The operation and effectiveness of formal and informal supply chains for fresh produce in the Papua New Guinea highlands
The research aim was to gain a more detailed understanding of the operation of different key segments for fresh produce supply chains originating in the Highlands Provinces in Papua New Guinea (PNG). The research investigates a number of supply chain dimensions of effectiveness which include, value creation and integration of processes, logistics, quality, information, relationship/vertical integration and overall effectiveness. These were linked together in SC framework. Two potato chains were investigated, one formal, the other informal. The informal potato chain involves small holder farmers, input suppliers and local markets including kai bars and the urban market. The chain originates and ends within the Western Highlands Province. The formal potato chain has farmers, input suppliers, wholesaler/marker, transport companies (trucking and coastal shipping agents), supermarkets, hotels and kai bars. This chain originates in Mt Hagen, Western Highlands Province and ends in Port Moresby, National Capital District. The effectiveness of both the formal and informal chains was identified, and comparisons were made to see how each chain differed. The informal chain was found to have different problems to the formal chains. However, participants to both chains demonstrate a high entrepreneurial behavior. A key finding of the study was that the chains spread their risk by operating in multiple market segments and this can help to solve issues with variable quality. The marketers in each chain position themselves in these different market segments. It was clear from this work that focusing on functions and not the whole chain can lead to a distorted view of chain performance. For example, for the informal chain, a focus on logistics issues, particularly poor roads and problems with availability of seeds, can misrepresent the effectiveness of this chain. Therefore, it was concluded that it is important to look at the overall performance of each chain rather than looking specifically at particular chain functions in isolation.... [Show full abstract]
Keywordssmallholder farmers; development; supply chain management; Papua New Guinea supply chains; formal chains; informal chains; case study
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