FLORICULTURE CLUSTER IN PUNE, INDIA
Best practices By Laura Dos Santos Sarah Gay Saki Hanzawa & Louise Penin
I KNOW
I DO
Best practices Global view
I EVOLVE
ECO3. I’m ready to export my products
GOV3. I collaborate with them
GOV2. I am in contact with them
ECO2. I reduce waste in my pro-
ENV1. I measure my impacts on environment
GOV1. I identify my stakeholders
SOC1. I set up conditions to keep up the social performance
ECO1. I organize my process of production
SOC2. I do have good working conditions
SOC3. I implement the social performance to the strategy
ENV2. I reduce my impacts
ENV3. I innovate to reduce my impacts
Governance Toward a collaborative communication GOV1. I IDENTIFY MY STAKEHOLDERS
GOV2. I AM IN CONTACT WITH MY STAKEHOLDERS
Governance is a transversal stake for sustainable development and CSR. The aim is to gather stakeholders around one objective of global performance. To gather stakeholders, there are three phases: the identification, the communication toward them
GOV3. I COLLABORATE WITH THE STAKEHOLDERS
and, the collaborative work with some of them. In our cluster, the main objective is to create a synergy between all act ors and make t hem sharing their resources to be more efficient with fewer resources.
GOV1. I IDENTIFY MY STAKEHOLDERS
The first step toward a collaborative business is the identification of the stakeholders, that is to say know who they are, how they can impact you and what your level of dependence regarding them is. The aim of this best practice is to realise a cartography of all the stakeholders to see the strong and the weak points.
EXAMPLES
BENEFITS Stakeholders are part of the business so they need to be clearly identified to be included in the strategy. Without doing this, you can do anything to improve your business, you will never know the impact and so never really thrive and develop sustainably.
Table 1 for clusters’ actors: Name of the firm
Name of the boss
Number of employees
Table 2 :
INTEREST LEVEL
STEPS 1.
2.
3.
You have to know who the other actors of the cluster are, that is to say: their name, activity and size. You can fill the table 1 below to have a global view of them. You have to know all your stakeholders, that is to say your clients, providers, subcontractors, employees and other public institutions. For this, you can be able to position each of them in a cartography, like in table 2 and place everyone in a scheme like scheme 3. Regarding employees, you may be able to fill the table 4 for safety reasons but also to know their abilities, especially for daily workers & adapt your needs to the resources.. You have to know who your final consumers are in order to satisfy them and to develop new markets. So you need to have the percentage of your flowers which are sold in each market place in Europe. If you don’t know this data, do not hesitate to contact your export agent.
Type of production
Weak
Strong
Weak
Keep satisfied
Key actors
Strong
Minimal effort
Keep informed
POWER
Scheme 3 :
Table 4 for employees contact :
Name
Gender
Age
Contact in case of emergency
Speciality
GOV2. I AM IN CONTACT WITH MY STAKEHOLDERS
Once you have identified who are your stakeholders, establishing a strategy means not only knowing they exist, but also knowing what they want and how you can play win-win. For this, you need to be in contact and communicate with them. The aim of this best practice is to formalize a contact with the shareholders.
STEPS
BENEFITS The company will be able to set up a strategy on the long term thanks to the inclusion of the stakeholders. Indeed, without including them, the strategy is precarious because without foundations.
STEPS 1.
2.
You have to communicate with the other actors of your cluster to create visibility and synergy. You can choose various means more or less formal and more or less computing. We suggest you to do it by an intranet if it exists, a newsletter or regular meetings but you can be as innovative as you wish once they know you and want interact with you. You have to communicate with the external stakeholders you have identified before. This will create visibility and credibility. You can choose various means more or less formal and more or less computing. We suggest you to do it by editing charters to describe you mission, vision and values, your commitments and everything which could describe you. This is an example but you can be as innovative as you wish once you broadcast it in order to be understood and known.
3.
Each of the consumers (wholesaler) who buy your flower should be able to know more about you, and why not be able to contact you if he is convinced by the quality of your product? You can choose various means but preferably formal and computing solutions. We suggest you to do it by creating a website page with your contact and all kind of information you think your final clients
REFERENCES Chapter 7.5 of ISO26000 norm is dealing with the communication with the stakeholders regarding CSR. GRI Guidelines are also recommending communicating to stakeholders, following their indicators.
