Transforming the eco-system of logistics

Ever since 2006 on India’s National Day, the 26th January, the Future Group’s Big Bazaar superstores hold the Big Sale – Sabe Saste Din – and thousands of items are priced, in the words of one advert, as “cashews for peanuts”. This year the sale lasts for a few days but the first year saw crowds that were unprecedented and stores in Kolkata were closed by mid-day because of fears for public safety. Big Bazaar were prepared for this – having studied crowd control at religious festivals. However, not all religious festivals run smoothly.

Sabarimla is located in a remote area of Kerala, India, and characterised by dense forest and difficult terrain infested with wild animals. Sabarimla is home to the deity Kantamala Jyoti, “the sacred light of the magnetic hills”. Back in the 1950’s a trickle of pilgrims would make the treacherous 65 kms trek barefoot over seven seven steep hills to witness the shrine; “thorns and sharp stones are like pads on our feet”. This year, millions made the journey and 102 pilgrims were crushed to death as the hopelessly inadequate infrastructure collapsed.

Sabarimala lacks basic amenities. Devotees stand in queues for 15 to 20 hours with few facilities for food and basic sanitation. A major problem is controlling the flow of pilgrims and the 120 died at Pulmedu – one of the principal routes to the shrine – where three policemen were on duty to deal with the flow of over 200,000 pilgrims. A sudden surge could not be stopped and, the irony is that many officials put this down to the suffering implicit in the act of pilgrimage itself and use this as an excuse for inertia – which is not a million miles different from market fundamentalists saying that market forces will find their own equilibrium through the eternally good offices of the invisible hand.

Let’s move to China. Every February, over 200 million migrant workers take the journey home for the Spring Festival. This year, the travel rush is expected to record 2.56 billion passenger trips throughout China. Every year the legions of men and women who work the factories that power unprecedented growth in the factories of Shanghai; the electronics factories of Shenzen and the mines of Henan briefly find themselves in the national spotlight. Hundreds of extra trains are commissioned to navigate the snow bound tracks to take people home. Restaurants, factories and all kinds of business shut down bringing the entire country to a week long standstill.

Working away is tough and the true costs are rarely calculated but, for the workers, it amounts to the stark choice between saving about $50 a month on the farm or, saving over $250 per month where the action is. This is not the place to debate this complex topic but, suffice it to say that like the temple throngs and global emergencies there is much to learn from these sudden surges of activity that test even the best logistics network. Further, as the Chinese government is finding, an annual swarm could become the source of serious unrest as comparisons are made and the inequities of a system that dis-qualifies migrants from health and social care in their temporary workplaces hit home. This is the hukou system and, as an editorial published jointly in 12 national papers last year put it: “bad policies unsuitable to these times enrage the people”.

Humanitarian Logistics encounter similar sudden surges as in China and religious festivals such as Sabarimala and examples abound from Chile to Haiti; Sichuan to Niger; Pakistan to Queensland and many more. Some of these locations are well prepared and have the capacity to deal with issues and others do not have the ability to get back on their feet at all. As Paul Collier, the Oxford Economist made clear with Haiti, some places were not on their feet in the first place. He went on to highlight the zoo of NGOs that complicate rather than solve the problems on the ground.

In India alone, there are over 2 million NGOs and, according to a study published by Bain and Co (2010) on the status of Indian philanthropy, fewer than 500 are judged to have the scale to be effective (more than $100,000 in income). One NGO leader observed that the biggest issue is that NGOs are set up on an ad hoc basis to help address a specific issue in a specific location. Few attempts are made to benchmark experience elsewhere and, still fewer use a model based approach – pilot testing a set of assumptions and then rolling this out elsewhere as needed. For example, setting up a model village to act as the nerve centre for a defined area. This “hub” would have the facilities (clinic; school; power generator; resource centre – aka library) and the resources (aggregation, finance and market access skills) to serve a wider radius. It may even develop into a town over time. This would be the way forward to act as a catalyst for investment, skills and impact. Surely, there is an opening for the resources to be given to the Humanitarian effort to work on this for the rehabilitation phase post emergency.  If not, why not.

