CII Logistics Summit, October 2009, Chennai

In a speech on the Skills Gap and Manpower training at the CII Logistics Summit 2009, Rob Bell spoke of the elephant in the room. He was referring to the tendency to ignore those who live and work in the informal or shadow market when all of the great plans for India are being discussed. All talk of India shining and the demographic dividend must address those at the bottom of the pyramid and, the skills deficit.

Over 350 delegates heard him speak of the skills gap in India. “By 2022, India will need over 500 million skilled workers but, current skills training capacity is no more than an estimated 3 million trainees per year. This is a major skills gap in the Young Republic and a revolution in thinking and practice is needed to close the gap.”

Let's not forget the inclusive value chain

Let's not forget the inclusive value chain

Using examples from all sectors of Indian industry, he highlighted the massive infrastructure and sector based investments that are planned over the next 15 years. From Ports to Warehousing, the Logistics industry is being transformed. However, without the skills to deliver – these plans will stall.

Turning to the need to improve performance, he highlighted that over 90% of workers have jobs in the unregulated informal sector such as Agriculture and, the sweatshops of places like Dharavi in Mumbai. After all, the much celebrated IT success still employs no more a couple of million people – however skilled they may be.

In an appeal to fresh practice from India rather than boiler-plated best practice from the developed world, he turned to the positives coming out of the informal sector. “Dharavi may be a slum but it still generates over $1 billion of merchandise per year. It is a fine example of innovation and is the capital of Jugaad – that expressive Hindi word that epitomises the can-do mentality”. He developed this example with illustrations of re-cycling that set the scene for other thoughts on the green supply chain covered later by Professor Lenny Koh of the University of Sheffield and an acknowledged thought leader in this area.

Using examples of Bamboo bikes and shelf ready packaging; simulators to speed up induction and industry training he challenged delegates to think harder about how to use jugaad to re-think skills and performance improvement. And with photographs of real conditions in warehouses and on the street, he urged delegates to look around and see where improvements can be made in how things are done – now. After all, innovation is not just about blue-sky thinking. It is often most effective when it is used to simplify, combine or transform what is done now. 

Using photographs from all over India to emphasise the point,  he highlighted the need to beware the brake-like effect of asymetrical investments. That is, the emphasis on big ticket projects whilst forgetting the majority world or, in the term coined by CK Prahlahad, the bottom of the pyramid.

Indian solutions have to be affordable. He told the story of a consultancy pitching for a Cold Chain Project with a hugely expensive Plan based on best practice from abroad. He described the scene of an Indian executive opting for an alternative made up – like lego blocks – of reefer (refridgerated) containers plugged into a mobile generator. Again, jugaad and a call to what Kishore Biyani has called Indianess.

Looking round the room he counted the number of women. In our search for innovation and breakthrough thinking – why is it that so few women are in the business of logistics? After all, their experience in multi-tasking is legion and, as the micro-finance industry demonstrates, there is a track record that logistics needs to call upon.

Logistics has an image problem. To many it is far from the rocket science of the Conference circuit. Characterised by trucks, boxes and rubber stamps the industry needs to wake people up to the possibilities. Logistics is a global industry relevant to all sectors. It is THE place for those with a can-do mentality and problem solvers will thrive. We need to get this message across. Fast.    

Logistics calls upon the jugaad that India has in abundance. And yet, for each ounce of jugaad there is a ton of chalta hai or, a shrug of the shoulders. Take the plight of the truck driver. No amount of jugaad will deal with lousy stop overs; poor quality food and corruption at State borders. It is time to deal with truck driver welfare as part of the end-to-end supply chain cost issue.

Reality is where Transformational Logistics starts. All over the developed and emerging world, people are encouraged to chase degrees and, those who do well in vocational training do so to move away. Surely it is time to stay close to the issues and grow a vocational strata within business that can deal with problems and not – as one practitioner puts it – use what they have learned to put band aids over the consequences of bad decisions. Jugaad may be a rallying cry but only good management will yield sustainable results. A patched up car remains a patched up car.

Finally, Rob Bell highlighted the massive opportunity that India has to become the home of a Logistics approach that can transform outcomes in the informal world. He spoke of inclusive value chains and, ways in which the Logistics industry can embrace the realities of the informal world. After all, few industries can operate without either staff that live their or, cost effective suppliers that thrive there. More must be done to connect smaller producers to modern markets not, as Malcolm Harper has said, “as an act of charity or corporate social responsibility but because their inclusion is profitable for all parties, including the producers themselves”.*

He urged the delegates to visit this Blog and support efforts to ensure that Transformational Logistics takes its place as a vital part of the Logistics lexicon and, develops as a set of techniques that can emerge from an Indian reality to play a role on the world logistics stage. After all, India’s demographic dividend can be the platform for India to become a global training hub. Think of the remittances!

The CII Logistics Group – and Sridhar and Kumar in particular – are to be congratulated for providing this opportunity to introduce Transformational Logistics to the Indian scene. So too, the University of Sheffield Management School for launching T L as a research topic for students. And he suggested that a T L seminar series be launched to open up the debate. Maybe that elephant in the room will turn out to be Ganesh and the spirit of enterprise after all.

