June 2010


For many, Logistics has been the Cinderella of the Business World; far too often seen as no more than a support function for sales, marketing and production. This view has been transformed with technology and, globalisation. As Martin Christopher makes plain, supply chains compete not companies and this is an indication of the importance of the end-to-end integration of ever better, cheaper and faster flows of materials, information and cash beyond any single firm.

The Logistics and Supply Chain industry is a broadly based sector with widely fluctuating levels of investment, technology and, performance in vastly contrasting markets that are developed, developing or growing at high speed like Brazil, Russia, India and China; then, beyond commercial markets dealing in profits or more inclusive added value there are humanitarian focussed supply chains dealing in lives saved.

On December 26th 2004 an earthquake, measuring 9.2 on the Richter scale, struck 240 kms off the coast of Indonesia triggered a tsunami and waves of up to 30 metres devastated over 800 kms of coastline around the Indian Ocean. Over 230,000 people were reported dead or missing; over 500,000 were displaced and over $500 million was raised to deal with the Emergency and, build back better. In 2005, another earthquake in Pakistan wrecked an already fragile economy. An estimated 86,000 died and 33,000 buildings collapsed leaving over 4 million homeless. In Sichuan, China in 2008 another earthquake collapsed over 5 million buildings and wrecked 53,000 kms of roads and 48,000 fresh water pipes. Over 90,000 people died and over 5 million people were left homeless. And in Myanmar in the same year a cyclone that was forecast by an agency that had been set up post tsunami led to many thousands of lives that could have been saved – had the military Junta allowed Humanitarian agencies to help out. And this year we have seen an earth quake in Haiti and another in Chile that have devastated (see elsewhere on this Blog) the local economy. We can add another set of grimmer tales from war zones where all types of connectivity are ruptured and vital supplies of food and medicine are unable to reach those who need them most – without the aid of Humanitarian agencies and the logistics skills that enable them to respond to an emergency and move in to pick up the pieces.

Humanitarian Logistics is not measured by better, cheaper and faster routes to market for all manner of packaged and industrial goods; it is measured in lives saved and, increasingly, the ability to get a ravaged and dislocated economy back on its feet fast. No two emergencies are alike. For example, Afghanistan is not Iraq. Where Iraq was a modern society with significant urbanisation and a centralised state that could be reconstructed; Afghanistan had few such building blocks in place. In the same way, Chile has been a fully functioning economy for years before the earthquake struck whereas the task for the Humanitarian effort in Haiti was much more than getting the economy back on its feet. As Paul Collier pointed out – Haiti has never been on its feet in the first place. These factors are understood way before any disaster hits. Does this guide our actions and make our response any more effective and efficient?  (more…)

Fields, Factories and Workshops (1899) was written by the Anarchist Prince, Peter Kropotkin but it was not written for an exclusively anarchist audience. Made up of a series of articles, he explores alternatives to the crowded cities; the sweatshops and dark satanic mills of his day. He offers ways in which industry can combine with agriculture and, how the informal economy – characterised as choosing to earn money on one side of a bar instead of spending it on the other – is entirely the creation of fiscal policy and not a moral issue. Many of the ideas that are developed strike a chord today with population growing from 6 to 9 billion by 2050 and 75 per cent of this number living in urban space. This demographic explosion, the accelerated depletion of scarce resources and, environmental impacts is forcing an examination of assumptions that were shaped by the developed world. Above all, the global push for better, cheaper and faster supply chains is challenged by notions of inclusivity and, human values over value and the race to the bottom price.

Here we go again ...

Globalisation may have connected producers with consumers but, value addition usually goes to the most powerful link in the chain such as the major International Retailers; High Street brands or, even local agents aggregating capacity and pricing to producers and farmers upstream. These small scale actors do not have the know how, the technology or the market access that can secure their position. Few of these suppliers have any notion of the full price that consumers are paying in the developed world and, few consumers have any notion of the conditions under which their purchases are sourced and produced.

Malcolm Harper’s Inclusive Value Chains (2009) uses a series of case studies to highlight the lack of an effective interface between the informal and the formal economies – hotels lacking fresh fruit whilst street hawkers offer it in abundance outside – and, a number of illustrations of how conventional supply chain thinking falls short. A case study from ITC highlights a project integrating small farmers in Punjab with Spencers – a new format retailer. Another, illustrates how the traditional company Namdharis with its proud philanthropic traditions has developed its seed production business to link small farmers in Karnataka to markets abroad. Other inclusive value chains or streams are developed for fisheries, honey, coffee and poultry. (more…)

All too often, people use the term CSR as if it is a fresh perspective. Worse, it is used as a branding initiative that creates an image of commitment to the wider public good but has no real impact upon the fundamentals in the business or, the wider marketplace. This is the thinking that considers branding a matter of brochureware rather than delivering the promise. It has to be more than this and, history illustrates the point. CSR has strong historical roots with companies like Wedgwood and their line of pottery to promote the slavery movement in the early 19th century a fine example. Wedgwood was not alone.

Am I not a man and a brother

Seebohm Rowntree, a member of the eponymous chocolate manufacturing company from York, played a significant role in thinking on social welfare and the poor. His work on the founding deed of the Joseph Rowntree Trust – which is one of the great documents of the 20th century – did much to break the comforting nostrum that the poor were responsible for their own plight. You know, build a factory town, pit or steelworks; move on several generations then, shut it and expect those trapped in homes with no value and strong local family ties to get on their bike and find jobs elsewhere. This scenario strikes a chord in the contemporary world as Corporations move their facilities and sourcing from location to another in a never ending race to the bottom price. (more…)