– MGT492_Fritzfromlogististosupplychainmanagement.pdf

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F R O M L O G I S T I C S T O S U P P L Y C H A I N M A N A G E M E N T:

T H E P A T H F O R WA R D I N T H E H U M A N I T A R I A N S E C T O R

TA B L E O F C O N T E N T S

INTRODUCTION

The Scope, Importance and Challenge of Humanitarian LogisticsThe Humanitarian Context

HUMANITARIAN LOGISTICS: CORE CHALLENGES

THE PATH FORWARD

CONCLUSION: LEARNING AS THE BASIS FOR STRATEGIC CONTRIBUTION

APPENDIX

Case Studies on Humanitarian LogisticsArticles on Humanitarian Logistics

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23

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7

13

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By Anisya S. Thomas, Ph.D.Managing Director, Fritz Institute

andLaura Rock Kopczak, Ph.D.

Copyright ©2005 Fritz Institute

On December 26, 2004, the earthquake in Sumatra and the destructive Tsunami that it unleashedriveted the attention of the entire world. Each day for the first two weeks, the toll of the deadand missing crept higher and heart-wrenching stories of devastated families beamed into the livingrooms of people in every country. The response was immediate and unprecedented amounts of reliefmoney were collected.

While the drama unfolded on television, the disaster relief infrastructure at the local, national andinternational levels sprang into action. Volunteers from the affected communities began to clear thedead, and relief agencies began to provide food and shelter to those made vulnerable. Internationalrelief agencies activated their assessment teams, and supplies to provide the basic necessities to largenumbers of people across a broad geographic span were ordered and transported from locationsaround the world.

Unfortunately, disaster relief is and will continue to be a growth market. Both natural and man-madedisasters are expected to increase another five-fold over the next fifty years due to environmentaldegradation, rapid urbanization and the spread of HIV/AIDS in the developing world. According tothe Munich Reinsurance group, the real annual economic losses have been growing steadily, averagingUS$75.5 billion in the 1960’s, US$138.4 billion in the 1970’s, US$213.9 billion in the 1980’s andUS$659.9 billion in the 1990’s.

One of the notable aspects of the relief efforts following the 2004 Asian Tsunami was the publicacknowledgement of the role of logistics in effective relief. In the immediate aftermath of the Tsunami,as relief goods flooded airports and warehouses in the affected regions, aid agencies struggled to sortthrough, store and distribute the piles of supplies while disposing of those that were inappropriate. InSri Lanka, the sheer number of cargo-laden humanitarian flights overwhelmed the capacity to handlegoods at the airport. Downstream, relief agencies struggled to locate warehouses to store excess inven-tory. In India, transportation pipelines were bottlenecked. In Indonesia, the damaged infrastructurecombined with the flood of assistance from the military representatives from several countries andlarge numbers of foreign aid agencies created a coordination and logistical nightmare. As a EuropeanAmbassador at a post-Tsunami donor conference said, “We don’t need a donors conference, we need alogistics conference.”1 Similarly, a spokesman for Doctors Without Borders, announcing their decisionnot to accept any more money for the relief operations, said “What is needed are supply managerswithout borders: people to sort goods, identify priorities, track deliveries and direct the traffic of arelief effort in full gear.”2 Humanitarian logistics, the function that is charged with ensuring the effi-cient and cost-effective flow and storage of goods and materials for the purpose of alleviating the suf-fering of vulnerable people, came of age during this Tsunami relief effort.

Our research has shown, however, that only a handful of aid agencies have prioritized the creation ofhigh-performing logistics and supply chain operations. For most aid agencies, environmental factors,such as the unpredictability of disasters and the nature of funding, have resulted in operations withhigh employee-turnover rates, fragmented technology, poorly-defined manual processes, and a lack ofinstitutional learning over time. As a result, relief operations are not as efficient and effective as theycould be and relief to beneficiaries is delayed or reduced.

1 Understanding Humanitarian Supply Chains

I N T R O D U C T I O N

1 New York Times, January 6, 2005. 2 Economist.com Global Agenda, January 5, 2005.

This paper provides background on the current state of logistics in the humanitarian environment andthe factors that have limited the evolution of knowledge and the performance of supply chains forhumanitarian relief. We consider the external pressures that aid agencies are feeling from donors, localhumanitarian organizations, governments and corporations, as well as the internal limitations that haveimpeded progress in logistics. We then recommend five strategies that together define a path forwardfor aid agencies with regards to logistics.3

The Scope, Importance and Challenge of Humanitarian Logistics

Humanitarian Logistics is defined as the process of planning, implementing and controlling the effi-cient, cost-effective flow and storage of goods and materials, as well as related information, from thepoint of origin to the point of consumption for the purpose of alleviating the suffering of vulnerablepeople. The function encompasses a range of activities, including preparedness, planning, procure-ment, transport, warehousing, tracking and tracing, and customs clearance4.

