December 2008


Much has happened since Sridhar and I thought about the unique characteristics of Logistics in India. I drew two boxes on a blank sheet and wrote ‘INFORMAL’ in one box and ‘FORMAL’ in the other. We talked through (Formal) Retailers sourcing from (Informal) Farmers in remote rural areas. Other examples flooded in from all over the emerging and developing world. Then, the lines that connected the boxes were added: physical, information and cash flows. Then, the questions and, slowly the ideas that are helping Transformational Logistics to take shape as a meaningful umbrella term – how logistics can transform economic and social outcomes within the informal economy and into the wider economy. Where are we now?

The following notes highlight progress made to date and set out the agenda for the coming months. (more…)

Sixty years after the United Nations signed the Declaration of Human Rights, meetings were held in Paris during December 2008 between UN officials and Business Leaders to explore ways to widen the scope of the Human Rights agenda.

In an interview with France 24 Mary Robinson, former President of Ireland (1990-97); former UN High Commissioner for Human Rights (1997-2002) and now leader of the Realizing Rights Group focussed on ethical globalisation initiatives, spoke of broadening the Human Rights agenda to include fair trade; the plight of children in the workplace; the empowerment of women in political and business circles and above all Action Against Poverty. Logistics and the Supply Chain figure in each of these issues.

Celebrating the fact that over 230 companies worldwide have become involved in this initiative, Mary Robinson said: “I am encouraged to see more and more companies taking a public stand on human rights. This is yet another sign that human rights are becoming part of the mainstream business agenda.” (more…)

The great Brasilian photographer, Sebastiao Salgado, compiled a book of photographs featuring workers all over the world – Trabajadores. Vivid images of thousands of unskilled workers clambering up the side of an open mine, others tethering flimsy bamboo scaffolding to the sides of iconic skyscrapers and chain gangs moving materials by hand bring home an image of people as a dispensible resource.

Low pay, poor conditions, antique equipment all conspire to hold productivity in a time warp in a misguided notion that a swarm of unskilled labour is a cheaper route to project completion. At root, the quick buck versus sustainable growth debate is all about skills … (more…)

During the early 1980s as unemployment in the Coal fields and Steel towns of the UK grew, many miners and steelworkers ploughed redundancy money into small businesses such as taxis and hairdressing salons. It was enterprising – to a point – but made little contribution to the need for sustainable growth fuelled by innovative and productive SMEs.

Then, as now, it begs the question whether everyone is capable of being an entrepreneur. Often, this laudable mantra serves to fragment increasingly scarce credit facilities at the expense of loans to fewer, better quality business models. As the current recession deepens the impact of starving SMEs of much needed finance has strong parallels with the impact of microcredit and developing economies where rickshaws and kiosks proliferate when SMEs are the real route to sustainable growth.  (more…)

Professor Martin Christopher’s observation that supply chains compete not companies carries greater significance in the economic downturn that we are moving through. Increasingly, companies are looking to cut costs and retain cash and they are trawling the globe for options. Recently, Russia, China and India were the top 3 destinations of Foreign Direct Investment by multinational retailers. What happens when the agri processing industries in these countries are dominated by the informal sector? And, as International Retailers stretch the terms of trade to pay later – what are the implications for the small scale suppliers? (more…)

Text books are fond of linear supply chains that move in a logical flow from concept to consumer; cow to fridge (dairy); from a sketch to the clothes rack (textiles) and, from a bauxite mine to the fridge (coke). Process mapping takes us from raw materials to manufacture and, through various modes of transport to the retail outlet or, even the on line store. And yet, for many products such neat moves are far from reality as each step fragments into a multiplicity of interdependent actors – formal and informal. Take traditional carpets or rugs – from loom to room.

Carpet weaving

Carpet weaving

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It has been widely reported that India will invest between $350 and $550 billion on infrastructure projects over the next 5 years to transform connectivity and provide the platform for sustainable (and inclusive) growth. That’s up to 10% of GDP per year. Currently, this is running at 4.6% and stalling as the global crisis deepens. Let’s take a closer look.

First, the facts. The Indian Government has released information on the state of play for 2007-08: 207 of 516 projects of Rs 100 crore ($20 million) or more each are runnning behind schedule or face delays; 105 of 181 Highway projects are running late and a further 346 of 909 infrastructure projects valued at Rs 418,567 crore ($85 billion) are behind schedule. There are cost overuns totalling an estimated $5 billion on over 13% of these projects. And finally,  K.H. Muniyappa, Minister of State for Road Transport and Highways, has confirmed that of 2885 kms of roads planned for 2007-08 only 114 kms have been completed. That’s 4% completion. By the way, over 130k people died on Indian roads last year and that is 60% more than China – with 4 x the number of cars. The World Bank has expressed concerns that their own investments are way behind schedule. What now? Is jugaad enough? (more…)

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