Humanitarian Logistics and the Transformational Agenda after an Emergency.

There is more to any Humanitarian disaster than an immediate RESPONSE. It is not earthquakes that kill people – it is buildings; and so, many countries make themselves more RESILIENT to disaster ensuring that building standards can withstand geo-meterological threats and, that logistics procedures are in place to deal with worst case scenarios and facilitate rapid response.

Resilience is important. Emergencies have been growing in scale. According to the Munich Reinsurance group, the real annual economic losses have been growing steadily, averaging US$75.5 billion in the 1960′s, US$138.4 billion in the 1970′s, US$213.9 billion in the 1980′s and in 2004, the World Bank estimated that the annual global economic costs related to disaster events average $629 billion per year, five times that of 20 years ago.

This is about local impact. There is something else; global impact – because of the nature of integrated, and stretched, global supply chains. This takes us to the third dimension or phase of any Humanitarian response – RECONSTRUCTION.

A wider impact than this

 

CIVETS and the transformational agenda

Mature markets are struggling and emerging and developing markets are becoming increasingly attractive to companies and investors looking for growth. Put this in perspective. Despite a 25% depreciation in sterling since 2007, only 4% of UK Exports go to the so called BRICs combined – this is less than the UK exports to Sweden! The developed world has woken up to the potential in emerging and developing markets. Now is the time to do something about it and that means more than BRICs. Where else and, what are the challenges that have to be faced?

The Economic Intelligence Unit coined the term Civets (Columbia; Indonesia; Vietnam; Egypt; Turkey and South Africa) in 2009 to refer to a second division of developing markets which will grow three times as fast as mature markets this year. The EIU predicts growth rates of .9 per cent for Civets countries over the next 20 years compared with 1.8 per cent for the G7 countries.  Although it was only established in 2007, the S&P CIVETS 60 index is ahead of the S&P BRIC 40 and S&P Emerging BMI over one and three years.

There's life beyond BRICs ...

CIVETS countries all have large, young populations, with an average age of 27. This, or so the theory goes, they will benefit from fast-rising domestic consumption. CIVETS are also all fast-growing, relatively diverse economies, which means, unlike the BRICs, they should be less heavily dependent on external demand. This is a sketch and more details will follow in other blog posts on each CIVETS economy and, another group centred on Jim O’Neill of Goldman Sachs concept of the Second 11; the next eleven economies after the BRICs.  Meanwhile, here are some quick notes…

 

How do you build sales in fast growth markets without maps?

As the developed world stagnates and shows little sign of rapid recovery, it is clear that an increasing number of Multi National Corporations will be looking harder at emerging and developing markets for the growth that shareholders look for. So, what does the future hold for big brands in this brave new world?

How do we deliver over there?

 

Transformational capitalism

He sold fruit on the streets of Sidi Bouzid, Tunisia; operating from a vendors cart on two square yards of public space and had to pay bribes to work undisturbed. That day, 17^th December 2010, there had been an argument and so two police officers confiscated his two crates of pears ($15); a crate of bananas ($9); three crates of apples ($22) and a set of electronic scales ($179, second hand). Given the fact that he had bought his merchandise on credit and he could no longer sell it to pay his creditors back he was bankrupt. One hour after the police had closed down his business, Tarek Mohammed Bouazizi – known locally as Basboosa – set fire to himself yelling “how do you expect me to make a living” and triggered the Arab Spring. According to the Sidi Bouzid’s state office for employment and independent work, no permit is needed to sell from a cart. Unemployment in the area stands at 30 per cent. Within weeks many of the estimated 200 million Arabs who work in the informal markets of the Middle East and North Africa started to mobilise.

How else can I make my living?

 

Fruit Miles, Martin Kiszko

Boxes, punnets, packs and bunches,
Piles and piles of long-hauled fruit -
Flown en masse from other countries -
Stacked on supermarket shelves.

 

Architecture and the transformational agenda

This Blog has focussed the need to move beyond mainstream logistics and supply chain thinking relevant to the developed world and respond to a quite different context in emerging, developing and devastated markets – Transformational Logistics. Increasingly, we see this agenda as having wider scope; that a Transformational agenda is highly relevant to other spheres where local context needs to be respected with a triple bottom line of planet and people as well as profits to be considered.

Vertical means developed world architecture

A while back, I went to the Whitechapel Gallery in London and saw Twins, a piece by the Indian photographer Rashid Rana. From a distance, the two prints (171 x 228 cm) are streaked with light. Close up, each canvas is made up of tiny photographs of dwellings characteristic of the Majority World. It reminds me of the view from a plane on a landing approach anywhere from Jakarta to Soweto; Luanda to Rio; Dharavi in Mumbai and the adjacent Financial District.

