In a speech on the Skills Gap and Manpower training at the CII Logistics Summit 2009, Rob Bell spoke of the elephant in the room. He was referring to the tendency to ignore those who live and work in the informal or shadow market when all of the great plans for India are being discussed. All talk of India shining and the demographic dividend must address those at the bottom of the pyramid and, the skills deficit.

Over 350 delegates heard him speak of the skills gap in India. “By 2022, India will need over 500 million skilled workers but, current skills training capacity is no more than an estimated 3 million trainees per year. This is a major skills gap in the Young Republic and a revolution in thinking and practice is needed to close the gap.”

Let's not forget the inclusive value chain

Let's not forget the inclusive value chain

Using examples from all sectors of Indian industry, he highlighted the massive infrastructure and sector based investments that are planned over the next 15 years. From Ports to Warehousing, the Logistics industry is being transformed. However, without the skills to deliver – these plans will stall.

Turning to the need to improve performance, he highlighted that over 90% of workers have jobs in the unregulated informal sector such as Agriculture and, the sweatshops of places like Dharavi in Mumbai. After all, the much celebrated IT success still employs no more a couple of million people – however skilled they may be.

In an appeal to fresh practice from India rather than boiler-plated best practice from the developed world, he turned to the positives coming out of the informal sector. “Dharavi may be a slum but it still generates over $1 billion of merchandise per year. It is a fine example of innovation and is the capital of Jugaad – that expressive Hindi word that epitomises the can-do mentality”. He developed this example with illustrations of re-cycling that set the scene for other thoughts on the green supply chain covered later by Professor Lenny Koh of the University of Sheffield and an acknowledged thought leader in this area.

Using examples of Bamboo bikes and shelf ready packaging; simulators to speed up induction and industry training he challenged delegates to think harder about how to use jugaad to re-think skills and performance improvement. And with photographs of real conditions in warehouses and on the street, he urged delegates to look around and see where improvements can be made in how things are done – now. After all, innovation is not just about blue-sky thinking. It is often most effective when it is used to simplify, combine or transform what is done now. 

Using photographs from all over India to emphasise the point,  he highlighted the need to beware the brake-like effect of asymetrical investments. That is, the emphasis on big ticket projects whilst forgetting the majority world or, in the term coined by CK Prahlahad, the bottom of the pyramid.

Indian solutions have to be affordable. He told the story of a consultancy pitching for a Cold Chain Project with a hugely expensive Plan based on best practice from abroad. He described the scene of an Indian executive opting for an alternative made up – like lego blocks – of reefer (refridgerated) containers plugged into a mobile generator. Again, jugaad and a call to what Kishore Biyani has called Indianess.

Looking round the room he counted the number of women. In our search for innovation and breakthrough thinking – why is it that so few women are in the business of logistics? After all, their experience in multi-tasking is legion and, as the micro-finance industry demonstrates, there is a track record that logistics needs to call upon.

Logistics has an image problem. To many it is far from the rocket science of the Conference circuit. Characterised by trucks, boxes and rubber stamps the industry needs to wake people up to the possibilities. Logistics is a global industry relevant to all sectors. It is THE place for those with a can-do mentality and problem solvers will thrive. We need to get this message across. Fast.    

Logistics calls upon the jugaad that India has in abundance. And yet, for each ounce of jugaad there is a ton of chalta hai or, a shrug of the shoulders. Take the plight of the truck driver. No amount of jugaad will deal with lousy stop overs; poor quality food and corruption at State borders. It is time to deal with truck driver welfare as part of the end-to-end supply chain cost issue.

Reality is where Transformational Logistics starts. All over the developed and emerging world, people are encouraged to chase degrees and, those who do well in vocational training do so to move away. Surely it is time to stay close to the issues and grow a vocational strata within business that can deal with problems and not – as one practitioner puts it – use what they have learned to put band aids over the consequences of bad decisions. Jugaad may be a rallying cry but only good management will yield sustainable results. A patched up car remains a patched up car.

Finally, Rob Bell highlighted the massive opportunity that India has to become the home of a Logistics approach that can transform outcomes in the informal world. He spoke of inclusive value chains and, ways in which the Logistics industry can embrace the realities of the informal world. After all, few industries can operate without either staff that live their or, cost effective suppliers that thrive there. More must be done to connect smaller producers to modern markets not, as Malcolm Harper has said, “as an act of charity or corporate social responsibility but because their inclusion is profitable for all parties, including the producers themselves”.*

He urged the delegates to visit this Blog and support efforts to ensure that Transformational Logistics takes its place as a vital part of the Logistics lexicon and, develops as a set of techniques that can emerge from an Indian reality to play a role on the world logistics stage. After all, India’s demographic dividend can be the platform for India to become a global training hub. Think of the remittances!

The CII Logistics Group – and Sridhar and Kumar in particular – are to be congratulated for providing this opportunity to introduce Transformational Logistics to the Indian scene. So too, the University of Sheffield Management School for launching T L as a research topic for students. And he suggested that a T L seminar series be launched to open up the debate. Maybe that elephant in the room will turn out to be Ganesh and the spirit of enterprise after all.

* Malcolm Harper, Inclusive Value Chains in India (2009)