Fundamental tools to achieve
sustainability in product chains

For the management of agricultural product chains there are several assessments available which can be used as direction tools like for industrial products to describe its impact on components of the product chain. The product quality assesses whether a product is ‘fit for purpose’. This means the product must meet or exceed the customer requirements. It is important to remember that it is the customer who sets the “quality standards” in terms of their overall expectations of quality.

There are several ways that a customer may define quality of agricultural products: freshness, appearance, safety, functionality, nutritional value or others. It should be noted that a good quality product does not necessarily have to be an expensive product; it merely has to fulfill its purpose within the eyes of the customer. Nevertheless, the consumer should receive more information about agricultural production to develop better understanding for adequate pricing.

The Socio-Economic Impact Analysis examines how a proposed product will probably be accepted by current and future consumers. Here, the consumers demands are measured: e.g. quantitative aspects because of changes in community demographics, results of retail/service and housing market analyses, changes in demands for public services, changes in employment and income levels and changes in the aesthetic description of product quality by the consumers. This analysis can be of special importance when planning plantations of perennial plants and mixed cropping systems (Feldmann et al., 1995).

Within the product chain Health Risk Assessment and Environmental Risk Assessments are very important. Risk assessment is a step in the risk management process. Risk assessment is measuring two quantities of the risk, the magnitude of the potential demage, and the probability that the demage will occur. These assessments have a look especially on plant protection procedures or waste management. Life Cycle Assessment (LCA) is a quantitative method used to measure the energy and material flows associated with all stages of a product from farm to fork. The application of this LCA to agricultural and food production processes is beginning to increase. LCA recently is a tool used to evaluate mainly the potential environmental impact of a product, process or activity throughout its entire life cycle by quantifying the use of resources ("inputs" such as energy, raw materials, water) and environmental emissions ("outputs" to air, water and soil) associated with the system that is being evaluated.

The Cost/Benefit Analysis process involves monetary calculations of initial and ongoing expenses vs. expected return. In practice, analysts try to estimate costs and benefits either by using survey methods or by drawing inferences from market behaviour. Cost-benefit analysis attempts to put all relevant costs and benefits on a common temporal footing. During cost benefit analysis, monetary values may also be assigned to less tangible effects such as the various risks which could contribute to partial or total project failure; loss of reputation, market penetration, long-term enterprise strategy alignments, etc. Adequate pricing will be of special importance for the sustainability of agricultural product chains in the future.

The Business Ethics Assessment determines and evaluates the fundamental purpose of a company. Along the agricultural product chain a company's main purpose within the discussed product chain should not be to maximize the returns to its shareholders not considering the interests and rights of anyone else (shareholder concept). The evaluation of existing ethical rights and duties between companies and society should clearly demonstrate the Corporate Social Responsibility of a company respecting the demands of other stakeholders along the product chain (“mutual” stakeholder concept). Issues regarding the moral rights and duties between a company and its shareholders becomes clear when the fiduciary responsibility and the stakeholder concept vs. shareholder concept of a company is evaluated.

All these instruments are already available and the most important strategic component would recently be for each stakeholder to demonstrate clearly which information he already transfers at the exchange points of the product chain to the next chain link partner. This finally results in a traceable information supply chain with the consequence of reliability of the whole product chain as a basis for its sustainability.

 

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BAP Concept

 

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