There are six principles underlying the SCM method, namely, (1) knowing customers and consumers, (2) creating and sharing value, (3) getting the product right, (4) logistics and distribution, (5) information and communication, and (6) effective relationships. Assessing the whole SCM is based on these principles. From that point one can identify areas for improvement of the whole system.

In developed countries, SCM has been applied in the business environment. It is a guarantee that the supply chain can deliver top-quality products. The approach has been practiced more in developed countries than in developing economies. In developing countries, the supply chain of agricultural products typically involves many players or agents with many farmers at one end and consumers at the other. Generally these traditional supply chains are tightly linked with social structures. Therefore SCM means very little to most of the growers or farmers in developing countries. They are concerned only with producing their crops without having sufficient knowledge of what consumers really want. Usually, farmers in developing countries are not concerned to meet consumers' needs. They often are price-takers. Their contact with “markets” is often limited to dealing with a produce collector or to sales at the local/village market and district market. Johnson (2003) stressed in his case with cocoa and banana farmers in Indonesia and Papua New Guinea that, given that farmers' contact with “market” is so restricted, it is not surprising that farmers have little awareness of the suitability of their product, or indeed if they are producing the right crops.

Consumers' wants and preferences are not transmitted directly to the farmers who produce or plant the crops, so sometimes there are “missing links” connecting consumers at one end, and producers/farmers at the other. As communities continue to develop, greater focus on “linking farmers with markets” may be the key to sustainable income generation. This income, in most cases of agricultural farmers, can be increased and sustained to reduce poverty. In many cases, there should have been a shift from just supplying products to consumer-driven production. Be it production of cash crops or food crops.

Meeting consumers' needs involves integrated management of the transactions and relationships between farmers, traders, and firms as well as processes within them. Managing these relationships provides an opportunity for negotiating the shares between chain members of the value produced and added within the chain. Asian experience of using SCM to analyze fresh produce indicated that the most significant constraint was getting the product right. Getting the product right means right in terms of what customers want. In Papua New Guinea, the constraint is an inadequate marketing system. In both cases, the sale of the product is a very important source of cash income for the largely rural population.

Written by Dr. Erna M. Lokollo, Programme Leader Research and Development, UNESCAP-CAPSA, Bogor, Indonesia.
(References available upon request)