Strategies in Humanitarian Supply Chains - Example

STRATEGIES IN HUMANITARIAN SUPPLY CHAINS Name Course Tutor Date Executive summary The report focuses on the strategies that are applied in the humanitarian supply chain. The first section offers a brief foundation of the paper. The second section then elucidates the elements of the humanitarian supply chain to get an insight on the phases. The next section then expounds on the already identified strategies and their importance. The report further outlines the challenges that affect the humanitarian supply chain. Furthermore, it gives a recommendation that should be followed to make sure that the future of the humanitarian supply chain is ensured across all levels. The last section of the report then concludes by giving an overview of the gist of the paper. Table of Contents Executive summary 2 Table of Contents 3 Introduction 4 Strategies in Humanitarian Supply Chain 7 Challenges Facing the Humanitarian Supply chain 9 Recommendations 11 Conclusion 12 Bibliography 14 Introduction Disasters have been happening and are bound to happen unpredictably. Millions of people are affected by disasters annually (Van Wassenhove, 2005). The recent statistics indicate that there are an increased number of man-made as well as natural disasters. This calls for efficient logistics and supply management for the humanitarian aids. A disaster refers to the abrupt expected or unexpected phenomenon that causes collapse f the normal functioning of the community resulting to adverse impacts on the people, environment, and their work limiting their ability to cope using the available resources that remain unaffected. These disasters usually call for the exceptional demand for supply chain, organizational and logistical skills aimed at assisting the affected areas (Van Wassenhove, 2005). Supply chain management and logistics is necessary in such situations to support the various stakeholders as well as the implementation of response operations so as to ensure efficiency and timely response. The aim f this paper is to evaluate in all levels the strategies used in humanitarian supply chain (Van Wassenhove, 2005). The paper takes the approach of first exploring the humanitarian supply framework and goes on to look into the strategies that it uses. Framework of the Humanitarian Supply Chain The main aim of the supply chain is to make sure that the suppliers are linked with the customers; owners of demand. It ensures that the correct supplies reach the right locations in right quantities and at the right time. There are processes involved in supply chain these include the processes associated with the flow of goods as well as that of transformation of raw materials to the final products (Kovács Spens, 2011). Humanitarian supply chain is also similar to the commercial chain supply in that there is a flow of the relief chain from the donors to the consumers who are those affected by the disaster. The primary parties that are involved in the management of humanitarian supply are the non-governmental organizations (NGOs) and the government. The government has a larger role in that it has control over the economical, social and political conditions and therefore has some form of direct control to the humanitarian chain supply through various decisions (Kovács Spens, 2011). The public, donors and the private sector are also other bodies other than the government that are also players in the humanitarian supply chains. There are various phases of disaster management and therefore humanitarian supply chain (Kovács Spens, 2011). Humanitarian supply chain has various elements. The elements can be observed as phases that have different players, actors and strategies as well. The first phase is the preparation phase consisting of mitigation and preparedness (Kovács Spens, 2011). Mitigation entails all the activities that are aimed at preventing an emergency, reducing the chance of the same emergency occurring, and minimizes the effects of any unavoidable emergency. Preparedness on the other hand includes planning on how to respond to the disaster. This phase majorly deals with strategic planning that addresses the long term decision making in the supply chain. Through strategic planning the organization is able to identify assets and resources as well as conduct a strength and weakness analysis on the status quo (Kovács Spens, 2011). This includes outsourcing for non arsenal activities, location of storage and distribution points, acquisition of donations, deployment of resources to the affected individuals, and organizational strategy. The lean strategy of supply chain is used so as to do away with any waste (Oloruntoba & Gray, 2006). The lean strategy views anything that adds no value to the consumers as waste, and through its elimination, there is an aggregate value added and superior offer availed. The next phase is response that defines the actions taken just before, during and after any major emergency or disaster. The goal of this phase is to ensure that lives are saved; property damage is minimized, and optimizes the recovery from the accident. This short term phase mainly deals with demand, supply, information management and fulfillment in administration of the relief aid (Kovács Spens, 2011). The demand and supply aims at balancing between the needs of the affected individuals and the capabilities of the available supply chain. Some of the activities includes forecasting the demand, defining various customer demands and then synchronization of the demand with the supply and distribution mechanism. It also involves designing of a proper logistical network that then fulfils the needs (Kovács Spens, 2011). Information management on the other hand collects information that aids in supply chain management, collaboration, supply tracing and tracking as well as delivery of the supplies to the right people. This phase applies the agile supply chain strategy that responds to the rapid perturbations that arise due to different customer demand levels and requirements as well (Oloruntoba & Gray, 2006). This strategy takes a holistic approach to information systems, logistical processes, and mindsets. The last phase is the reconstructing phase that includes all the recovery activities. These activities are mainly aimed returning the entire infrastructure to normalcy (Kovács Spens, 2011). Additionally, the phase also guides the long-term efforts that are designed to return lives to improved levels after the disaster. In this last phase the supply chain