How supply chains are going the Gandhian way

Supply chains are slowly aligning with Gandhian principles, as they reshape to the realities of political economy.

It is trite but true that Gandhi’s ideas continue to influence the world in many realms—social, economic, political. Often the influence is an outcome of the quest for an alternative to mainstream practices that dominated these spheres in previous decades, but with disastrous results.

History of supply chains is as old as the history of humanity. They are the scaffolding of the existing global economic structure, and as the prevailing development pattern with its attendant problems is being discredited, the pressure on supply chains for adapting to the new realities of political economy by correcting and reshaping themselves is increasing. The reason is simple: their sweep being large, supply chains soon feel the impact of business and public policy decisions somewhere in any of the stages: be it production or storage or distribution or movement or disposal.

“There is no such thing as Gandhism …I do not claim to have originated any new principle or doctrine”, said the Mahatma, in 1936, while addressing workers. Gandhian ideas or ‘The Gandhian Way’—as J B Kriplani titled his book—were an eclectic amalgamation of Western thought, primarily from Ruskin, Thoreau and Tolstoy, with quintessential indigenous Indian thought; in retrospection, the blend is plain common sense. We, therefore, do not have any rigid Gandhian checklist for examining today’s supply chains, though we have ample utterances and writings of Mahatma to gauge their direction.

As the world meanders towards another major economic downturn, the mass production model powering global supply chains no longer seems the panacea for employment, growth and development, as it is more like a zero-sum game. After all how many countries can concurrently emulate China. Even if they could, would they be willing to bear the social, economic and environmental brunt on a similar scale. More so, is this model viable? After all, western civilisation may not have turned out be a ‘good idea’. Therefore, the Gandhian alternative of decentralised ‘production by the masses’ in contrast to only centralised ‘mass production’ is gaining hold, albeit without delinking the producer from global value chains. 

The collaborative dairy farming model, for instance, which links innumerable small milk producers to a regional milk grid, has been a resounding success in India and elsewhere. Even the private dairy industries are adopting a similar approach. And numerous handicraft makers, without migrating to the city, produce goods in villages that traverse the farthest ends of the globe. The decentralised production, whether of goods, including high-tech ones, or even services like IT, is sound risk mitigation strategy for resilient supply chains. The concept of food-miles is leading to shortening of food supply chains.

Contrary to popular perception, Gandhi did not hate machinery per se but disliked heavy machinery and factories that uprooted people from their surroundings and engaged them in soulless work. But in large part this rejection of big machinery stemmed from their being part of the exploitative colonial supply chains that drained India’s wealth. Today, robots are fast replacing workers in hazardous work occupations.

Coupled with this was also the centralisation of power, authority and policy formulation. However, power distribution in supply chains is still uneven; the dominant partner often abuses its power. To be fair, businesses do try to act as a chain and compete as a cohesive ensemble, because even if one link is weak, the whole chain is weak. Still, when it comes to distribution of supply chain profits, the chain breaks.

Gandhi did not want abolition of private property, yet wanted economic equality. He sought to achieve this by exhorting the rich to act as trustees of the society, with a public purpose and without conspicuous consumption. Even earlier, businesses were into philanthropy and charity, but now Corporate Social Responsibility (CSR), at a global level and in an organised manner, is the new credo that the businesses swear by. CSR has already moved beyond the maximisation of shareholders’ interests to ensuring wider stakeholders’ interests. 

“The world has enough for everyone's need, but not enough for everyone's greed”, said Mahatma. Only sustainable supply chains and its eco-system can assure a sustainable business—a belated realisation; hence, recycling, recovery, green logistics and circular economy are de rigueur. Today, Wal-Mart touts with pride its sustainability index towards reducing carbon footprint. Long-term profitability means strengthening of local community, not entirely due altruism, but at least for building the right brand image. 

Consider the care that companies exercise to ascertain if no slave labour is employed, neither human rights abuse nor environmental degradation occurs at any stage in the entire supply chain while sourcing cocoa from Africa, or palm oil from Malaysia, or beef from Brazil. The U.K. parliament passed a Modern Slavery Act in March this year that mandates businesses to certify that the goods produced or services rendered by the workers in the entire chain, including sub-tier suppliers, are free of trafficking or slavery. Already, major electronic parts makers avoid sourcing minerals from conflict-regions. Ethics and governance are at the forefront of supply chains. The direction is right but the stride is slow. 

The prognosis: As consumers become more aware and companies move towards increasing their transparency, efficiency, and productivity to gain competitive advantage, they will do more with lesser resources—air, water, energy, raw material—and reduce negative externalities, adopting a long-term approach. Indeed, as they do this, the supply chains will align even more closely with Gandhian principles, boosting the businesses and, in turn, their balance sheets.

Prashant K Singh is a logistics and supply chain management professional with the Indian Air Force. The views are personal.

He tells how supply chains & logistics affect every thing around us on his blog, Unshackled, a part of Business Standard's platform, Punditry.

He tweets as @ZenPK