Which brings us back to logistics and supply chain thinking and practice in fast growth and frontier – notice the shift from notions of emerging and developing – markets. As T L amply demonstrates, there is a real need to develop fresh perspectives relevant to these asymmetrical supply chains and, an opportunity to build more inclusive approaches. The numbers are huge – the Pilgrimage at Sabarimala grossed over £250 million this season. And yet, it is remarkable how little we have collated and learned from the catalogue of disasters that regularly whip up a donating frenzy on our television screens. Humanitarian Logistics is Cinderella of logistics and supply chain research and this undermines the ability to learn from experience and improve outcomes next time. In fact, it guarantees the persistence of the ineffective and inefficient zoo of NGOs that one day may result in a tragic backlash from the public as waste and inefficiency checks their generosity in its tracks. Humanitarian Logistics has to be given the resources to channel learnings into practice; deal with contingencies rather than labyrinthine procedures.

In all of this there is an image that persists – natures genius has many examples of how complex matters are broken down into manageable scale. Peter Miller’s book Swarm delves into the workings of flocks, herds schools and colonies revealing how collective intelligence in the animal world can teach us humans to organise, systematise and problem-solve more effectively and efficiently. He looks at ants and their ability to segment the work from foraging to preparing food for the colony. Ants don’t remember much beyond 10 seconds and, as individuals they don’t care whether they succeed – in fact, only one in five ants accomplishes what it sets out to do – but, as a group they function and they prosper. Miller turns to honeybees – we have looked at this elsewhere on the T L Blog – termites and swarms of birds. And if you think this is strange – try walking through Dharavi in Mumbai for a stroll. Also, he focuses on locusts and how swarms can turn nasty – which, this week, offers chilling insights into street protests turning ugly from Tunisia to Egypt and beyond.

Miller uses the example from the Haj, the annual pilgrimage to Mecca, where recent years have witnessed serious crowd control issues that have resulted in hundreds crushed to death as bottlenecks turn into death traps. In search of an answer to the deaths of over 250 pilgrims in 2006, the Saudis enlisted the help of Dirk Helbing of the Dresden University of Technology; a physicist turned sociologist who was doing traffic science and crowd research at the time. Helbing  used parallels between crowd movement and the behaviour of particles or fluids. This included work on molecular dynamics, kinetic gas theory, fluid dynamics and granular flows and supported computer based models to create simulations of the ways pedestrians spontaneously form lanes or, traffic jams suddenly appear on open motorways for no apparent reason.

His conclusions classify crowds according to density – at low densities with little interaction, crowds are in a kind of gaseous state; as more people join people obstruct each other and we shift to a fluid state and, as density intensifies and people start to push each other the state becomes granular – grains of sand moving through the middle of the hourglass. Then, he turned to the video footage and found that there was more to consider. As the pace slowed down more and more people started to look for the gaps – follow the ambulance through the traffic jam and this caused multiple bottlenecks to break out. Helbing calls this stop and go waves and sees the solutions in breaking them up as fast as possible. In logistics terms this is the bull whip effect and it is likely to grow as supply chains move to an asymmetrical state with low tech and traditional suppliers meeting more high tech and modern players further downstream.

The sudden swarms of pilgrims, migrant workers and examples from nature resemble the workings of an eco-system rather than a well-honed assembly line or, one of those supply chains that connect Big Food or Pharma to Big Retail in the developed world. Supply chains are not wonderfully symmetrical from end-to-end and, as an eco system, they incorporate many of the characteristics of all of the examples raised here. This is the way that innovation in logistics and supply chain thinking and practice has to develop. It is about context and contingencies not just certainties drawn from someplace else.

To use a phrase from President Obama’s recent National Address – a Logistics and Supply Chain “sputnik moment” has arrived. It is no longer enough to perfect the supply chains of the developed world. It is time to give real thought and resources to the development of ideas, skills and delivery mechanisms fit for purpose in this far more complex combination of increasingly crowded urban agglomerations, remote rural areas and markets dislocated or destroyed by man-made or natural disasters.

Le Corbusier once remarked that cities have been designed down the ages by the zig zag of donkeys. Our inability to deal with the real logistics agenda posed by the Majority World suggests that we are all too often led by them.

Article by: Rob Bell, Transformational Logistics Blog

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