A busy weekend listening to the BBC World Service; reaction to the Post below; skype calls and dialogue about the Logistics dimension to this Haiti tragedy that is taking death to industrial proportions. The whole disaster is exposing a raw debate on how to re-invent Haiti – the need to clear away the debris and build the logistics that can feed the mess with immediate and then longer term solutions. And yet, as Professor Paul Collier made it plain on the BBC: “this is not about getting Haiti back on its feet. It has never been on its feet. The place needs a total transformation”. These notes build on the various strands of information and insight to explore what can and should happen in places like Haiti going forward. It leaves the here and now as the preside of response teams and seeks to dig deeper to root causes and, a framework for a logistics transformation that is crucial to a sustainable future.
I listened to the World Service. A woman screeched: “This country has no President; no Government; no Magistrates to deal with looters; no Police force to bring them to justice; no mayor to coordinate the answers. I have no husband; no children; no home; no food; no water … no hope.” Meanwhile, we hear that sixty miles away from the disaster cruise liners are docking and VIPs land to survey the scene for another photo shoot and soundbite. Up the shattered road at the airport, planes with vital supplies are turned away – because the airstrip is too congested. Three planes a day landed before the earthquake; 65 yesterday; 100 soon. The focus turns to solving the airport bottleneck only to find that the “pipe” (read supply chain for a nation) is not fit for purpose further down the line.
As Michael Keizer emphasises on his Blog (see previous post) – we have to be sure that what is sent is needed. Bill Clinton on the BBC tonight pleaded for people to send money not goods: “it will just clog up the place even more”. The governments of the tsunami are still sorting out the issue of things that were sent that did not meet the need. We have to be sure that what we send doesn’t become a constraint. This is the clue I was looking for. Eliyahu Goldratt wrote a book called the Goal (1984).
The Goal is all about the theory of constraints and, as he puts it succinctly: “constraints are not acts of God. There is much that we can do about them”. In brief summary, TOC is all about the constraints of: Policy and the Business Model; Resources and the physical process and, material. Read the Goal and 90% of constraints are to do with rules or red tape that is put there either for reasons that do not meet the purpose of the entire systemor, in the Case of Haiti, the livelihoods of 9 million people.
The story starts before the earthquake. As Michael Kaiser emphasises, there is a real need to prepare for potential disasters. And this means building, in logistics terms, beyond the humanitarian emergency itself. This is all about a focus on response. We need to be realistic and think harder about preconditions and the drivers of constraint that will make it easier or harder to respond.
Way back in 1906, Ardeshir Godrej – founder of the eponymous Indian Conglomerate – visited Europe to find out about safes. He looked at the market leaders Chubb and Milner and set about designing the better solution. He employed three safe breakers – professional criminals – to crack his own safe and used this feedback from reality to improve his design and manufacturing process. Fast forward to the world of logistics today.
There is a need to learn from recent events – the Tsunami and response; New Orleans and the future. This is key. At some point the question has to be asked – is it viable to re-build a wreck; especially when people have to live through the reparations. Ask the flood victims all over the world about that one. Is there a case to start from scratch and learn from, say, Brasilia; Ankara or Portland Oregan – where the downtown port was created as a Bond to sell to Real Estate and generate the money for a brand new Port further up the coast. Well, we know that there is a market for cruise liners to visit Haiti – why not build a marina and a fit for purpose Port elsewhere?
Let’s go deeper into the future. Transformational Logistics – an umbrella term for logistics in emerging and developing countries – suggests building up a toolkit that is distinct from Humanitarian Logistics in starting out BEFORE and, mapping the way OUT of a disaster. Here’s a sketch of the approach:
1. Logistics Capacity Analysis. We start with a Logistics Capacity Assessment. LCA’s exist for many countries. I have trawled a number of these for Africa. There is a need to upgrade them. For example, does every Port have a Plan B – a location identified that could be the base to build an auxiliary facility? Are we clear on the geological; meterological and demographic risks going forward? And, have we pressure tested critical infrastructure against this criteria?
The LCA addresses the need to assess what a given place; country or region has in terms of physical infrastructure. However, most LCA to date are blind on virtual options that new technologies have generated; materials handling equipment and, the human resources to make things happen.
The LCA is not about a procedure to complete an inventory of infrastructure; it should build on this to focus risk. The risk of not being able to respond to one scenario or another. The trick is having a clear set of scenarios against which a given location is tested. Maybe the LCA should become an extension to the World Banks Logistics Survey – of which this Blog has had quite a lot to say. See Posts below.
Which brings us to:
2. Skills Gap Analysis: In my day job with Archomai, we have been working on exactly this for ports and logistics facilities in several countries and for several companies. It is our belief that there is a real blind spot on vocational skills across the board.
Amidst an obsession with upper managers – witness the fear that the UK is experiencing with those bankers who will walk if they don’t get bonuses beyond the GDP of Haiti – and degrees from Institutions that champion research over teaching. We are losing the plot on common sense and the skills that can make things happen on the ground. Hence the need for a detailed Skills Gap Analysis. Here’s how: (1). Now – what is out there; (2). Next – what is needed under clearly defined conditions and, (3). what is the Need or, skills gap for each core sector.
Crucially, the SGA has to have the mandate to move beyond the industrial and policy making silos and see how all material and information flows have to come together. This should include the paperwork at borders and, these days, pays special attention to security.
How many well-worked reviews of materials flow build lean supply chains that collapse under the first security panic. With footloose Corporates prepared to move whole factories how long before an economy collapses because one security system is more – how do I say this – “onerous” than another. In others words, how can we square those who are driving better, cheaper and faster supply chains with those who have to ensure that it – and us – is not blown up?