GOV3. I COLLABORATE WITH THE STAKEHOLDERS
Once you have identified your stakeholders, you communicate with them and you know your business position, your aims and your strategy thanks to this knowledge, you need to go further your restricted action field: you need to collaborate with other actors of the cluster to look out the outlook on the long term. The aim of this best practice is to create a synergy between all the cluster actors, made of resources sharing.
STEPS
BENEFITS Create a synergy between cluster actors through a common vision will make them cooperate and help each others. It will be easier to progress but also to face problems and crisis. Indeed, with resources sharing, risks are lower while benefits are higher. Thanks to this best practice, we can hope for the cluster a growth to propel it amongst the biggest floriculture actor in India.
STEPS 1.
2.
Now you know and communicate with other clusters’ actors, you have to benefit from the synergy to gather and create global vision and values. So you have to create a document with these commitments, agreed and signed by several actors. See Kenyan’s floriculture cluster example on reference 1. You have to report in a common document, published once a year to explain what you did and what you will do economically, environmentally and socially. ISO26000 norm and GRI are referring to this practice (cf. ref. 2). Read also our “create your sustainable development report” guide on Blueprint21.
3.
To be the more efficient possible, you have to share your resources with other clusters’ actors. You have to imply a computer system to know resources available and match them with your needs. A French project, detailed in reference 3, aims at valorising resource sharing and explains what the advantages are.
REFERENCES Reference 1 : http://www.fpeak.org/about.html create your sustainable development report is a guide you can find on our blueprint21 platform. Reference 2 : Chapter 7.5 and following of ISO26000 norm is dealing with the communication in sustainable development field and particularly in reports. Global Reporting Initiative is a guideline to help creating CSR reports. Reference 3 : muressa.org (in French) - 4 kind of exchanges are possible : skills, logistic resources, tools and expériences
Economics Toward a lean management ECO1. I ORGANIZE MY PROCESS OF PRODUCTION
ECO2. I REDUCE MY WASTES OF PRODUCTION
Flower is perishable agricultural product, so in order to avoid losses as many as possible, it is the most economical to produce the product what cust omer needs, the exact amount, and to deliver it at the right place, at the right time. For example, responsive order system, production schedule following
ECO3. I AM READY TO EXPORT MY PRODUCTION
the order, shipment instructions to growers, and fast reliably distribution from producers to customers. For build it, we are inspired by Just-in-time of Toyota Production System or method of eliminating waste, and eventually we will adapt the s a m e m e ch an i s m t o international export.
ECO1. I ORGANIZE MY PROCESS OF PRODUCTION
India has good prospects in the floriculture industry but it is still largely unorganized. So far growers have not been receiving orders, and they sell the volume of flowers which could be harvested at the auctions or to the wholesalers. In the first step, we shift from the old system to the new optimized production process. We aim at establishing a process for deploying the order system, building the production schedule and delivering quickly to customers.
REFERENCES
BENEFITS Farm products are unlike industrial products in difficulty of production control. Therefore, in the traditional process, there is no production schedule and not enough to respond to customer needs, or a lot of losses had been made. Thanks to new process, we are able to achieve quick response to customer needs, lean production and cutting of losses during transportation. Moreover, we can expect that the price will be lower when the supply exceeds the demand.
The necessity of precision agriculture. – Use appropriate technology to bring precision agriculture to Africa and India. Global-economic-symposium.org
EXAMPLES
STEPS 1.
You should set up an electronic order system which can use with your customers.
2.
You can make a production schedule thanks to orders.
3.
You must find transporters or own logistic chain for deliver in time, at the right place without fail.
For the electronic order system. – The system calls cultivators to harvest and shipment after receiving orders from several sales destinations. Itmedia.co.jp (in Japanese) For the production planning: interface.highwire.org For the logistic system: ideas.repec.org , Growdirect.com
ECO2. I REDUCE MY WASTES OF PRODUCTION
In the second step, we will completely eliminate elements of production that do not create value (MUDA = wastes) in order to reduce the cost while producing timely the high quality product and receiving customer orders. It calls “MUDA” in Toyota Production System. The most important thing is to continue struggling on elimination of MUDA, and also to put 5S get clues to find wastes.
