Overview Objectives

This project used the banana industries in Indonesia and Australia in case studies to identify the major constraints to competitive performance in the two countries. Researchers aimed to document the characteristics of the supply chain, identify market requirements and the potential market and analyse product market performance. The study also charted future research and development needs.

Project Background and Objectives

Competitive pressures are rising throughout the food industry, and continued profitability depends on the efficient management of cost of production, reduction of waste, introduction of improved technologies and response to changes in the socioeconomic environment. All participants in the supply chain, from producers/smallholders to product handlers and marketers, must contribute to manage these factors and provide the product that the market demands.
Research and development agencies play a key role in horticulture industry development. When R&D impacts on aspects with most potential to increase industry profitability and to minimise adverse impacts on rural communities, it will lead to maximum benefit to community development and the greatest return for the R&D investment dollar. Discussions with Asian colleagues indicated a similar need to target R&D efforts, with additional consideration for ensuring flow of benefits to smallholders.

Project Outcomes

Information gathered was then collated and presented in a two-day workshop held in Australia, attended by the Indonesian steering committee including market and regional representatives, and the Australian project team. The basis of the workshop format was a set of methods used by the Australian team together with the Supply Chain CD produced by the Department of Agriculture, Forestry and Fisheries (DAFF). The results indicated that the most important constraint in both supply chains was getting the product right, since the supply of quality fruit was a major limitation to expansion. This indicated that the current emphasis of research and development - to improve on-farm production and postharvest practices - was correct. However, additional factors such as getting adequate supply of the right product and ensuring that improvements do not negatively affect sociological and other aspects of the chain needed to be addressed.
The workshop process included mapping the flows of fruit, information and funds, and a SWOT analysis to identify areas for improvement. The potential improvements were compiled and classified under the six principles of supply chain management - knowing customers and consumers, creating and sharing value, getting the product right, logistics and distribution, information and communication, and effective relationships. The key improvements were then prioritised using a voting system. The key priorities included expanding ripening facilities to ensure market growth, maintaining fruit quality and information flow while the business is expanding, and improving relationships within the company board.
The project team found that the supply chain must have a strong champion who is willing to push for improvement and little chance of gains where no champion can be identified. Strong commitment from the other members of the supply chain was also essential. This was one of the failings of the Australian exercise, which had resulted in poor attendance at the supply chain workshop.
The team also found that the priorities identified (including R&D priorities) depended strongly on the representatives at the meetings, because of their biases and experiences. This reinforced the need for commitment and involvement from all key members of the chain.
Group meetings were deemed less beneficial in the Indonesian context because the more hierarchical nature of their chain meant that growers and possibly collectors were less likely to contribute to meetings. It was far better to encourage one-on-one consultations with each party.
These refinements are now being applied by the Indonesian agency partner to several other horticulture industries in Indonesia, with good results. In addition, there have been a number of presentations and discussions with Ministry of Agriculture researchers and senior members, and at ministerial level, on the benefits and techniques of the SCM approach. Training in these concepts is on-going. The Australian experiences are being applied in other Queensland horticultural industries and to another ACIAR project being developed with the Philippines.
About 50 regional representatives attended an International Supply Chain Workshop in Bali in August 2003. They shared experiences on using the supply chain concept in a range of projects. The discussions indicated that the supply chain approach is providing considerable benefits, and confirmed the significant role that the trader can play in driving change both up and down the chain. The proceedings (ACIAR Proceedings 119) are accessible on the ACIAR website.

Project ID
Project Country
Inactive project countries
Commissioned Organisation
Queensland Department of Primary Industries, Australia
Project Leader
Dr Peter J Hofman
07 54449647
07 54412235
Collaborating Institutions
Indonesian Agricultural Postharvest Technology Research Institute, Indonesia
University of Queensland, Australia
Central Research Institute for Horticulture, Indonesia
Project Budget
Start Date
Finish Date
Extension Start Date
Extension Finish Date
ACIAR Research Program Manager
Dr Greg Johnson