On the Viability of Fixing Leaky Supply Chains for the Poor Through Benefit Transfers: A Call for Joint Distribution

Abstract

Supply chain managers have yet to solve the conundrum of profitably distributing and selling to the poorest consumers. Most prevailing methods of addressing this problem take one of two contrasting approaches—that is, (1) price subsidization or (2) benefits/cash transfers. The former has been heavily studied in the literature with the consensus being that it is highly inefficient and prone to leaks. We investigate the viability of the latter by focusing on how branching out to reach the poorest customers impacts the performance of banks. Results indicate that the impacts of this approach are deleterious, thereby questioning its commercial scalability. Therefore, we argue that this approach may also have only limited potential in terms of being an effective, large‐scale solution to the problem of access for the poor. Instead, a third approach to achieve scalable Bottom of the Pyramid growth and development needs to be considered—cultivating partnerships through joint distribution.

On entrepreneurial resilience among micro‐entrepreneurs in the face of economic disruptions… A little help from friends

“…Academics and practitioners agree that it is challenging for large, multinational firms to successfully create supply chains and distribution networks at the BOP (Rao et al, 2019). Despite this, several large, multinational firms continue to show interest in engaging with this segment of the population.…”

“…In the early days of BOP‐related scholarship, income thresholds were the primary basis to demarcate the bounds of what was viewed as “the BOP” (Banerjee and Duflo, 2007). Recent SCM researchers have however cautioned that establishing BOP membership based purely on income is likely to be inadequate because (i) inflation diminishes purchasing power unevenly across space and time, and (ii) more importantly for the purposes of SCM, physical distribution challenges may be harder to address in more geographically dispersed societies (Rao et al, 2019). Recent SCM scholars therefore propose that the BOP is instead a concept based on geography rather than income.…”

“…Their failure is therefore likely to have direct implications | 361 ENTREPRENEURIAL RESILIENCE AT THE BOP for their channel partners up and down the supply chain. Nowhere is this more obvious than in rural populations in emerging economies-a segment that has sometimes been called the bottom of the pyramid ( BOP) (Rao et al, 2019).…”

“…This paper contributes to the SCM literature in multiple ways. First, by focusing on the BOP, it integrates insights from development studies, as well as social sustainability into the SCM mainstream-areas of growing scholarly interest (Rao et al, 2019). Second, our focus is on entrepreneurial resilience in the face of disruptions, thereby boundary spanning the field of SCM with entrepreneurship (Golicic and Sebastiao, 2011).…”

A New Perspective on Returns to Scale for Truckload Motor Carriers

“…Second, since returns to scale are a long‐run phenomenon, a between‐subject estimator is necessary to appropriately test effects (Xu et al 1994; Muir et al 2019). If we utilized panel data, we would need to use carriers' average size across the years as the focal predictor, akin to Miller and Saldanha (2016) and Rao et al (2019). By default, a cross‐sectional design estimates between‐subject effects and, hence, is appropriate to answer questions regarding returns to scale.…”