The World Bank LPI (Logistics Performance Index) 2010 has just been released. This snapshot of selected performance indicators in nearly 130 countries demonstrates clearly the correlation between logistics performance and sustainable economic growth. This year, the analysis of this bi-annual Report has been expanded to include information on the time, cost and reliability of supply chains. Detailing several major advances since 2007 in places like Brasil, Columbia and Tunisia the report highlights clear potential for low and middle income countries to boost trade performance by 15% through faster, cheaper and more reliable trade logistics – if the analysis is acted upon. Here, we build from the LPI 2010 Report to explore potential to develop a Transformational Logistics perspective to sharpen the analysis of logistics relevant to the emerging and developing world.

The missing link?

 

 

History is written by the winners and, similarly, many Retail and Logistics textbooks are written from the perspective of developed economies and, as the LPI highlights, key segments of the global logistics industry are dominated by no more than 25 large corporations – especially in the maritime, port and air freight segments. This contrasts starkly with the fact that 85% of jobs in the USA and 65% in the EU are generated by small to medium sized companies and in the majority world – that is 75% of world population – few jobs are even formal or covered by regulatory and welfare schemes. Few workplaces are even covered by legal title and health and safety is a pipedream. Conventional Logistics analysis just does not grasp the essential asymmetrical (informal / formal) nature of global sourcing, value addition, distribution and points of purchase. We see Transformational Logistics (and retail) being a better way to describe reality in the emerging and developing world. (more…)

We have touched on the MDGs and asked the question whether enough is done to integrate Logistics into the effort. The World Bank’s Logistics Performance Index has many of the answers and the LPI framework is a clear indication that improving logistics performance has become an important development policy objective and, the LPI is providing a valuable benchmark from which priorities can be agreed and delivered upon. See: Connecting to Compete: Trade Logistics in the Global Economy (2007). (more…)

 

Emile Zola’s novel Au Bonheur Des Dames (The Ladies Paradise) tells the tale of Denise Baudu, a simple girl from the Provinces who moves to late 19th century Paris in search of a better life. This intricate tale is played out against the spectacular backdrop of the sights, smells and sounds of the modern department store. It is emblematic of the consumer culture taking shape at that time and sets strong parallels with the scene in countless big cities today.

 

 

As we look at the informal and formal markets, Zola’s classic reminds us of what it is like to be on the outside looking in. The point is this. The sheer scale of the world’s population that either get by or get on in the informal market is such that we can no longer ignore it or allow it to exist in a vacuum sealed black box. We have to make every effort to explore ways in which it can be integrated and, we have to understand that there is much to learn from the innovative ways of doing business found on the wrong side of the tracks. Above all, logistics can play a major role in transforming the nature of integration between the two.

 

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