BENEFITS Eliminating MUDA is required in various phases, for example, to cut extra motion and transportation promotes your operational efficiency. Also, we can expect cost reduction to avoid over-production, too much inventory and defects. Just keep the workplace neat and tidy, we can discover wastes, and it will lead to improvement of the workplace.
STEPS For eliminate MUDA and improve for the better , there are several approach. 1.
You introduce the method of 5S on your production process.
2.
You find ways to visualize your wastes (reference 1).
3.
You make an effort for the continuation of improvement.
REFERENCES Reference 1 : About the seven MUDA, and the 5S : doshnsclick.files.wordpress.com
EXAMPLES There is example of initiative that was introduced into agriculture Toyota Production System in Japan. It was a salad leaves farmer. Similarly, Indian rose grows fast and it can be harvested several times a year. Therefore it’s easy to measure the improvement. Tokyokeizai.net (in Japanese)
ECO3. I AM READY TO EXPORT MY PRODUCTION
India’s share in international trade in floriculture is around 0.18%. To compete with Kenya and Uganda which are major exporters to the European market, we have to take more overseas orders. For the third step, in order not to miss the opportunity to enter foreign market, we ready for export such as we could respond quickly to international orders.
BENEFITS Computerization allows for immediate response and does not miss the overseas demand. To facilitate both logistics and export conditions in cooperation will lead to lowering the barriers for many farmers to export. As a result, Indian trade would rise in the world market.
REFERENCES CBI (Centre for the Promotion of Imports from developing countries) : cbi.eu
EXAMPLE
STEPS 1.
You connect with international customers through real-time order system.
2.
You improve your logistics with other farmers in collaboration.
3.
You work on the negotiation for conditions of export.
Example of joint export in Israel : hortibiz.com Example of joint project CBI and Ethiopian flowers : cbi.eu
Social Toward a better image of the working conditions in floriculture management SOC1: I SET UP CONDITIONS TO KEEP UP THE SOCIAL PERFORMANCE
SOC2: I DO HAVE GOOD WORKING CONDITIONS
Floriculture is one of the industries that require a large labour force with limited skills. The production involves grading, packing, harvesting, tending beds, watering and so on. In India many of the workers are poor and vulnerable to exploitation. The bad working conditions are more and more an obstacle for customers from developed countries which can
SOC3 : I IMPLEMENT THE SOCIAL PERFOMANCE TO THE STRATEGY
choose a flower which comes from a developed country where the workers are probably better treated. Implement a social strategy is a way to seek for a n e w d e m a n d . T h e recommendations of the Ethical Trade Initiative, an international label and the ILO will guide the establishment of best social practices.
SOC1: I SET UP CONDITIONS TO KEEP UP THE SOCIAL PERFORMANCE
Set up conditions to keep up the social performance means that the company provides resources to manage the social improvement. It involves criterias of recruitment which respect human rights but it also involves people among managers and workers who are spokespersons and responsible of the project
BENEFITS The social aspects of work in floriculture are more and more watched by NGOs and occidental consumer which is the target of your cluster. In Kenya, serious violations of the human rights were reported and pushed the company to re-think their model. Beyond that, the social performance will prevent from social rebellion and will assure a better management of human resources. It means to be able to adapt the work force to any change of the production process. Responsible persons had to be designed to conduct the social improvements.
STEPS 1. You need a responsible of the working conditions among managers. It has to be someone who is comfortable to discuss with employees, someone who has good interpersonal skills. 2. Design a spokesperson among your employees. He can be chosen by the employees to be more legitimate 3. Your criterias of recruitments have to include no child labour, employment freely chosen and no discrimination
REFERENCES Smith, S. et al (2004), Ethical Trade in African Horticulture: gender, rights and participation, Genderandtrade.org
SOC2: I DO HAVE GOOD WORKING CONDITIONS
The Declaration on Fundamental Principles and Rights at work (ILO, 1998) written by the International Labour Organisation, an agency from the UN define standards as fundamental rights at work. These standards are grouped in four categories: freedom of association and the effective recognition of the right to collective bargaining, the elimination of forced or compulsory labor, the abolition of child labor, and the elimination of discrimination in respect of employment and occupation. As a member of the ILO, India respects those fundamentals rights and labour laws are the same in every state. These are the basics to provide good working conditions.