Humanitarian Logistics is central to disaster relief for several reasons. First, it is crucial to the effective-ness and speed of response for major humanitarian programs, such as health, food, shelter, water, andsanitation. Second, with procurement and transportation included in the function, it can be one of themost expensive parts of a relief effort. Third, since the logistics department handles tracking of goodsthrough the supply chain, it is often the repository of data that can be analyzed to provide post-eventlearning. Logistics data reflects all aspects of execution, from the effectiveness of suppliers and trans-portation providers, to the cost and timeliness of response, to the appropriateness of donated goodsand the management of information. Thus, it is critical to the performance of both current and futureoperations and programs.

The importance of logistics to humanitarian relief can be illustrated by the efforts of the InternationalFederation of the Red Cross and Red Crescent Societies (IFRC) to provide assistance to the Indian RedCross after the Gujarat earthquake. On January 26, 2001 a 7.9 Richter earthquake struck Gujarat,where 41 million people were preparing to celebrate Republic Day in India. Thousands of people werekilled, the local airport was destroyed, the infrastructure severely damaged, and very little informationwas available in the early stages of the disaster. Nonetheless, within the first 30 days of the earthquake,along with the assistance of 35 partner organizations, the International Federation of the Red Cross’sLogistics Emergency Unit arranged the delivery of 255,000 blankets, 34,000 tents, 120,000 plasticsheets, and large quantities of other items such as kitchen sets that were distributed to beneficiaries bythe Indian Red Cross. More than 300 other global, national, regional and local NGOs and UN agen-cies similarly mobilized their staffs and resources.

Thus, the supply chain for relief is the ultimate sense-and-respond supply chain. Once a disasteroccurs, an aid agency sends in a team of experts to complete an initial assessment of the extent of thedamage and the number of people affected. The assessment forms the basis for an appeal that lists spe-cific items and quantities needed to provide immediate relief to the affected populations. Emergencystocks of standard relief items are sent in from the nearest relief warehouses. Calls are made to tradi-tional government donors and the public and commitments for cash and/or in-kind donations secured.

Understanding Humanitarian Supply Chains 2

3 The views presented here are based on extensive research conducted by Fritz Institute over the past three years, including case studies, interviews andconferences with the leading humanitarian relief organizations, technology and process development with select aid agencies, and surveys conductedduring the Tsunami relief operations in South Asia.

4 The definition and tasks of logistics was based on a Fritz Institute sector-wide survey of humanitarian logisticians from headquarters and the field thatworked with a broad range of humanitarian organizations.

3 Understanding Humanitarian Supply Chains

Suppliers and logistics providers are lined up, and the mobilization of goods from across the globebegins. When supplies arrive, local transportation, warehousing and distribution have to be organized.This is a tremendous feat to accomplish, given the remote places in which disasters tend to occur, theuniqueness of the requirements for each disaster in terms of both expertise and goods, and the factthat the disaster site is often in a state of chaos. Physical infrastructure such as roads, bridges and air-ports are often destroyed. National and local government, through which humanitarian organizationsmust often coordinate their activities, may be severely impacted, or even uprooted in the case of aconflict situation. Transport capacity may be extremely limited, or non-existent.

The Humanitarian Context

Aid agencies are the primary vehicle through which governments channel as much as $6 billion inannual aid targeted at alleviating suffering caused by natural and manmade disasters5. Relief is, unfortu-nately, a growth market: the period from 1990 to 2000 saw total humanitarian aid from governmentsdouble in real terms from approximately $2.1 billion to $5.9 billion6. In the aftermath of the Tsunami,it is estimated that the aid budget might actually have grown to $12 billion. While the largest aidagencies are global in scale, there are also many smaller regional and country-specific aid agencies.

Most global aid agencies engage in a mix of development and relief activities on a large scale7. The2004 budgets of the top 10 aid agencies exceeded $14 billion. Relief refers to the emergency food,shelter and services provided in the immediate aftermath of a natural or man-made disaster. An exam-ple of relief would be the initial 90-120 days of services provided by the various humanitarian organi-zations to assist the people affected by the Tsunami in December 2004. By contrast, developmentrefers to the longer-term aid aimed at creating self-sufficiency and sustainability of a community. Anexample of a development program would be the Area Development Programs executed by WorldVision India to feed and school children and teach women basic business skills in the slum areas out-side Chennai in southern India.

