Earlier today, Rob Bell gave a talk on the International Logistics scene to Faculty and MBA students at AMET  University and, moved to a discussion of Transformational Logistics and the Indian logistics and supply chain landscape.

The session opened with a review of the evolution of supply chains from the spice routes to today – via Napoleons military logistics; cowboys losing out to the railroad in the Wild West of 19th century America and on to containerisation revolution of the 1950’s. A key shift has been the integration of markets from globalisation and, the specialisation of the logistics function enabled by technology supporting this “new rocket science”. The segmentation of products (and ways to deliver them to the consumer) into Agile (those with high variability) and Lean (you can have any car as long as its black said Henry Ford) products was covered and the role of logistics as a differentiator was highlighted. As Professor Martin Christopher makes plain: “supply chains compete, not companies.” Logistics is part of any companies competitive edge.

The last mile counts ...

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Nobel Laureate Amartya Sen has said of India that there are some places resembling Sub Saharan Africa and others California. Bangalore is one of the places he had in mind. Home of major Multi Nationals and leading Indian Corporations like Infosys, the place has the feel of a high tech hub. Some would say that this is at the expense of Indian authenticity and others, are disappointed that Bangalore is busy losing its Indian heritage in a rush to be the modern showcase.

Recently, there has been increasing coverage of the decline of once legendary markets like Jayanagar, Russell and Malleswaram which still dot the city but only as poor remnants of what they once were. “Our markets were wonderful places with beautiful buildings. Now, they have been reduced to garbage dumps. In developed countries, markets are tourists attractions but we have let them be controlled by the mafia and are allowing valuable property in prime locations to be rented out for paltry sums. The BBMP (Greater Bangalore Municipal Corporation) should instead treat the markets as valuable real estate and as the city’s pride,” says ABIDe member, R.K Misra. ABIDe is an initiative to address the urban chaos of Bengaluru.

KR market Bangalore

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The T L Blog is delighted to introduce a new contributor – Tielman Nieuwoudt. Based in Johannesburg and for several years working out of Vietnam, Tielman brings a huge level of experience in frontier markets to the TL table. This and other posts to follow have featured on the Supply Chain Lab Blog previously. And so to Africa …

With low projected growth in the US and EU, and the realization that the BRIC countries won’t be able to do it all on their own, there is renewed interested in Africa. It is a continent with enormous potential with some of the fastest growing economies on the planet. However, for any company new to the African continent, there are a number of challenges to consider.

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Aakash is a hindi word meaning “sky or “ether”. It is a word that will become better known. Now, it is the brand name for an Android-based tablet computer produced by the British company Datawind and manufactured by the India based company Quad.

Kalra, who heads a team at the Rajasthan Indian Institute of Technology sums up the potential. “Inside ten years we expect that everyone will have one. There will be children learning, farmers checking prices, pregnant women getting medical assistance – all through the Aakash.”

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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

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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…

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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?

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