 

Traditional supply chains mean business too

Global business is under pressure with sluggish growth or recession in the developed world and huge potential in emerging and developing markets demanding the infrastructure and skills to deliver sustainable growth. There are industries led by MNCs (Multi National Corporations) that straddle frontiers characterised by modern, high tech and consolidated operators and others that remain local, traditional, low tech and fragmented. And yet, there is more to be gained by seeing these extremes as part of a continuum and not as opposing forces to explore mutually beneficial initiatives that can enable us to understand better how supply chains function in all sorts of traditional, modern or hybrid contexts.

This story picks up momentum on a beach in Rushikonda, just 13 kms from Vishakhapatnam on one of the best rated beaches on the south east Indian coast. One morning Rob Bell was walking the beach and, having taken a photo of a fishing boat on its way back to the shore continued the sequence on to the beach; unloading the nets; sorting the species and sizes and then, as the women arrived to trade with agents, an idea took shape …

Off to market

 

Design transforms livelihoods

Last year, Dr Graham Hamilton of Yorks St John University led a team visiting the NAESEY Project in Tamil Nadu – a training initiative for the rural unemployed. This year they repeated the trip which featured a design initiative led by James Fathers – also of York St John. Here are some notes built from discussions with the team leaders and, observations from  Nottingham University student Ben Hagyard, the winner of an Archomai Studentship to Naesey and an excellent exponent of the spirit of enquiry!

Adding value building livelihoods through design

 

Are International retailers running out of road in emerging markets?

Much is made of BIG Retail with more than 80% of the retail market in the US; the UK and most of the EU in the hands of major retailers. Now, in many emerging and developing markets the debate on modern International retailers expanding into emerging markets has polarised debate. Some claim that International Retailers are a vital catalyst to serve the needs of increasingly prosperous consumers; others warn that corporate imperatives are not always compatible with local needs. Whichever side of the argument you are on, both tend to agree that BIG Retail knows how to generate profitable business – or does it?

In recent weeks, stories have started to appear about International retailers reporting profits warnings because of a combination of fragile economic conditions in their domestic markets and, difficult trading conditions in emerging and developing markets. Are these the first signs that the major retailers do not have all the answers? First, the background.

It takes all sorts

 

A Transformational Agenda at GITAM School of International Business

Yesterday, Dr D Subbarao, Governor of the Reserve Bank of India gave a fascinating Lecture on “India and the Global Financial Crisis” to the GITAM School of International Business at Vizag in Andra Pradesh, India. Emphasising the need to diversify the economy he referred to the inclusive agenda and, the opportunity to develop rural markets as part of sustaining economic growth.

These two priorities, inclusivity and rural markets, were covered in a ground breaking series of lectures given at GITAM over the past two weeks on Transformational Logistics; an umbrella term for logistics and supply chain thinking in emerging, developing and devastated markets. This course explored these markets not as “an act of charity”, not as an “act of corporate social responsibility” but as a viable option to build sustainable, inclusive and innovative growth beyond the mature – but largely stagnant – developed world. This is not about sharing best practice from those “that know” but building fresh practice from markets that have an acute survival instinct and an ability to adapt that can be an inspiration elsewhere. All businesses can benefit from these markets beyond the mainstream in many ways.

At the invitation of the Director of GSIB, Professor V.K. Kumar Rob Bell led the sessions with Dr P.R.S. Sarma and Assistant Professor Ram Bhagavatula.  This is a detailed overview of the Course. These are the core units.

1.      Mainstream Logistics. Drawing from the work of Martin Christopher (2011), John Gattorna (2006) and, a sample of key Papers from the Logistics and Supply Chain discipline the sessions started with an overview of mainstream logistics highlighting all sorts of examples from lean to agile supply chains and, logistics and supply chains as a source of competitive advantage. This revision session linked to GITAM’s established Logistics Course.

2.      Checking our assumptions. The three F’s crisis (Food; Fuel and Finance) has accelerated a number of trends (the pace of the BRICs; G7 to G20) and, questioned a number of fundamentalisms – not least, as George Soros coined the term – market fundamentalism.

The Group explored ideas on Globalisation; Growth and free markets in this fresh context and, explored the impact such global shifts have on logistics and supply chains in all industries.

3. The Brands New World.With Global population rising from 6 to 9 billion by 2050 As Dr Subbarao had said in his talk earlier today, there is a need for greater inclusivity and, exciting potential to develop rather than ignore rural markets. Equally, there is a role for traditional industries in the business mix.

The Rushikonda fishing community