Climate change is significantly impacting the entire value chain of the agrifood sector and is predicted to continue to influence the quality, quantity and availability of food produced around the world.
The impact is likely to be felt across a range of activities along the supply chain, including the availability and security of raw materials, the length of growing seasons, harvest patterns, and the costs of transportation and manufacturing.
Given such impacts, it is important for businesses to better understand the extent of their supply chain risk. The Adaptive Value Chains project, and Climate Chains tool are aimed at developing this understanding.
A value chain, put simply, is defined as the path by which a product or service is created and marketed.
In the case of agri-food products, this path might include input suppliers, growers, transport and storage, processors, wholesalers, retailers and consumers, as well as governance and support institutions. This ‘path’ however, involves multiple flows of value adding activities.
The figure below illustrates how different activities, such as production processes, logistics, information management, relationship management and returns on value can be manifested in a value chain. Value creation is therefore not a simple step-by-step process where participants contribute equal value. Value contribution is also a function of how relationships are managed, how information is shared and used, and how efficiently processes are handled.
Value chains are complex systems that span multiple activities, where operational efficiency, relationship management (the bubbles) and information management (top arrows) play a crucial role in value creation.
Adaptation in relation to value chains refers to modifications that are undertaken at both the individual, organisational and chain-wide levels in anticipation of, and in response to, various types of environmental change.
The purpose of these adaptations is to ensure the continued sustainability of the value chain. However, actions by individuals have the potential to influence the value chain’s overall sustainability. Therefore, it is important to undertake a holistic approach in addressing any potential impacts.