Lessons from allies' Afghanistan defeat

Afghanistan has shown that logistics can defeat the most potent of world powers when ignored in the environment where it is expected to work. After 18 years of war, the Allies working to defeat the Taliban have admitted defeat, a war that cost America alone over an estimated $1 trillion and 2,400 lives. In Britain a very conservative cost estimate is put at over £30 billion, money diverted from pressing demands elsewhere. President Trump is preparing America for a cut and run as he attempts to deliver on his promise to pull out of America's "endless wars" by excluding the Afghan government from the peace talks with the Taliban, who have never been defeated in the countryside where the terrain and climate favours guerrilla warfare and imposes huge logistics cost on the foreign occupying forces.

As I warned in my blog of July 10, 2010: "Logistics will be Britain's Afghanistan calvary," the Talibans' great advantages over its enemies were the country's ideal guerrilla warfare terrain and its enemies' logistical problems, "the cost of which would break the coalition's will at a crucial time when nations must tighten their belts as the world faces another possible financial meltdown." I went on the say: "Military logistics is not just about controlling the supply chain effectively to deliver all that is required to the war theatre at the right time. It is also about how the chosen battlefield can be used to degrade an enemy's military ambitions. In this respect the Taliban had the country's geographical and climatic conditions working in their favour That, perhaps, more than any other factor, ensured that the allies could not win a military victory."

But there are other lessons to be learned from the allies' Afghanistan defeat. First and foremost, never fully trust the military mind, almost never known for its original thinking, because, as with the Pentagon, it will always advise throwing more good money after bad. Britain's military advisers were no less obtuse when, following Britain's withdrawal from Iraq, the British commander in charge was more concerned at using up his recently freed-up troops for fear of losing them. "If we don't use them we lose them," he crassly averred.

Another key lesson is the economic one and its political reverberations since the two are inextricably entwined. Consider what these "endless wars" have cost the American societal fabric. Real incomes per capita are lower now than the were over 30 years ago, while most of the country's wealth is now concentrated in the hands of a tiny few. Huge sums are desperately needed to shore up America's crumbling infrastructure. Such is the level of homelessness in American cities that the Government has been concerned at the soaring rates of Hepatitis A, which is caused by faecal contamination. Its response has been to issue poo maps so people can avoid the risks! One wonders if Capitol Hill is on a poo map.

President Trump's aim is to pull out of Afghanistan before next year's election. The proposed deal is that the Taliban will pledge not to host any terrorist attacks on America, in return for bringing American troops home. Years of strife would suggest that the Taliban would be inclined to uphold the deal, but don't hold your breath. Reportedly, the Taliban have also pledged not to undo the progress made with women's rights. In a deeply conservative society that, too, alas, may prove a hollow pledge.
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Ocado automated warehouse fire cause identified

The cause of Ocado's disastrous automated warehouse fire at Andover, England, earlier this year has been identified as an "electrical fault at one of the first-generation battery charging units at the edge of the ambient storage grid....caused the plastic lid on top of a grocery-carrying robot to catch alight." This was revealed in a document issued to shareholders as part of its planned tie-up with Marks & Spencer (M&S) retail group. Steps to prevent further crippling fires involve introduction of extra "localised" smoke detectors and removing the plastic lids on its robots, which serve no practical purpose and will not impact the robots' efficiency. It also plans to add heat sensors in the ambient product storage grid, in addition to the those existing sensors in the chilled storage grid. Curiously, however, one is left asking why an 'award-winning' fire suppression system was so quickly overwhelmed. Fire fighters at the scene also remarked on the highly compact nature of the grid storage locations over the top of which hundreds of robots swarmed, which made it difficult for firefighters to get around easily.

Automated warehouses have been around in Britain since the 1980s and while their level of applied 'intelligence' has grown remarkably there are certain aspects that have not changed. Their costs and risks remain as high as ever, and while some improvements have been made regarding their flexibility, if business circumstances change so much as to make them redundant then their resale value would be near zero. Their payback periods will, of course, vary according to how hard they are worked and that, of course, is a function of customer demand, but anything less than five years would be unlikely. All this shows the critical necessity of conducting a sound payback exercise. But is there something else that may be overlooked and yet is critical to any successful, automated warehouse? Yes, there is, and big automation investors ignore it at their peril.

