We have moved from a three F’s crisis (Finance, Fuel and Food) that was stoking inflation to a panic that is driving a fall in prices for all three – opening up the threat of deflation. For example, in four months the price of oil has fallen $100 in four months to $50 a barrel. This is bad news for those producing countries with a high percentage of suppliers based in the local informal economy.

And yet, with population growth from 6 to 9 billion by 2050 in store, shortages will not go away. Several countries who are resource-poor are setting up deals with less developed countries to secure their long term fuel and food security. For example, African countries lack capital and technical expertise to harness natural resources and their partners in the developed world have the cash, the skills and, voracious needs. Nothing wrong in generating badly needed cash from something that you have in abundance but, how can those countries ensure that short term gain translates into long term sustainable growth?

Natural resources should trigger fundamental transformations in their economy. Logistics will play a crucial role. And yet, this is not about military logistics to sort out emergency connectivity, humanitarian logistics to enable medicine and food to reach the needy or even the Logistics of a stable economy – just yet. Can Transformational Logistics act as a catalyst for the Logistics agenda where countries trade off natural resources for short term gain? (more…)

The informal market does not lend itself to a one size fits all distribution system. On the one hand, we have the issues raised by crowded urban environments and, on the other, the issue of access to highly dispersed and remote rural communities. The cost of reaching each consumer varies greatly and this is where the field marketing and neighbourhood based sales initiatives covered above can be so successful.  

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Imagine that you are a farmer with rain fed fields in the middle of a dry spell. You would value information on the weather but can rely on no more than intuition. ITC, one of India’s leading groups with a market capitalisation of $4 billion decided to tackle this with technology.

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