BENEFITS By respecting basic fundamentals of the human rights at work, the company will be able to communicate about it and to become a model and an attractive place to work.
REFERENCES ILO, 1998 The Declaration on Fundamental Principles and Rights at work http://www.ilo.org/declaration/lang--en/index.htm
EXAMPLES
STEPS 1. You register the work-related accidents 2. You have a device control for the working hours
A Register example : Name of injured worker__________________________________________________________ Occupation or job title___________________________________________________________
3. You offer at least the minimum wage to all of the workers?
Date of injury____Hour ____ am/pm Worker’s exact location at time of injury___________________________________________ Exact description of how injury sustained__________________________________________ Nature of injury and body parts affected__________________________________________ Details of treatment given________________________________________________________ Return to work : yes/no Name of witness (if any) to the injury______________________________________________ Name of person making entry____________________________________________________
Signature_________________________________________Date of entry_______
SOC3 : I IMPLEMENT THE SOCIAL PERFOMANCE TO THE STRATEGY
Social performance is not just about profits for the society, it will be a competitive advantage for the company. The condition is to implement it into the company’s strategy. Each crucial decision about the production process, about how to make create value has to be thought with the human resources. A more ethic trade approach will be valued for the company and their clients. To be internationally recognised the Ethical Trade Initiative label wich is based on ILO standards will be an interesting target. It is a label supported by well known groups as Tesco, Sainsbury, M&S which could be potential retailers but also holding of horticulture. They have an expertise in floriculture in Kenya so they are able to propose a well-adapt support.
BENEFITS Having a real management of human resources will assure to the company to be more competitive. First by having the right human to the right place with the right job and then by showing to the developed countries that they are ethical.
STEPS 1. Establish a monitoring committee in the cluster to control the social performance. 2.Adapt the ETI base code to your industry with the responsible(s) and spokesperson(s). 3. Prepare the cluster to apply for the Ethical Trade Initiative label.
REFERENCES ETI, (2011) The flower industry http://www.ethicaltrade.org/in-action/ issues/the-flower-industry
Environment Toward a sustainable agriculture ENV1 : I MEASURE MY IMPACTS ON ENVIRONMENT
ENV2. I REDUCE MY IMPACTS ON ENVIRONMENT
The floriculture production is mainly under poly houses in India. This way of producing is beneficial for a huge quantity of flowers as it can be controlled. But it demands important energy consumption and water consumption. Moreover, the use of chemicals can reduce the quality of soil. Not only f o r p r e s e r v i n g t h e
ENV3. I INNOVATE TO REDUCE MY IMPACTS ON ENVIRONMENT
environment but also in order to reduce useless costs, it is important to reduce the impacts on environment of e n e r g y , w a t e r a n d chemicals. Moreover, Indian government want to develop the sector of clean t e c h n o l o g y . It’s a new opportunity to be more respectful for environment, save costs, and become more attractive.
ENV1. I MEASURE MY IMPACTS ON ENVIRONMENT
This first best practice is a diagnostic of the actual situation. That means setting up right tools to measure the consumption of the three types of consumption in order to adopt the appropriate and pertinent acting plan. Diverse tools can be adopted to realize this best practice. An easy and recognized one to measure its impacts on environment is the global footprint. Both consumption of chemicals and energy are taken into account and allow the companies to have knowledge of theirs greenhouse gases is terms of CO2. To measure the water consumption, the Water Footprint is a tool originally developed by Arjen Hoekstra et al.
BENEFITS
STEPS
Measuring impacts on environment through recognized tools as the global footprint and water footprint will be beneficial for the producers because it will show the main post of consumption. As a result, an appropriate and pertinent action plans of reduction. The tools we recommend are internationally recognize and reliable. They will help the decision-makers recognize the impact of ecological overshoot on their own policies, investments and projects, and demonstrate that it is both in their interest and within their power to turn the tide. It’s just after measuring it that we can make a strategy to become more responsible. Indeed, it supposes to have the appropriate tools to measure it.
