Holistic Supply Chains

Holistic Supply Chains

In the Indian herb industry, it is very rare for there to be direct contact between the farmer/collector and the end buyer; herbs are normally traded through a long chain of notoriously secretive middle-men.

With no means of communicating with the producers, and little scope for 3rd party certification, there is nothing the end buyer can do to influence the methods of cultivation, collection, drying or storage, all of which play a vital role in determining the quality and sustainability of the end product.

As a consequence, many manufacturers of Ayurvedic medicine in India struggle to find good quality raw materials for their herbal products. They may be able to influence the quality or sustainability of herbs that can be locally grown or cultivated, but many of their products are likely to be multi-ingredient formulas containing herbs that are grown/collected in other parts of the subcontinent and need to be purchased through long, mostly invisible supply chains.

The result can be alarming; herb species are often misidentified or intentionally adulterated; I have been told of people finding dead rats in sacks of herbs; on several occasions I have been offered endangered species with fake CITES permits. Khari Bowli, one of the biggest herb trading markets in Asia, also specialises in chemicals, which are often stored alongside the herbs in one huge mess of damaged boxes and tattered gunny bags.

I am fortunate to have worked in India as a producer (with Biolaya) as well as an international buyer (with Pukka Herbs) and a consultant (for FAO) for small producers and Ayurvedic manufacturers in the domestic market. This combination of perspectives has shown me that, despite the massive challenges, it is possible (and in many cases necessary) to create a more integrated, or what I would call a holistic (i.e. non-linear) supply chain.

To do this – as with any healthy self-regulating system – there needs to be a means of communication (directly or indirectly) between all parts of the whole, with feedback mechanisms in place to make improvements where required. The whole supply chain needs to be able to work together to share the challenges and mutually benefit from each other’s successes.

If the supply chain begins with many smallholders or wild collectors, there needs to be some form of central organisation, company or cooperative to coordinate them, consolidate their material and serve as the central hub of communication between them and the buyer(s). Ideally, the organisation should manage their production through an Internal Control System or Wild Harvest Management Plan.

By consolidating herbs from multiple farmers/collectors it is possible to create economies of scale to invest in people and infrastructure for activities such as training, inspections, certification, processing, storage, testing, marketing and sales. The combination of these activities adds significant value to the herbs or herbal products, making it much easier for the umbrella organisation to access high value markets and pay a premium price to the farmers/collectors.

In terms of providing customers with quality assurance, there are also many advantages. Most importantly, the organisation has a personal relationship with all the farmers / collectors and knows where the herbs have come from. If the buyer wishes to visit the producers in person, it is easy to arrange. Unlike linear supply chains, in which the traders live in fear of their customers finding out who they buy from (in case they go directly to the source), a holistic supply chain actually benefits from all the links in the chain spending time together to communicate each other’s needs. It is, in the language of systems theory, made up of interdependent parts in which every part of has a specific function that serves the purpose of the whole.

With my buyer’s hat on, I can vouch for the immense value in meeting the people who grow/collect the herbs, getting to know the human stories behind where the herbs come from and being able to pass this on to the final consumer.

And in the context of buying threatened herb species, no amount of 3rd party certificates can ever replace the value of knowing every link in the supply chain, and being able to visit the farmer and share a cup of tea sitting in this fields.