Most international aid flows from the world’s wealthiest countries to relief efforts in developing coun-tries, although countries like India are now both donors and recipients of aid. Large governmentaldonors exert a strong influence over the sector, as they provide the bulk of the funding for major reliefand development activities. Prominent among these donors are the United States and the EuropeanUnion, whose contributions have represented roughly 33% and 10% of total humanitarian aid, respec-tively, in recent years. Other western European countries, Canada, Japan and Australia are also majordonors to aid agencies in the business of responding to natural disasters and humanitarian emergencies.In recent years, foundations such as the Bill and Melinda Gates Foundation, individual donors and theprivate sector have also become important sources of funds for aid agencies.

The international aid agencies receiving donations from this global community fall into three cate-gories: entities operating under the United Nations’ umbrella such as the World Health Organization(WHO) and the United Nations High Commissioner for Refugees (UNHCR), international organiza-tions such as the International Federation of Red Cross and Red Crescent Societies (IFRC), whichoperate as a federation with country offices that are auxiliary to country governments, and global non-

5 Financing International Humanitarian Action: A Review of Key Trends, Humanitarian Policy Group briefing paper, November 2002.6 Financing International Humanitarian Action: A Review of Key Trends, Humanitarian Policy Group briefing paper, November 2002.7 For purposes of this report, the focus will be on disaster relief in the aftermath of a natural disaster or humanitarian emergency. Although we acknowledgethe critical importance of development, the dynamism and velocity of the relief scenario present specific exigencies which merit investigation.

Understanding Humanitarian Supply Chains 4

governmental organizations (NGOs) like CARE and World Vision. NGOs also maintain countryoffices, but their offices are not affiliated with the country governments.

As Figure 1 indicates, the funding from donor governments to the populations affected by disasters inrecipient countries flows through many different types of organizations before it reaches the end bene-ficiary.

Donations from each country are channeled through the international aid agencies to local partners inthe affected countries. In most cases, it is these partners closest to the affected population and of thesame culture that provide the relief services to the affected populations.

Two main external factors impinge on the growth and operations of international humanitarian relieforganizations. First, the number of disasters and the number of simultaneous operations around theworld are increasing, stretching the existing resources of the humanitarian community. It is clear thatthe sector as a whole has to find ways to become more efficient in order to be able to respond to theneeds of ever-increasing numbers of people.

Second, donors are becoming increasingly demanding with respect to performance and impact. Withan increasing number of aid agencies, the competition for donor funding is getting more intense, anddata demonstrating impact is likely to be the differentiator. Further, donors are becoming less tolerantof obvious and expensive duplication of effort and are strongly encouraging aid agencies to collaboratearound the creation of common services. As a consequence, aid agencies have become more aware ofthe need to strategically use their resources.

Figure 1. Humanitarian Sector Funding Flows8

8 Source: DAC report on the sector.

Donor Organizations

UN Agencies

3rd Party MilitaryService Providers

GovernmentAgencies

General PublicDonor Countries

InternationalNGOs

General Public(Recipient Countries)

Local NGOs

Recipient CountryNational Red

Cross/Red CrescentSocieties

Red Cross Movement (ICRC, InternationalFederation, donorCountry National

Societies)

A f f e c t e d P o p u l a t i o n

Donor Governments

Our research over the last four years suggests that certain common challenges face the field ofhumanitarian logistics.Lack of Recognition of the Importance of Logistics: Most humanitarian organizations have twobroad categories of activities: programs and support services. Programs refers to the front-line activitiesin relief and development, the provision of services such as food, water, shelter, sanitation, etc. Supportservices refer to the activities of the “back room”, which support the front line: logistics, technology,finance, communication, human-resources, etc. Funds are usually allocated by donors to programs witha certain percentage allowed for administration, which includes support. Thus, the focus is on short-term direct relief rather than investment in systems and processes that will reduce expenses or makerelief more effective over the long-term. As a consequence, logistics and other support services maynot have adequate funding for strategic disaster preparedness, and investing in infrastructure, such asinformation systems, is discouraged.

A related challenge has to do with the fact that most decisions during a relief operation are made bythe program staff who control the budget. The assessment team sent to determine the needs of thepopulation affected by a disaster or humanitarian crisis often does not include a logistician. Based onthe assessment, the program staff determine the supplies that need to be procured in order to providerelief services, and then inform logistics that they are responsible for the immediate procurement andtransport to the field. Our survey of the largest aid agencies after the Tsunami showed that 42% of theassessment teams did not include a logistician. Since, as seen in the Tsunami response, logisticians areoften not consulted in the decision process, some of the logistics bottlenecks are not anticipated andplanned for causing unnecessary delays in delivering relief.

Lack of Professional Staff: In general, humanitarian organizations are defined by their personnel,who share a common value system based on alleviating the suffering of those affected by disasters andhumanitarian emergencies. People who choose a career in this world come from diverse and variedbackgrounds and are driven by a desire to resolve crises and do good in the world. They achievedtheir positions by trial and error and have honed their valuable skills through experience in multipledisaster theaters over several decades. However, the vast majority of people with logistics responsibili-ties do not have training in logistics. While this is changing in large multilateral organizations, thetrend toward the “professionalization” of logistics has been slow to take hold as field experience is con-sidered much more valuable than formal training in logistics.

