National Planning Roles: State, Sub-Sector and/or Association, and Enterprise

Background

Everyone has a role to play in the bigger planning process picture, and interestingly, in both directions. From top to bottom, the state has to make long-term plans in several areas, starting with the bigger picture, as may be reflected in strategies, breaking it down into shorter horizon components, ultimately into annual plans. From the above, the private sector has to 'set' internal plans taking into account the laid out plans by government. For example, Uganda Manufacturers Association (UMA) members may wish to focus on strengthening a particular business line, for instance, move into exporting instant coffee to the Far East. For that it would require looking at a complete chain, starting with growers, their national annual production capacities, the conventional processing by existing private coffee factories, their individual and aggregated capacity, subsequent processing and packaging for the final product of instant coffee. There would inevitably be need for identifying gaps in additional crop acreage to be grown, attendant inputs, labour, equipment and finances, and likewise, up the chain, eventually resulting in detailed plans for all players that need to be implemented to the letter in order to achieve the overall goal.

Planning is a Continuing Process

This process can be said to start with a wish, sketching a strategy to address the desire, breaking the task into components at lower levels, identifying implications such as financing, ' lead ' time, and importantly, expanding without losing sight of what has been done to date. In other words, can we expand to new horizons while continuing to meet regular obligations? In the case above, not only do we need to start exporting high value coffee in 'finished' form, we also need to continue to supply traditional markets with bags of coffee beans as has been the case for decades, even if more is to be required.

Sometimes the targets are in excess of capacity to meet them within a timeframe, financial resources and the like. Often, global resource requirements may exceed capacity, for causes such as cost of financing. The plans would then need revision, sometimes scaling down, 'trading off' what should be foregone in order to facilitate another more lucrative endeavour or the like. This then can be revisited, from the either the 'top' with state contingency measures, or from 'bottom' with enterprises proposing changes, or, a combination of both.

Management Science Role

The role 'management science' , has been to contribute to 'modelling' and determining some level of 'optimum' in the entire process, provided adequate and accurate data is used. Our aim this time, is to introduce such processes, applicable at all levels. Management science provides the tool to seek to achieve desired goals at 'least cost' or such other objective as may be in the interest of the reviewer.

Instant Coffee Example

To demonstrate an approach that could be used for planning, I have taken a 'case study' in the coffee sub-sector. It starts with a background brief, moving into a summary of important 'parameters' for a 'preliminary model' , identifying main role players with some of their responsibilities.

Objective / Long-Term Goal

Export instant coffee, to increase local value added and improve foreign exchange earnings for all players, viz, the farmer, traditional processors of coffee beans, with a new group of instant coffee makers and packers. It is intended to result in additional coffee grown, beans processed, meeting traditional coffee been export quotas, and, instant coffee produced for a new set of markets.

Financial implications would be greater foreign earnings through diversified exports, with benefits trickling down the chain to more large-scale farms and the peasants on their small plantations.

Background

Uganda has a competitive advantage in the agricultural sector, with capacity to produce coffee for local, regional and international markets, and through Uganda Coffee Development Authority (UCDA) and various research centres under the Ministry of Agriculture, Animal Industry and Fisheries (MAAIF). Investment in the coffee industry is one of those areas where Uganda through Uganda Investment Authority (UIA) is given high priority in the interest of raising employment and incomes, through internal production, both agricultural and manufacturing, and, target increased exports.

Model

Continuing to export coffee beans with the prospect of increased volumes in addition to securing new markets for instant coffee exports has the following broad implications:

(More primary production)

(More pre-factory processing activities)

(More bean factory processing activities)

(More instant coffee production activities)

Related Activities

For effective execution of the project, the following factors need to be reviewed and requisite action given due consideration:

(Intra-enterprise activities)

(External factors)

(Government roles)

Planning Approaches

Of necessity, a need is realised at some level or by someone, be it at the 'top' in government, bottom, 'the entrepreneur', or someone at intermediate level. Then there are probably two ways to go, either from the top (ideally for 'large' national projects) toward the 'bottom', or vice-versa. Either way, the process will need to move 'up-and-down' several times until stability is achieved, or wishes dropped and a project is abandoned. If feasible, stability increases with time, a feature characteristic of the 'way of life'.

These are worked through an example, which can very well be the 'instant coffee project' cited earlier above.

Top - Down Approach

This approach starts from the top after realisation of a need, with government planning at 'macro' level, with a wide consultative process involving all stakeholders in a project, spelling out overall national objectives, detailed project plan with 'gross' production, processing, local supply and export potential, with attendant expected time frame, capital and recurrent expenditure, and likewise, 'hierarchically downward' to the bottom stakeholder in the chain.

GOVERNMENT

Initially, government may have gone through the following:

Markets Found

The following may emerge as a summary for a project targeting exports:

Aggregates (exports)

(to destinations)

(to Mombasa)

(in volumes by destination)

etc.

Country Details (per country)

Roles

Spell out roles of government and other parties as under:

(Government)

(Others)

Finances

SUB-SECTOR LEVEL ASSOCIATIONS

Such entities would address the likes of:

PROCESSING ENTERPRISE

These members of the above associations are the next in line, with the following tentative roles:

FARMER

In our instant coffee example, the farmer is the last category in the downward chain, with possible roles as below:

UTILITY AND OTHER SERVICE PROVIDERS

(Energy / power, water, banks, telecommunications, transport - land, air, sea, forwarding)

This category comprises of others that may be deemed to be indirectly involved in any specific business endeavour, but essential to many an enterprise:

Bottom - Up Approach

In the example above, the project may have been conceived at the top, government. After the 'top-down'

path, there will be findings / needs for successful implementation. As is typically the case, it is highly unlikely that all will work like 'clockwork', especially in a young economy with many bottlenecks, with many not up to the understanding of how crucial 'unswerving commitment' is to success.

The process is likely to reveal many obstacles particularly relating to finances, 'logistics', equipment, other material inputs, to mention but a few. The search for ways to go around obstacles is likely to result in changes, that may result in the reverse direction changes, not necessarily starting at the bottom.

The 'backward and forward' search may be repeated several times, even before viability is in sight. But in the interest of getting the process going, players need to demonstrate commitment to search of a workable solution in view of the benefits that lay ahead for all.

Management Science: The Desk Simulation / Analysis Tool

Having origins in 'operations research' , management science has been developed to quite a degree of 'modelling' , seeking to reveal options to take in order to meet a desired objective, often to get the most of a benefit, or, spend the least to achieve an outcome, subject to meeting certain 'constraints' . The validity of such 'paper' experiments or 'simulation' very much hinges on the model being adequately 'representative' of the situation at hand and the 'correctness' of the data used.

We will probably take components of this 'instant coffee' problem to demonstrate some of the ways we could put management science to good use in issues to follow.