STEPS 1.
You know the consumer posts of energy / water / soil in our company.
2.
You have tools for measuring your consumption of energy / water / chemicals. (Global Footprint, Water Footprint‌)
3. You know the consumption of energy / water / chemicals of your competitors so you can compare yours.
REFERENCES The ISO 14001 is about environmental management and refers the life cycle analysis as a condition to be certified. The ISO 14040 and 14044 are the references for measuring the impacts.
EXAMPLES Global Footprint Network, water footprint : footprintnetwork.org/
ENV2. I REDUCE MY IMPACTS ON ENVIRONMENT
After measuring impacts on environment, the company must be able to set up actions to reduce the consumption of energy, water, and use of chemicals. The company must have objectives of reduction and an action plan to reach them. Some example of actions in the area of water consumption is reducing the frequency of irrigation or the outputs of water. In the case of energy, it could be not to overheat the polyhouse and turn out the lights when it’s not necessary. As the production is protected, the sun could be sufficient to assure a good light and a good heat. As for the use of chemicals, it could be using other type of entrants as bio-fertilizers, more respectful of the environment.
BENEFITS Reducing its consumption of energy, water and chemicals will be beneficial for the company as it will reduce its costs. Moreover, it will improve its image and could have an improvement of the demand. It will be also beneficial for the producer and the cultivator for its health and for the environment as it will be more respected.
STEPS 1.
You have precise objective of reduction.
2.
You set up a strategy to reduce your consumption.
3.
You reached your objective of reduction.
REFERENCES As for the measure of the impacts, the reduction is also referenced in the ISO 14001 norm.
EXAMPLES Tissue Innovant (TI) is a Canadian company producing tissues with chairs or curtains of hospitals for the market of the furnishing. This SME (SMALL AND MEDIUM-SIZED ENTERPRISE) of 200 employees evolves in the very competitive industry of the textile. It’s the biggest manufacturer in Canada and takes place in the fourth rank in North America, ISO-certified 9000 and ISO 14001, TI, by its environmental practices, reduced of 80 % its greenhouse gas emissions, of 24 % its use of energy, 74 % its water consumption; the company recycles 99,9 % of its fabrics(tissues), some plastic and some paper, while increasing its use of renewable energy until a 91 % level.
ENV3. I INNOVATE TO REDUCE MY IMPACTS ON ENVIRONMENT
This best practice provides new ways of managing the production in a more eco-friendly way. In the sector of agriculture, there are plenty of investment to be more efficient and at the same time more respectful of the environment. Innovation is not only a good way to adopt a positive impact on environment, but also to be more efficient. Clean technologies or renewable energy are products and services that reduce the risk of harming the environment, minimise pollution, minimise the amount of materials used and correct environmental damage.
BENEFITS Innovation in this area demand high investment and adaptation to learn how to manage it. But it’s not comparable with the benefits that it can provide. The clean technologies let companies using renewable materials and energy sources, limit the energy use, reduce the use of natural resources, reduce or eliminate waste, and then reduce costs in a long-term perspective. By investing in clean technologies, the producers broadcast a new image, more positive and at the same time can be more efficient.
STEPS 1. You set up a process of competitive intelligence in clean technologies. 2. You invest in clean technologies to be more efficient. 3. You do R&D in the environmental area.
REFERENCES The sustainable agriculture network (SAN) is working to improve farm standards to make them more respectful through environment. Every few years, the SAN does a complete overhaul of the standard for farms that want to promote their products as Rainforest Alliance Certified™. Their principles for a sustainable agriculture are sanstandards.org
EXAMPLE Bhubaneswar: Chief Minister Sri Naveen Patnaik has felicitated farmer Soumendra Behera for his innovative endeavour in floriculture in a special function “State Level Agricultural Fair” organized by Agriculture Department. orissadiary.com Horticulture cluster 2020 project in Netherlands: a new concept has been developed to tackle the issue of energy : the greenhouse as an energy source. innovatienetwerk.org