strategy that is applied is the lean strategy since the demand is known. This is because it is geared towards giving the customers (the affected individuals) their perceived value through minimizing waste (Oloruntoba & Gray, 2006). Strategies in Humanitarian Supply Chain The humanitarian supply chain is very diverse and therefore needs effective strategies to keep going. Being that the emergencies are never planned for but rather forecasted, there must be effective control of the current situations in preparedness for anything. The two supply chain strategies that integrate well with humanitarian supply chain are agile and lean strategies (Oloruntoba & Gray, 2006). This is simply because there is the challenge of maintaining the balance between the response capacity and still being cost efficient. These two strategies that are mostly discussed in business and manufacturing supply chains, have received application in the humanitarian supply chain (Cozzolino et al, 2012). They are geared towards ensuring that performance and competition are upheld. The agility strategy is based upon the foundation that the humanitarian response organizations have the knowledge of the affected individuals and thus a virtual corporation is applied so as to effectively respond to the status quo at the same time taking care of difference in demand (Cozzolino et al, 2012). Lean strategy on the other hand is where the humanitarian organizations be it donors or the government develop a method that is effective in eliminating waste and at the same time offering the perceived value of assistance to the affected individuals. The lean strategy is applied upstream while the agile strategy downstream (Cozzolino et al, 2012). Humanitarian supply chains are volatile, unpredictable and need flexibility so as to respond to the affected individuals as quickly as time can allow. In the response phase the best strategy that is used is the agile supply chain strategy. Oloruntoba and Gray (2006) from their study of the agile supply chain for humanitarian aid propose that the best approach for upstream activities is the lean approach (Cozzolino et al, 2012). They classify the upstream activities to include the assessment of needs, mobilization of funds, skills, people, and goods, transportation sourcing and management, planning and preparation prior to the supply of the relief aid (Oloruntoba & Gray, 2006). However, the agility approach when well applied may be used for the upstream activities so as to beckon more donors (Cozzolino et al, 2012). The downstream activities such as specific deliveries, site selection, sensitive needs assessment, and decision making, take the agile approach (Oloruntoba & Gray, 2006). These two concepts are only applied in the phase of relief as aforementioned. It is noteworthy that these are concepts borrowed from commercial supply chain (Carter, & Easton, 2011). There is also collaboration in the humanitarian supply chain. The partners involved in the supply chain come together so as to have a control strategy (Carter, & Easton, 2011). The partners in this case could be the suppliers, the donors, government agencies and the private sector among others. Through collaborations the humanitarian organization is able to conduct a special needs assessment so as to come up with goals and objectives that are applicable in the status quo. This is a strategy that is aimed at dealing with uncertain demand. It is mostly concerned with the emergency logistics where the stakeholders can be communicated to in the time frame that is well scheduled (Oloruntoba & Gray, 2006). In some cases, there has been collaboration with the military organizations. The military has long been known to go out of its way and provide necessary rapid assistance in emergencies (Oloruntoba & Gray, 2006). With the collaboration between the humanitarian response organization and the military supply chain there is the advantage of shared information, as well as logistics. The other strategy is resource management. In this case there is the keeping of inventories that ensures secure and timely transportation of the supplies so as to guard against any unpredictable demand (Carter, & Easton, 2011). In humanitarian supply chain this is mainly concerned with the logistics. It covers the procurement of items and services so as to effectively deal with the demand. Humanitarian supply chain also manages the transportation of the supplies. This links the supplier and the consumers who are the affected people. It makes the whole operation conceptually and physically plausible (Cozzolino et al, 2012). Through this strategy the redundant routes and delivery methods are well documented and the information shared across the chain so as to ensure smooth flow of goods. Challenges Facing the Humanitarian Supply chain The humanitarian supply chain has been seen as one which is complex compared to the commercial supply chain. This then means that there are consequently a number of challenges that come handy with humanitarian supply chain. First off, there is high uncertainty that is experienced especially during the disasters (Pateman et al, 2013). There is uncertain demand as well as uncertain distribution of supplies to the affected areas. As the humanitarian supply chain becomes diverse geographically, natural and man-made disasters have the capacity to affect the supply chain. Supply chain configuration and control structures also form another channel for uncertainty (Pateman et al, 2013). This is because there is likely to be stretched forecast horizons, complex decision making, and poor information flow for proper planning. The structure of the agencies also poses uncertainty to the supply chain in events of emergencies. Uncertainty may also arise when the components of the supply chain are not well coordinated. This could be the supply of wrong supplies to the right demand (Kovács, & Spens, 2009). For example, the donors might generate supplies as well as human resource that support relief effort of the wrong conditions. There is also variability in the quality, quantity as well as sustainability when sorting, storing and distributing the supplies (Kovács, & Spens, 2009). The second challenge is poor infrastructure that affects the communication and transport mechanisms of the supply chain. Raid disasters often destroy the entire existing infrastructure making the humanitarian logistics to be hampered a great deal (Pateman et al, 2013). This often leads to poor communications as well between the major stakeholders