The Skills Gap Analysis needs to address how to deliver sufficient skills; upgrade others and, with the Green agenda demanding to future proof our workforce – what are the industries of the future? In the case of places like Haiti; the Tsunami or New Orleans – what does the future hold in terms of jobs or the shape of urban space itself? And then, do we have the capacity in place – notice I didn’t say plan – to deliver?
3. Skills Capacity Training. This is a major concern. Have a look at all of the BRIC economies; then the Next 11 and ask yourself – how are skills being delivered. There is a massive agenda to move from the classroom and into simulation type training or, the use of the mobile and voice command for the illiterate. What can be learned from Telemedicine? What can be done to focus the constraints all along the supply chain and make these the priority for performance improvement modules. This links us back to what do we mean by performance improvement under these circumstances? Back to TOC and the need to look at the measures that will help us to a more effective; more efficient and more inclusive value chain from end-to-end.
4. Delivery. Here’s the rub. I have travelled all over the world and seen certificates thrown at skills shortages. All too frequently the solution is a road out of the place for the trained from the very place that needs the skilled worker. What can be done to address this?
More to the point, what models are we looking at to explore ways in which we can develop revolutionary and more responsive training models. Here’s a few to explore:
- Sichuan; New Oreleans; Tsunami. What have we learned? Not just about response but about their futures and how sustainability can be ensured.
- Gaza. Leave the politics out of this and explore the ways in which whole retail industries have emerged despite the blockade. The Tunnels have now reached a scale that vehicles are being moved through them. Admire the ingenuity; the can do mentality and ask – what can we learn? ALL of the former Soviet block offer a fund of learnings when their entire supply chain system collapsed – apart from the illegal ones that thrived.
- Retailers. All over t he world, Retailers grapple with seasonality and peaks and troughs of footfall. The best example I know is the Future Group and their sale event around the 26th January. They learn from Temple crowds during religious festivals. This is innovative.
- Drugs trade. How does the illigitimate industry actually work? This is a taboo subject but it is one that will tell us a lot about how to respind to a bust operation. Surely we have noticed how responsive the illegal operators are – up and running with a fresh configuration asap.
- Theatres. I am on the Board of Hull Truck. We have been looking at productions in our new £15 million theatre and I was fascinated to listen to how rehearsals; marketing and audience are pulled together only for the whole process to start again – from scratch – for the next performance or, tour.
- Fashion. Anyone who has witnessed Zara transform the seasons from a straight 4 to over 17 per year will see how much we have to learn. Look at Li and Fung and the way they transformed the nature of warehousing for Levi by putting the inventory on the ships shuttling between manufacture and their markets.
- Mountain economies. Adam Pain has written some excellent stuff about poppies in Afghanistan; about wild honey in Tamil Nadu. This Blog has covered flowers; dairy and other industries that are built on a major informal component. what can we learn from them?
- Tokyo. I worked there in the 90s and marvelled at the utilities carried on what looked like crowded telgraph poles. What are the current ways to transport energy and what are the options? Can these be designed into urban spaces.
- Hawali. The Financial system in any disaster collapses. Holes in the wall no longer exist and looting wrecks security. What can be learned from a time honoured and highly effective Hawali system to transfer money all over the world. This takes us to questions about finance in general. Is the micro finance root enough to deal with this?
- Aid. Last but not least, Humanitarian efforts world wide. What have we learned?
5. Design. At Hull Truck we are about to do something with local school students. We want them to envision what they see as their City in 25 years time. The Royal Society of Civil Engineers has suggested that if nothing happens on climate change then, UK coastal towns like Hull will end up on stilts. Set the scene and ask fertile minds to dream.
This is small example. Transformational Logistics urges us to do this on a bigger stage. We need to identify those locations on earth that are potentially at risk. This is not difficult and, it is made easier by the statistic quoted in the previous post that by 2050 75% of the 9 billion population will be urbanised and the majority of them in no more than 50 City Regions. Are these places fit for purpose? This is where the Logistics Capacity Assessment comes in. Then, we need to understand the skills gaps and the training needs. In conclusion, we need to be aware of Goldratt’s sober warning that 90% of constraints are caused by Policy. I would add that 90% of the solutions come from common sense.
Let’s not forget Simply Modal. Amidst all the talk of sophisticated materials handling equipment there is often an assumption that goes unchecked. Are we exploring Manual Distribution Systems? In many places we can learn more from the Incas – they connected an Empire stretching more than 3,000 kms without the wheel – than from Walmart. Just look on this Blog at bikes built from bamboo with adjusted wheel bases. Elsewhere, we are looking at metal pallets that don’t waste wood – which is highly dangerous when your entire utility system is destroyed and leaking inflamables.
What are we going to do about this?
Transformational Logistics sees all of this as way beyond the scope of Humanitarian Logistics at one end of the spectrum and Developed World Logistics at the other. The key is in the word – transformational. Sadly, disasters may happen without warning but the capacity to deal with them can. Just like the Tsunami a few years back when technology could have monitored earth movements and signalled an emergency; there is a need to put in place a clear understanding of logistics capacity and, readiness to react – hardware; software and peopleware. This could be something like an extension to the World Bank’s Logistics Performance Index.
Paul Collier was quoted above on the need to transform Haiti but he went on to warn against the “zoo of NGOs” and misguided thinking leading to a confusion of actions. We see Transformational Logistics as a realistic umbrella for the thinking, techniques and skills required to anticipate and, deal with our global future; for places like Haiti to have a realistic chance of dealing with a disaster AND move towards a sustainable future.