Also, as the operations of international humanitarian organizations expand to simultaneously includemultiple geographies, organizations are struggling to find people who can manage the complex supplychains of relief. For example, in order to effectively respond to the Tsunami, 88% of large aid agenciessurveyed had to pull their most qualified staff from the ongoing humanitarian operations in Darfur.

In conjunction with Erasmus University and APICs, a widely recognized training and certification body forcommercial logistics, Fritz Institute conducted a survey of approximately 300 humanitarian logisticians atthe field, regional and headquarters levels of major humanitarian organizations. The purpose was to identi-fy existing training and certification programs and the range of logistics functions that they encompassed.Respondents to the survey (92 respondents) represented a wide variety of organizations including the UN,the Red Cross movement and international and regional NGOs from headquarters as well as the field.

H U M A N I TA R I A N L O G I S T I C S : C O R E C H A L L E N G E S

5 Understanding Humanitarian Supply Chains

Understanding Humanitarian Supply Chains 6

Over 90% of the respondents indicated that they felt training was directly linked to performance onthe job and that standardized training would be useful in the field. However, only 73% had access toany logistics training while 27% had no such access. For those with access, training was most often provided by co-workers on the job or by in-house training staff. However, respondents noted that jobtraining within organizations tended to be non-standardized, with the content largely dependent on thetrainer. The respondents indicated frustration with lack of consistency in training, lack of ways tomeasure the effectiveness of training, lack of funding for training, and lack of specific training inhumanitarian logistics.

Inadequate Use of Technology: Our survey of logisticians that participated in the Tsunami reliefoperations showed that only 26% of the respondents had access to any tracking and tracing software.The remainder used Excel spreadsheets or manual processes for updates and tracking of the goodsarriving in the field. Despite this, 58% stated that they received accurate and timely information ofwhat was in the pipeline!

In the private sector, supply chain technology has enabled the transformation of the logistics functionfrom a peripheral to a strategic one. By accumulating data about the supply chain, decision makershave new ways to create efficiencies. Historical data also allows greater effectiveness through thetracking of supplier performance, cycle times, inventory levels and turns, etc. In the humanitarian sec-tor however, logistics and supply chain management is still largely manual. The inability of IT staff atheadquarters to understand the imperatives of the field, the primacy of financial managers in decisionsabout software used in organizations, and the need to keep networks secure are the main reasons thathumanitarian logisticians cite as the cause of the slow evolution of IT.

Lack of Institutional Learning: The intensity of relief efforts, high turnover and the crisis-orientednature of disaster response creates an environment in which there is a lack of institutional learning.Once a crisis is dealt with, aid workers are immediately assigned to the next mission, rather than tak-ing the time needed to reflect and improve. Or they leave. Input from the organizations we inter-viewed suggested that turnover of field logistics personnel was as high as 80% annually. Thus, whilelogisticians have a remarkable track record for getting the job done under the most adverse andextreme circumstances, the lessons learned from one disaster to the next are often lost. The experienceof the occasional veteran logistician is largely tacit and difficult to communicate to the next genera-tion, nor is it transferred from one field context to another.

Limited Collaboration: With the emerging competition for funding among major relief organiza-tions, the heads of logistics tend to each fight their own battles with little collaboration. Althoughmany of them face the same challenges and know each other, or of each other, they do not often meetor talk to one another except during an actual disaster response operation. For example, we found thatseveral of them were thinking of deploying a regional warehouse structure for faster response.Coincidentally, three were actually talking with warehouse providers in the same city. Similarly, twoothers had commissioned expensive analyses to select a fleet management system and three werewrestling with the idea of a training program for field logisticians. None knew that their counterpartshad the same objectives and, therefore, there was little collaboration or resource sharing. Similarly, inthe Tsunami relief operations we found that just over half the logisticians (56%) reported working withother agencies in setting up their supply chains.

Today’s underdeveloped state of logistics in the humanitarian sector is much like corporate logisticswas 20 years ago. At that time, corporate logistics suffered from underinvestment, a lack of recog-nition, and the absence of a fulfilling, professional career path for people performing the logistics func-tion. Over the last 20 years, corporate logistics has found its voice with top management. Under therubric of supply chain management, it has established itself as a core discipline whose best practicesare taught and researched at top business schools and promulgated by leading consulting firms.