* Malcolm Harper, Inclusive Value Chains in India (2009)

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11 Responses to CII Logistics Summit, October 2009, Chennai

  1. Khasim Abdul Mateen says:

    Dear Rob,
    Greetings,

    This is Khasim – Student,CII and Consultant, Caterpillar. We met during the Logistics Conference yesterday. Your study on the skills gap particularly in the Indian Industry is simply wonderful. The presentation was very good.
    Liked the usage of the word ‘jugaad’ 😉

    Again, you did not let me sleep during your lecture!

    Hope we keep in touch !
    Have a nice evening,

    Salutations,
    Khasim

  2. robjbell says:

    Thanks for this. There has been quite a reaction to the session. Many delegates have written to me directly on various subjects raised. For example,
    1. Funding of training. How can this be improved? My experience with AMET and the Maritime sector is one possibility. Students complete their course and, a very high percentage are offered contracts of employment. This is a major incentive to make the investment in the first place. Worth looking at for other sectors. Also, is there any scope to set up a Training Fund that can be accessed by individuals just like small businesses can access loans. The fact is that this would have to be open to the fact that when needed the candidate would not have assets to back the loan. But then again, this is what micro finance makes possible.

    2. Course content. This is a major issue. How can the course on offer make sure that people are job ready? My view is that we should learn more from sports like sailing. There is no point in becoming a desk bound yachtsman! You have to do things for boats to move. Same with military manoeuvres. Have we done enough to explore skills training techniques? In particualr, for those who have poor literacy. More should be done to look at the way teachers impart their know how. More graphics; more on site examples and, in an age of digital photography and mobile phones more that can be accessed and easily understood. For example, we have used YouTube to make courses available in Portugal.

    Over the next few days I will add in more comments from those that have written to me directly.

  3. robjbell says:

    One delegate observed that many companies have outsourced parts of their labour force to “specialist” companies…

    “Training is a big issue for us. Skilled labour is hard to come by. Wages on entry level are still very low. We changed to outsourced temp labour for about 10% of staff and am now paying for it through poor quality, error rates and higher churn. Much work is needed.”

    Anybody else with thoughts on this aspect?

  4. robjbell says:

    One delegate has written to observe that where there is poor compliance in, for example, warehouses; the issue is not simply that Indians don’t like procedure…

    “Sure, we Indians are always looking for better ways of doing things. But not everyone is that focussed on improvement. This lack of compliance can come as a byproduct of our mgmt defining processes at 40000 ft in ivory towers not considering or ever having worked at 4 ft. Hence the improvising or non compliance creeps in. Our rote system of education and our lack of technical or practical training compounds this weakness. when we have weak compliance we have higher failure or defect opportunities which we are then good at mopping the mess we caused in the first place. Keeps a lot of middle management employed.

    We are poor at root cause analysis and stick a few band aids and treat the symptoms which then does not address the core issues. Our incompetence then looks like competence as we are good at managing these dynamics.”

    A useful insight. I would agree – there are exceptions – Retail is experiencing explosive growth and so problems emerge because of lack of time to consolidate understanding – but, it is not always that Indians and procedure will never work. Take a walk round a L&T factory; speak to Nokia; have a look at what is happening at Jet Airways and companies like DHL. Airtel are working hard to make things happen with a culture of outsourcing.

  5. robjbell says:

    Another delegate linked Rob Bell and Anshuman Singh’s presentations together in their emphasis on jugaad…

    “More than the indianness Anshuman referred to and the jugaad you referred to is the chalta hai or its okay attitude that creates inefficiency through delayed outcomes. Many companies are suffering from this attitude in making things happen.”

  6. robjbell says:

    Several delegates came up to me at the Conference and, have written to me since on the subject of Trucks.

    Clearly, there is a major problem with truck drivers in India. In arecent book on Aids it has been observed that 3-7% of truck drivers in India have Aids, as compared to the National average of 0.43% among adult males and yet HIV was highest amongst women whose spouses were employed in the transport industry. (See: Aman Sethi, The last of the ustaads).

    I have started correspondence with several people involved in this industry and we are exploring the possibility of a Research project on the Trucking industry from welfare to economics. Any thoughts? Anybody interested in being part of a Case Study?

  7. robjbell says:

    Many people on the day and over 50 e mails since have asked me about T L. We are exploring the possibility of offering a seminar series on T L in India and elsewhere. Any thoughts?

  8. robjbell says:

    Corruption. Several e mails highlighted the need to deal with this in various contexts. Again the Truck driver’s plight crossing State borders came into focus. And, all over the small business community a disincentive to train was observed.

    “Imagine waht could happen if we invested what is spent on bribes into people skills!!!” said one.

  9. robjbell says:

    During the presentation I referred to the lack of focus on Infrastructure as a skills set. I did mention that, yet again, the Adani Group are doing terrific work in this area. However, more needs to be done to create the skills that are needed for this vital sector to deliver. For example,

    1. Infrastructure spend. Take the $1.5 trillion spend over the next 15 years.
    2. Skills Gap. Highlight the equipment that will be needed and, the processes that will support them. Identify the skilled labour required.
    3. Current skills inventory. What does this look like in key areas?

    This analysis will highlight priorities graphically.

  10. robjbell says:

    Many delegates asked about the photos. Yes! I did take them all myself. A small point. Why do people giving powerpoint presentations use photos from real life situations so rarely? Especially in India.

  11. robjbell says:

    Inclusive Value Chains. A couple of delegates have asked about this. Malcolm Harper’s book is a terrific place to start. You can buy this from World Scientific.

    Inclusive Value Chains in India, linking the smallest producres to Modern Markets.

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