in the humanitarian supply chain. Upstream communication between the people on the ground and the headquarters is therefore affected (Kovács, & Spens, 2009). In this case the organizations may estimate the needs on the ground on the basis of per person or on family basis contrary to what is on the ground. The other challenge is human resource (Pateman et al, 2013). Poor training of the workers participating in the process affects the quality of many logistics operations as well as the humanitarian supply chain in general presenting a challenge too(Pateman et al, 2013). The employees who are deployed to manage the supply chain are usually not well trained and are therefore unreliable. This stems from poor training (Kovács, & Spens, 2009). Most of the employees who are in the humanitarian supply chain management lack knowledge in the field. This arises since most of those who participate in the humanitarian logistics and supply chain being volunteers (Kovács, & Spens, 2009). Earmarking of funds is another challenge that affects the humanitarian supply chain (Kovács, & Spens, 2009). The donors have a given control over the whole humanitarian supply chain since they control how the aid will be procured, stored, and distributed. The donors therefore under-invest in certain areas that are necessary for development. Recommendations Humanitarian supply chain is a very complex process that is very essential for any disaster that occurs. The identified challenges can be solved by the application of strategies that will ensure that the future of humanitarian supply chain is bright. The humanitarian organizations should adopt organizational learning so as to ensure continuous development. This strategy will enable the organizations to think ahead decreasing the carbon footprint if the infrastructure is not completely destroyed (Kovács, & Spens, 2009). To ensure continuous supplies to the affected individuals, the organizations should have decentralized warehouses stocked with local durable goods so as to boost the local economy. Secondly, there should be adequate education and training for the human resources facilitating the supply chain. Additionally, for sustainable pool of human resource, the agencies should train local personnel. To ensure that there is effective ear marking of funds; master plans for well coordinated funds allocation should be adopted (Kovács, & Spens, 2009). The transition process should be lucid enough so as to integrate the social and economical aspects. Because the supply chain has logistics as one of the method it uses, there are five strategies that can be used to optimize the humanitarian supply chain. First off, there should be a professional humanitarian supply chain and logistics community that will enable there is information sharing and adequate decision making (Van Wassenhove, 2005). This will ensure that the stakeholders are consistent and powerful. The second strategy is to offer a standardized training and certification in humanitarian supply chain management. This is because there is a thin line between commercial supply chain and humanitarian supply chain (Kovács, & Spens, 2009). This difference makes the operations so different. However, there is the borrowing of concepts. The other strategy is to focus on the performance measurements and critical success factors so as to make sure that there is efficiency in the supply chain. Lastly, the organization should apply the use of flexible technology solutions that have the advantage of improving the whole logistics and supply chain process. Last but not least, the academic community should focus more on the strategies that are used in the humanitarian supply chain. Conclusion There are many activities that are involved in the humanitarian supply chain. There are different phases of response to disasters, making the whole framework of humanitarian supply chain distinguishable from the commercial supply chain. The phases include the preparation response and reconstruction. Each of the phases applies different strategies depending on the goal that is targeted for. The strategies used here are directly borrowed from the commercial supply chain field. The first and second phases apply the agile strategy whereas the last phase applies the lean strategy as explored in the paper. Some other strategies used include collaboration and partnerships so as to optimize the humanitarian supply chain. There are challenges identified to be facing the human supply chain. This include uncertainty, destroyed infrastructure and communication channels, poor coordination, inefficient earmarking of funds by the donors and poor planning as well as inadequate training and education for the human resource involved in the whole supply chain. There are recommendations that have been made. These recommendations are aimed at making the future of humanitarian supply chain better than it is right now. All policy makers and participants as well as stakeholders can take a step to use the recommended strategies so as to optimize their operation. The strategies postulated in the recommendation will prepare the industry for any future bound challenges. This is because all the hitches shall be tackled in an effective manner. Bibliography Carter, C. R. and Easton, P. L. 2011, “Sustainable supply chain management: Evolution and future directions. In International Journal of Physical Distribution & Logistics Management, 41 (1), 46–62. Cozzolino, A., Rossi, S., & Conforti, A. 2012, “Agile and Lean Principles in the humanitarian supply chain: The case of the United Nations world food programme” Journal of Humanitarian Logistics and Supply Chain Management, 2(1), 16–33. Kovács, G. and Spens, K. M. 2011, “Humanitarian logistics and supply chain management: The start of a new journal”. In Journal of Humanitarian Logistics and Supply Chain Management, 1 (1) 2011, 5–14. Kovács, G. and Spens, K. M. 2009, “Identifying Challenges in Humanitarian Logistics”, International Journal of Physical Distribution and Logistics management, 39(6), 506- 528. Oloruntoba, R., & Gray, R. 2006, “Humanitarian aid: An agile supply chain? Supply Chain Management”: An International Journal, 11(2), 115–120. Pateman, H., Hughes, K. & Cahoon, S. 2013, “Humanizing Humanitarian Supply Chains: A Synthesis of Key Challenges”, the Asian Journal of Shipping and Logistics, 29(1), 81- 102. Van Wassenhove, L. N. (2005). “Humanitarian aid logistics: Supply chain management in high gear”. In Journal of the Operational Research Society, 57 (5) 2005, 475–489. Read More