Production chain

Below, I will be analyzing vertical boundaries of the canned olives industry in morocco. Moroccan canned olives firms produce 130.000 tons of canned olives annually. With this production, Morocco is ranked the world’s second producer of this product. 92% of this quantity is exported to the European Union. Considering competitiveness factor which is based on wise management of resources both human and logistics, it seems that quality is a fatal factor in canned olives production process. The widest is the range of consumers; the more profitable are the canned olives factories. Moreover, in a context where the market is reachable for all in terms of logistics, communication and marketing, the organoleptic and dietetic quality factors seem to be the decisive element between failure and success.

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In order to achieve the purpose of a good quality/price ratio, canned olives firms have a rigorous control over technology, human resources and manufacturing costs. However, the production of low quality raw olives in the field and ignorance of the diverse costumers needs lead to a non satisfaction of the market demand in term of quality preferences, hence, waste of canned olives produced by Moroccan olives industry. “This waste in terms of production and value is reduced by vertical integration of all production phases” (Micheal E Porter …).

On this basis, “l’Association du Maroc competitive” have introduced vertical integration in the Moroccan agro-food industry. Canned olives sector is then divided into three segments which are: field production, manufacturing and commercialization. By combining these three segments, the farmer, the firm and the wholesaler became, henceforth, a unique unit. In fact, Specialist suppliers can achieve a size and degree of specialisation that enables them to conduct activities more effectively and efficiently than when they are conducted inhouse.

Information technology and human resource management represent two activity areas where inhouse providers can experience difficulty competing with specialist suppliers (Domberger, 1998, Kakabadse and Kakabadse 2000). Farmer as specialist supplier of raw olives and the wholesaler as specialist supplier of information and clients needs contribute to the economies of scale. The objective of this integration is to dissolute information waste and lack of control over quality in the streamline of production chain.

Then, in the upstream level, firms control the quality of raw olives by owning their own olives field or by contracting a sever contracts with farmers. In the other hand, firms produce in response to the specifications expressed in terms of costumer’s needs and preferences. Quality and quantity are, then, two correlated criterions which condition the production process. The unique unit manages and adapts then its production in terms of quality and quantity according to the market movement.


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