Sample Projects: Latin America / Caribbean

Global Value Chain (GVC) Analysis for Cuenca, Ecuador

This was the pilot study, sponsored by Corporacion Andina de Fomento (CAF), for a series of regionally focused programs designed to boost competitiveness of selected cities in Latin America.  This pilot project focused on a broad intervention in the city of Cuenca, Ecuador where, based primarily on a value chain analysis, CAF plans to prepare a comprehensive agenda around Cuenca’s two key productive sectors – wood furniture and household appliances (white goods).  By identifying and acting to mitigate constraints and bottlenecks along the respective value chains and bolstering the local supply chains for each sector, competitiveness of the two sectors will be improved in addition to strengthening the manufacturing base of Cuenca.

With focus on developing the local manufacturing base - hence increasing local content, particularly for the white goods sector - GDS conducted a detailed Integrated Value Chain Analysis (IVCA) of the wood and white goods sectors in Cuenca, Ecuador.  For each sector, analysis included identification of all suppliers/ stakeholders along each value chain and evaluation of suppliers’ capacities.  GDS executed a comprehensive cost analysis for all inputs and all stages of production along with corresponding lead times for inputs and processes.  The impact of timing was quantified, pinpointing specific cost components that could be reduced via local sourcing and through more efficient operations management.  Also included was a comprehensive analysis of institutional support for each sector (NGOs, international development agencies, development banks, government institutions, private sector, etc.) as well as detailed analysis of the regulatory environment covering all issues affecting the sectors, including specifying regulatory aspects hindering productivity and offering suggestions on policy measures required to enhance productivity and efficiency.  The results were benchmarked against global competitors and GDS provided to the client a detailed set of conclusions and corresponding recommendation.  The recommendations enumerated strategies for improvements in production management (particularly inventory control), improved product design and more efficient use of resources.  Recommendations also indicated the means by which local suppliers can be more effectively incorporated into the supply chains resulting in shortened lead times for manufacturers, lower inventory costs, reduced transportation costs and manufacturers’ improved control over inputs.

Value Chain Analysis of the Textiles & Apparel Sector in Alpaca Products and Metal Mechanics Inputs to the Mining Sector for Arequipa

The second in a series of regionally focused programs sponsored by Corporacion Andina de Fomento (CAF) intending to boost competitiveness of selected cities in Latin America, this value chain analysis consisted of two strategic sectors in Arequipa, Peru: alpaca and metal mechanics inputs to the mining sector.  For metal mechanics, GDS executed value chain analysis of various locally produced inputs to the mining sector to determine best options to capitalize on significant investments underway by the multinational mining companies operating in Southern Peru.  The alpaca study was an integrated value chain analysis beginning at the farm and carrying through to textiles and finished goods (garments and accessories).  The analysis covered knitted garments and woven accessories. 

Through the value chain assessments, GDS identified bottlenecks and impediments to each sector.  Analysis included reviews of policy and enabling environment to determine if policy reform is required for the sectors to flourish.  GDS also analyzed institutional support, market transactions and structure, and supply chain structure and management.  For metal mechanics, GDS determined obstacles faced by local firms vying to increase their activities with the mines.  Recommendations included a detailed methodology for a comprehensive local content development program.  For alpaca, through analysis of international distribution and discussions with foreign buyers, GDS identified areas of improvement needed to increase international linkages and product marketability.