown that business executives are most concerned about keeping costs down, ensuring access to information, managing risks, strengthening their customer relationships and sustaining growth. ITC’s supply chain management training and certification addresses these issues and more. Whether trainees are long-time managers or just getting started, the training programme allows each participant to progress according to their own objectives, knowledge and schedule. The Supply Chain Management training and certification programme is ISO9001:2008 certified and this provides confidence and evidence to customers, partners and funders that it is managed in a professional and efficient manner and delivers high-quality supply chain training and advisory programmes.