Supply chain development under conflict conditions-Case of Nepal

Raj Kumar Bhattarai

Nepal Commerce Campus

Tribhuvan University

November 11, 2014

A presentation on:

Oxford Retail Networking DayInstitute of Retail Management

Säid Business School

University of Oxford

By:

The basics

• Region: Nepal

• Context: conflict conditions

• Industry: poultry

• Problem: business sustainability

issues and challenges

• Work: case study in Valley Group

The roadmap

• Search of a firm doing business exceptionally well

• Timeline preparation

• Observations, interviews, and discussions

• Analysis and interpretation

• Lessons learned

Nepal

• Landlocked mountainous Himalayan country

• Multi-cultured, multi-lingual and multi-religious

• Poor transport infrastructure

• Power shortage of about 12 hours everyday

• Political conflict and insurgency

The conflict conditions

• Frequent lockouts, general strikes, security lapses,

shortage of materials, parts and supplies

• Absence of law and order

• Jealousy, rivalry, threatening, kidnapping, and

assassinations

• Chaos, uncertainty, and insecurity

The poultry market

• Backyard farming to industrialized farm farming

• Religious and cultural implication of poultry keeping

• Optional poultry farming (only for guaranteed sales/profits)

• Absence of poultry supply chain (irregular/occasional supply)

• Poor regulatory mechanism

The issues

• How to sustain a business under conflict conditions?

• What strategy practices best serve poultry market in

economies like Nepal

Major challenges

• Mobilizing scarce resources

• Ensuring product quality and standards

• Meeting product delivery schedule

• Getting support services

• Ensuring product/service ownership

Valley Group and the poultry supply chain

Poultry care (From overseas)

Feed stock (Valley Feed)

Hatchery (Valley Poultry)

Farmers (Individual/industrial)

Live broilers (Valley Mart)

Poultry products (Individual customer)

Slaughtering Processing Distributing

(Valley Cold Store)

Poultry products

(Industrial customer) Great grandparent Foundation stock

Genetic engineering

Grandparent

Primary breeder

Parent stock

Breeder

Parent stock

(From overseas)

Supply chain network actors and products

Major Items

Major actors in the supply chain of the Valley Group

Breeding

Farm

Valley

PoultryFarmers

Valley

Feed

Valley Mart Valley Cold

Store

Inputs

Primary

breeder

Feed

Medicine

and vaccine

Breeder

chicks

Feed

Medicine

and vaccine

Chicks

Feed

Medicine

and

vaccine

Food

grains

and

remains

Other

items

Live broiler

Feed Live broilers

Outputs

Breeder eggs

Breeder

chicks

Eggs

Chicks

Live

broilers

Food

grains

Remains

Feed for

poultry

and

cattle

Live broilers

Poultry: whole

chicken, parts,

and

processed

items

The business assumptions

• Competitive rivalry in business does not work best (प्रतिष्पर्धाले व्यवसधयलधई उँभो लगधउँदैन)

• Work of a business firm must benefit others first(कम्पनीको कधमले सवाप्रथम अरुको भलो गननापर्ा)

• Only changes are permanent; rest are temporary (परिविान मधतै्र सनतनतष्िि हो, बधँकी सबै अतनतष्िि हुन)

• Supply chain network is an armour of a business firm (आपनतिा संजधल व्यवसधतयक संस्थधको कवि हो)

• Network actors and employees are partners for quality (आपनतिा संजधलकध सदस्य ि कमािधिीहरु गनणस्ििकध सधजेदधि हुन)्

• Breaking own performance record is a real growth(आफूले आफ ैँलाई जित्नु न वास्तजवक उन्नजत हो)

Major lessons from the case study

• The generic strategies (like cost leadership, differentiation) do not

work best under conflict conditions

• Competitive rivalry should be avoided in business

• Business plans are weaker; contingent forces are stronger

• Buyers prefer regularity in supply first

• Transparency and secrecy both are must during conflicts

• Business network of reciprocal interdependence for

regularity and sustainability in business

Questions

Raj Bhattarai

Thanks

Raj Bhattarai