                 Price governs automation viability

The overall business model must be closely examined in relation to where a company stands with its competitors. If the revolution in British food retailing over recent years proves anything it is that price is king, but the dominant  retailers have still not taken that fully on board, which partly explains the meteoric rise of the food discounters like Lidl and Aldi, who between them now account for nearly 15% of the total UK grocery market. Their secret of success was two-fold. They spent far less on outfitting new shops and brought them to readiness much quicker. Secondly, they treated inventory-holding costs with respect, because such costs can dwarf all other warehousing costs combined. This meant sticking with far fewer product lines, typically 1,600, compared with 40,000 for their big competitors, all of which were chosen for their fast turnover rates, and if they began to slow they were quickly replaced by anticipated fast movers. Translated at the shopping level, it meant buyers, comparing like-for-like shopping baskets, could expect to spend 30% less than with the big four retailers. 

This brings us back to the payback scenario that will emerge next year once Ocado has dropped food retailer Waitrose in favour of M&S. Next year M&S will pay £750 million to form the 50-50 joint venture with Ocado to allow it to offer its customers an online service, currently lacking. In the Ocado shareholders' circular about the fire, however, it warns of several risks relating to the deal, one of which is that Ocado's retail customers may stop shopping with the company and instead buy products from Waitrose online or other competitors because they view M&S to be more expensive. In one survey of 250 Ocado customers a disturbing 22% said they would no longer remain with the company if it did not sell Waitrose products. M&S's notoriously high food prices  may yet prove its undoing now that it has embarked on a costly automation route. Before its proposed tie-up with Ocado was announced, M&S's food side was already struggling against cheaper competition, warning enough, one would think, in a world where price is king.

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Britain's air pollution curbs are failing

Latest air pollution concerns signal more stringent targets

Transport is the lifeblood of logistics but along its arteries from motorways to minor roads its emissions are a growing health concern which has left the British Government on the backfoot after years of inaction. Belatedly, the Government is waking up to the problem, which public health officials are only now recommending that local councils take action, too

The need for firmer action and the abandonment of old air pollution reduction targets has been highlighted by a new report from Public Health England, (PHE) the official public health agency, and other new research. London, for example, compared poorly with Paris. Since 2010 levels of fine particulates from London traffic have dropped only a quarter the rate of Paris. The latest research from Kings college, London, points the finger at the 11% year-on-year rise since 2010 in the use of motorcycles like Deliveroo, whose exhausts tests are much weaker than those for cars and lorries. "This comes as a big surprise," says Dr Gary Fuller, Kings College. "If we just carry on in the same way it will take many years to reach the legal limits," he said. "Progress is very slow." Support for this claim is that the level of fine particulates from traffic between 2010 and 2016 fell an average of  2.6% a year but more recently appears to be tailing off.

The implications for logistics transport operators are profound and point to an accelerated adoption of various sticks and carrots to hasten the reduction of air pollution largely caused by diesel and petrol vehicles. But apart from the more obvious moves like switching from fossil-fuelled vehicles to all-electric, the logistics industry could help in other ways, especially in relation to online shopping and lack of joined up thinking in big cities like London where typically food outlets could receive up to 13 deliveries a day. Consolidation warehouses in cities could relieve that problem.

At the dawn of online shopping it was thought that there would be a net environmental benefit because one delivery van could deliver dozens of shop orders in a small area and thus replace dozens of separate car journeys to do the weekly shopping. It would also have meant significantly fewer road accidents. It has not worked out quite like that because many shoppers now order single items or, for example, may order six dresses of the same design but in different colours so that they can choose which one and return the other five. The online suppliers have made a rod for their own backs because the high cost of returns means that they are making very little money.

Prompt, firm action to limit air pollution does work and the transport players recognise the need for change but are they ready to meet the hastening of existing measures and new ones to slash the estimated 40,000 premature deaths from air pollution in Britain every year and billions of pounds in medical care?

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