In our conversations and convenings we ask logisticians from global, national and regional organiza-tions about their aspirations for themselves and their function. It is not surprising that their most sig-nificant priority is a knowledge-based field with a clear career track, collaboration with peers acrossorganizations and the ability to demonstrate the value of logistics with unambiguous measures andmetrics that tie with organizational strategy. The way for logistics to strengthen its power and be rec-ognized is by showing results and systemic improvement by clearly demonstrating over time how it iscontributing to the aid agency and responding to external pressures.

The Five Strategies

This section details five strategies we recommend for moving forward to improve humanitarian logis-tics. For each strategy we detail ways in which humanitarian logisticians can learn from each other,but also where they can draw upon the increasing interest in humanitarian logistics by academics andthe corporate sector. Figure 2 and Table 1 show the relationship between the challenges and the strategies and how each strategy addresses particular pain points. The five strategies each contribute as follows:

Creating a professional logistics community will enable humanitarian logisticians to share knowl-edge and experience on common issues and to create a consistent, powerful voice with all the stake-holders in the sector.

Investing in standardized training and certification will help build a pool of logistics professionalsthat share common processes and vocabulary, promoting professionalism and collaboration.

Focusing on metrics and performance measurement will empower logisticians to demonstrate andimprove the effectiveness of the humanitarian supply chains.

Communicating the strategic importance of logistics will enable logisticians to create awareness ofthe contribution that logistics makes and to obtain needed funding and resources.

Developing flexible technology solutions will improve responsiveness by creating visibility of thematerials pipeline and increasing the effectiveness of people and processes. Furthermore, advancedinformation systems will create the infrastructure for knowledge management, performance measure-ment and learning.

The remainder of this section discusses each of the five strategies in more detail.

T H E P AT H F O R WA R D

7 Understanding Humanitarian Supply Chains

Understanding Humanitarian Supply Chains 8

FIGURE 2. Development of a Path Forward

Table 1. How the Five Strategies Address the Pain Points

Creating a Professional Logistics Community

Creating a professional logistics community will provide logisticians from different organizations theopportunity to share knowledge and experience. A community of logisticians coming together consis-tently will also increase the recognition of the function.

The annual Humanitarian Logistics Conference, sponsored by Fritz Institute, has been active for 3years. Through the conference, high-level logistics managers from over 40 aid agencies haveexchanged ideas and fostered initiatives in areas of common interest such as information technology,

EXTERNAL PRESSURES• Increasing needs

• Increasing donor expectations

• Calls for accountability

PAIN POINTS• Lack of recognition• Lack of professional staff• Inadequate technology• Lack of institutional learning• Limited collaboration

THE PATH FORWARD1. Create a professional logistics

community 2. Invest in standardized training3. Focus on performance

measurement4. Communicate the strategic value

of logistics5. Develop flexible technology

solutions

Create a professionallogistics community

Invest in standardizedtraining

Focus on performancemeasurement

Strategically commu-nicate the importanceof logistics

Develop flexible tech-nology solutions

Lack of Recognition

Lack ofProfessional

Staff

InadequateTechnology

Lack ofInstitutionalLearning

Limited Collaboration

•••

•••

•••

•••

•••

9 Understanding Humanitarian Supply Chains

performance management, and training. This group has now expressed its desire to expand into a pro-fessional association where members will identify priorities for the field and methods to collaborativelyaddress those priorities.

A professional association can act as a clearinghouse for innovations by: 1. Engaging the skills of a network of academics, humanitarian logisticians and private sector

professionals with experience in back-room operations2. Building a repository of accumulated research and knowledge about logistics and supply

chain management in the humanitarian sector3. Creating common standards, guidelines and/or service requirements that can then be com-

municated with one voice to donors, technology partners, suppliers, and logistics service providers

Humanitarian logistics managers must work actively to make the association a useful, vital network. Inparticular, they must choose initiatives for the association to work on that are critically important.They must then invest the time and effort needed to support and gain from the initiatives while lever-aging the expertise and resources of the group. This will require more frequent, intense communicationand coordination among group members. It will also require a continual reflection about how thegroup can be used to support an individual organization’s goals. This is especially true of long-term ini-tiatives, for which the group must spend the time needed to ensure that goals and direction that areestablished up front are truly in line with the needs of individual organizations.

Corporate logisticians have long participated in multiple communities of practice. The biggest and bestknown is the Council of Logistics Management (which recently changed its name to the Council ofSupply Chain Management Professionals (CSCMP)), which hosts an annual educational conferencethat is attended by 5,000-7,000 people from a broad range of industries. Other examples of communi-ties of practice include academic roundtables or forums, councils led by particular logistics providers orconsulting firms, and industry-specific groups. Based on this experience, corporate logisticians cancontribute not only by sharing logistics knowledge and best practices, but also by sharing successfulapproaches to interacting as a community as well. There may also be opportunities to connect thehumanitarian logistics communities with corporate logistics communities such as CSCMP.

