Input-output model for economic evaluation of the supply chain: the case of cut flowers exportation

Abstract: The main objectives are to evaluate the performance of the cut flower sector, concerning supply chain integration and foreign market competitiveness, and to heighten the understanding of the contributions and obstacles of logistics in floriculture. An IO model developed proved to be an important tool to evaluate the impact of changes in the processes involved in exportation chain. Data were colleted from representative actors of the chain, in the Holambra and Greater Sao Paulo regions, referring to every stage associated to the gerbera and lily exportation processes, i.e., from production (A), to internal distribution by highway modal (B), to external distribution by airway modal (C) and to external distribution by highway modal (D). Five scenarios were built to analyze deficit and surplus and to evaluate the impact of failures occurring in each process of the cut flower chain. Technical parameters were identified in the scenarios, mainly related to logistics, that could interfere in the cut flower exportation. The values of three of them - number of stems by box, exchange rate and air freight - were modified and combined to create 36 simulations to support the scenarios analysis. The results point to the need for differentiated logistic adjusts in each process, according to the type of relationship established among the actors involved in the stages. The development of the chain as a whole may be affected by lack of knowledge on the characteristics of the exported product, which causes distortions in the information forwarded to the actors. It was verified that failures occurring in each phase could increase costs and inhibit exportations in the event of unfavorable exchange rate movements. Also, an increased stem number commercialized by box represented an alternative to assuage cost increases through the chain. Although production is characterized by an important link throughout all stages, unless the minimum conditions for adequate storage and transport are fulfilled, there will be significant losses in the commercialized volume, thus reducing this product competitiveness abroad and discontinuing its exportation in the long run. Integration of the chain is essential to the optimization of exportation.