Academicians can also contribute by supporting the association’s role as a clearinghouse for academicresearch relating to humanitarian logistics. As detailed in the Appendix9, academics have written anumber of teaching cases and articles that document and create awareness of the concerns and prac-tices of the sector, thereby increasing the visibility and understanding of the field to new audiences.

Investing in Standardized Training

It is also clear to the community of logisticians with whom we collaborate that progressive training andeventually a standardized, externally recognized certification program are needed to create a market-place of professionals able to meet the requirements of organizations in the humanitarian sector.

The benefits of a comprehensive, sector-specific logistics training and certification program are numer-ous, including:

9 The Appendix lists selected recent articles and teaching cases related to humanitarian logistics.

Understanding Humanitarian Supply Chains 10

• Improved communication and cooperation across agencies and with donors as a result of standardized catalogs, terminology and processes

• Increased career mobility and job satisfaction for logisticians in the sector• A pool of trained logisticians whose skills have been externally verified, providing agencies

and donors with greater hiring flexibility and options

Formalizing knowledge will overcome, to some extent, the lack of institutional knowledge that occursbecause of high employee turnover, by capturing and disseminating knowledge in an organized way.To the extent that the various multinational aid agencies face similar logistics tasks and similar chal-lenges, it seems natural to approach knowledge management through a community of practice.Common training and the use of tools like e-learning would open up the possibility of creating a cadre of logisticians in the field, and so promote standardized logistics practices and in-country logistics capacity.

The logisticians who have participated in Fritz Institute’s Humanitarian Logistics Conference haveembarked on an initiative to create and implement a certification program in humanitarian logistics.The group has identified the following topics as relevant to all international aid agencies: managing ahumanitarian response, humanitarian supply chains, procurement, warehousing and inventory manage-ment, transport, fleet management and import/export procedures.

This is an ideal area in which to collaborate with corporate and academic partners, who have alreadyestablished formalized logistics training programs within their companies and at universities. By work-ing together, the community can leverage previous development of course content, as well as deliveryprocesses, to the greatest extent possible, while customizing as needed for the humanitarian sector.Corporate logisticians and academics may also take on the training itself, by hosting e-classroom ses-sions on their servers and by providing live trainers. Last, academics may help by developing trainingmaterials unique to humanitarian logistics. Electronic technology providers may develop unique deliv-ery mechanisms that work well in remote areas and at or near response sites.

Metrics and Performance Measurement

In general, humanitarian relief organizations have focused on “getting the job done” and have put littleeffort into performance measurement other than reporting to donors on the amount of relief and usageof funds for a given relief operation. Furthermore, learning has been approached on an ad-hoc basis,through post-operation evaluations, rather than through a structured process of continuous improve-ment, as has been used successfully in the corporate sector since the 1980’s. The transformation oflogistics from a peripheral function to a strategic one in the private sector can be traced back to thetime when logisticians began to be able to measure and communicate their value. The Plan-Do-Check-Act improvement process that is commonly used in the private sector could be quite useful whenapplied to humanitarian logistics.

As backbone information systems are implemented, aid agencies will have the capability to measureperformance across operations and to use measurement information in the same ways that informationis used in the corporate world. If the use of metrics is leveraged, aid agencies will be able to:

•Use actual performance as input into future operational plans•Identify and eliminate causes of performance breakdowns

11 Understanding Humanitarian Supply Chains

• Use analysis of current performance to inform continuous improvement of processes• Use actual data to strengthen voice with donors, suppliers and logistics service providers• Report performance to donors and the media to enhance the reputation and image of logis-

tics and of the aid agency

Since aid agencies execute their work as a series of projects (operations), performance measurementbest practices from corporations that also operate in project-based environments could be examined asstarting points for developing performance measurement at aid agencies. In any case, work must bedone to create measurement across relief projects (operations).

Academia has broad literature and much experience with performance measurement, project manage-ment and continuous improvement. Academics could partner with corporations and aid agencies tohelp tailor corporate approaches to the humanitarian environment.

Communicating the Strategic Importance of Logistics

Having created an organizational environment in which performance is measured, knowledge is builtand kept, systemic improvement occurs rapidly, and communities share and leverage their capabilities,logistics managers must take their story to all stakeholders – donors, their own organizations, corpo-rate partners and the media – regularly and with pride. This will allow the logistics organization toshowcase its contribution and garner continued support and resources to further develop and improve.

Within an individual aid agency, Logistics must update the logistics team, the operations managers andtop management regularly about its performance and the initiatives that it is taking to improve per-formance. Logistics must position its initiatives within the context of what other aid agencies aredoing. This will demonstrate to top management that Logistics is taking advantage of all availableideas and technology and is setting the organization up to compete against other aid agencies basedon a competitive advantage in logistics.

Similarly, the logistics community in the aid sector must find ways to paint a picture for donors andthe public demonstrating how timeliness and cost-effectiveness of relief delivery is improving overtime, insuring that donations are well-spent. Logistics must detail how improvement initiatives havetranslated to increases in efficiency, so that donors become increasingly motivated to fund not onlyoperations, but improvement initiatives as well.

Agencies should use communication strategies that highlight success stories. This may be donethrough internal presentations or through written articles and case studies that engage the media oracademic world. The recent issue of Forced Migration Review10 that focused on humanitarian logisticshighlighted the importance of logistics and presented many vivid examples that illustrated the role oflogistics in speed and effectiveness of response. It also showcased how aid agencies were using post-event learning to shape debate about allocation of resources to logistics.

The private sector can help the humanitarian logisticians communicate the importance of logistics bysponsoring and participating in joint conferences. Humanitarian logisticians can use these venues asways to explore new approaches and find examples to convey to their own management the strategicpotential of logistics. The participation of academics can also be crucial in validating the value of

10 Forced Migration Review 18, September 2003.

Understanding Humanitarian Supply Chains 12

logistics through the publication of articles and case studies.

Developing Flexible Technology Solutions

Humanitarian relief organizations have a common need for integrated information technology (IT)solutions that support procurement, distribution through a pipeline, tracking and tracing of goods andfunds, flexible and robust reporting, and connectivity in the field. Procurement involves global sourc-ing, drop shipment, using commercial transportation and third-party logistics firms, chartering aircraftor procuring local transportation such as mules and donkeys, tracking shipments, and monitoringprices for commodities around the world. The IFRC/ ICRC catalog of relief items includes 6,000 itemsfrom cranial drills for surgery at disaster sites to plastic sheeting for shelter. The UNICEF warehouse inCopenhagen includes an inventory of US$22 million in relief supplies at any given time; these suppliesare procured from over 1,000 vendors worldwide.

Despite the complexity of humanitarian logistics, manual processes still dominate and IT resources thatcould enhance information availability, reporting and learning are often not effectively leveraged.Some of the deficiencies of current systems include:

• Data must be written out onto multiple forms and keyed into multiple spreadsheets• Budget control is inadequate; funds may be misspent as a result• Usage of funds is not tracked to the extent that donors have requested• Procurement procedures are difficult to enforce; integrity is lacking• Tracking and tracing of shipments is done manually using spreadsheets• There is no central database of history on prices paid, transit times, or quantities

received/purchased• Reports are done manually, therefore little reporting and performance analysis is performed,

other than reporting to donors on quantities of relief items delivered for a given operation

Developing flexible technology solutions will improve responsiveness by creating visibility of thematerials pipeline and increasing the effectiveness of people and processes.

Furthermore, advanced information systems will create the infrastructure for knowledge management,performance measurement and learning. Information systems can be used to provide online catalogsfor correspondence and communication with suppliers and other partners, for performance measure-ment based on transaction history, and as a basis for collaboration.

While existing ERP and track and trace information systems may not be directly used for humanitarianrelief, many individual transactions and operational processes do carry over directly. Previous workdone by the corporate sector to standardize transaction, processes, and information systems may behelpful to the humanitarian community. Approaches to specifying, developing, implementing andmeasuring the performance of information systems also carry over. Thus, corporate logisticians and ITprofessionals may contribute by sharing experience and best practices, and by donating time to manag-ing development of information systems for the humanitarian context. Corporate IT professionals mayalso share their experiences with communications technology used in remote areas with minimal infra-structure.

C O N C L U S I O N

Learning as the Basis for Strategic Contribution

Humanitarian logistics has the opportunity to increase its contribution to disaster relief and to be rec-ognized for that contribution by implementing initiatives in the areas of knowledge management,technology, measurement, community, and positioning. While moving relief items to disaster sites willcontinue to be an important role for logistics, the strategic focus must be on providing timely informa-tion, analyzing that information to garner insight as to how to improve operations, and learning inter-nally and with others. Establishing a community that shares and invests jointly in advancing the fieldcan leverage each logistician’s efforts many-fold. It is through these two mechanisms of informationand community that humanitarian logistics can find its voice and create its future, rather than limititself to responding to the present.

13 Understanding Humanitarian Supply Chains

Case Studies on Humanitarian Logistics

Managing Information in Humanitarian Crises: The UNJLC Website, Rolando M. Tomasini & Luk Van Wassenhove(April 2005)Can Heroes be Efficient?, Laura R. Kopczak & M. Eric Johnson (October 2004)The TPG-WFP Partnership II – Learning How To Dance, Ramina Samii & Luk Van Wassenhove (April 2004)Genetically Modified Food Donations and the Cost of Neutrality: Logistics Response to the 2002 Food Crisis in Southern Africa,Rolando M. Tomasini & Luk Van Wassenhove (March 2004)Moving the World: The TPG-WFP Partnership I – Looking for a Partner, Rolando M. Tomasini & Luk Van Wassenhove(February 2004)Coordinating Disaster Logistics after El Salvador’s Earthquakes, Rolando M. Tomasini & Luk Van Wassenhove(October 2003) Logistics: Moving the Seeds of a Brighter Future (UNJLC’s Second Year in Afghanistan), Ramina Samii & Luk VanWassenhove (September 2003)The United Nations Joint Logistical Center: The Afghanistan Crisis, Ramina Samii & Luk Van Wassenhove (May 2003)The United Nations Joint Logistical Center: The Genesis of a Humanitarian Relief Coordination Platform, Ramina Samii & LukVan Wassenhove (April 2003)Choreographer of Disaster Management: Preparing for Tomorrow’s Disaster, Ramina Samii & Luk Van Wassenhove (2002)Choreographer of Disaster Management: The Gujarat Earthquake, Ramina Samii & Luk Van Wassenhove (2002)

Articles on Humanitarian Logistics

Forced Migration Review 18:Why Logistics?, Anisya Thomas (September 2003)The Academic Side of Commercial Logistics and the Importance of this Special Issue, Ricardo Ernst (September 2003)Humanitarian Logistics: Context and Challenges, Lars Gustavsson (September 2003)A Logistician’s Plea, John Rickard (September 2003)Towards Improved Logistics: Challenges and Questions for Logisticians and Managers, Donald Chaikin (September 2003)UN Joint Logistics Centre: A Coordinated Response to Common Humanitarian Logistics Concerns, David B Kaatrud,Ramina Samii and Luk Van Wassenhove (September 2003)The Central Role of Supply Chain Management at IFRC, Bernard Chomilier, Ramina Samii and Luk VanWassenhove (September 2003)The World Food Programme: Augmenting Logistics, Peter Scott Bowden (September 2003)Logistics Under Pressure: UNICEF’s Back to School Programme in Afghanistan, Paul Molinaro and Sandie Blanchet(September 2003)Coordination in the Great Lakes, George Fenton (September 2003)Lean Logistics: Delivering Food to Northern Ugandan IDPs, Margaret Vikki and Erling BratheimFood Aid Logistics and the Southern Africa Emergency, Jon Bennett, (September 2003)The Humanitarian Use of the Military, Rupert Wieloch (September 2003)Marrying Logistics and Technology for Effective Relief, H. Wally Lee and Marc Zbinden (September 2003)Humanitarian Mapping, Rupert Douglas-Bate (September 2003)Complex Emergency-Complex Finance, Guy Hovey and Diana Landsman (September 2003)

A P P E N D I X

Understanding Humanitarian Supply Chains 14

Forced Migration Review 22, Logistics Training: Necessity or Luxury, Anisya Thomas and MitsukoMizushima (January 2005)Asia-Pacific Development Review, Humanitarian Logistics: Matching Recognition with Responsibility, AnisyaThomas (June 2005)International Aid and Trade Review, Elevating Humanitarian Logistics, Anisya Thomas (January 2004)Forced Migration Review 21, Leveraging Private Expertise for Humanitarian Supply Chains, Anisya Thomas,(September 2004)

Fritz Institute

Fritz Institute addresses complex challenges in the delivery of humanitarian assistance to vulnerablepeople around the world by collaborating with the private and academic sectors to mobilize expertise,technology and resources. For additional information visit www.fritzinstitute.org.

Anisya S. Thomas, Ph.D.

A respected scholar, Dr. Thomas directs the global operations of Fritz Institute and its charge tostrengthen the infrastructures of humanitarian relief organizations. Her experiences in Asia, Europeand the U.S. have enabled her to delve into the dynamic social, economic and operational issues ofhumanitarian relief. An experienced consultant in strategic management, she also served as the co-founder and president of Tradami Logistics. Previously, Dr. Thomas was an associate professor ofstrategic management and international business at the Ryder College of Business Administration atFlorida International University and a visiting professor at the Stockholm School of Economics.

Laura Rock Kopczak, Ph.D.

Dr. Kopczak maintains an active consulting practice on Supply Chain Management, a field of businessin which she has over twenty years of experience. Until recently, she worked as a professor atStanford University and as co-director of the Stanford Global Supply Chain Management Forum. Dr.Kopczak has lived overseas in Japan and France and has taught in Switzerland, the Netherlands andHong Kong. Previous to working in academia, she worked ten years for Hewlett-Packard Company.

15 Understanding Humanitarian Supply Chains

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