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Humanitarian Logistics

It is easy to find resources to respond, it is hard to find resources to be more ready to respond BernardChomilier (Logistics and Resource Mobilization Department - WFP)

1. Introduction to Humanitarian Logistics In order to make it easier for everyone to understand what humanitarian logistics is, the paper will start with a short definition. We will further describe the branch of logistics which specializes in organizing the delivery and warehousing of supplies during natural disasters or complex emergencies to the affected area and people. Humanitarian supply chains appear to be the rising star within supply chain management. One reason why it may be so popular is that it takes focus away from the profit-maximization and cost-minimization that underpins so much of the supply chain literature elsewhere, thus making humanitarian logistics a humane and perhaps fashionable research strand that is politically correct in every sense. History has provided us with numerous cases in which good logistics had made the difference between life and death. In my opinion humanitarian chains are the noblestbreed of supply chains because they actually save peoples lives, hence justifying the need for quick action and attention to details. However, this type of supply chains is also the hardest to manage because of the unpredictable nature of natural disasters and emergencies. An extensive humanitarian relief community has developed since the Second World War. It includes multilateral agencies such as the United Nations High Commission for Refugees (UNHCR), and the World Food Programme (WFP)[1] which is supported entirely by voluntary contributions, mainly by governments both in cash and in kind, as well as a wide range of non-governmental organizations (NGOs) both national and international.

2. Key concepts of the humanitarian supply chain The various elements in the humanitarian supply chain, ranging from assessment right through distribution to monitoring and evaluation are presented in the image on the left. An accurate assessment depends on thorough planning, design and preparation. Under normal circumstances, the means for collecting the necessary data and information should be established as part of an organisation's pre-disaster planning. Planning and assessment are therefore very complementary.Assessments enable logisticians to understand the impact of a disaster on the environment and how the impact affects the population, and how the logistics services are to be provided. Procurement is a key activity in the supply chain. It can significantly influence the overall success of an emergency response depending on how it is managed. In humanitarian supply chains, procurement represents a very large proportion of the total spend and should be managed effectively to achieve optimum value. Procurement works like a pivot in the internal supply chain process turning around requests into actual products/commodities or services to fulfill the needs. It serves three levels of users:

1. The internal customer. 2. Programs in response to emergencies and ongoing programs. 3. Prepositioning of stocks, for both internal customers and program needs. In collaboration with the warehouse function, products/commodities are mobilized and delivered. In general, warehouses are focal points for product and information flow between sources of supply and beneficiaries. However, in humanitarian supply chains, warehouses vary greatly in terms of their role and 2

their characteristics. The global warehousing concept has gained popularity over the last decade as stock pre-positioning becomes one of the strategies for ensuring a timely response to emergencies. They are usually purpose built or purpose designed facilities operated by permanent staff that has been trained in all the skills necessary to run an efficient facility or utilising 3PL staff and facilities. For such operations, organisations use, information systems that are computer based, with sophisticated software to help in the planning and management of the warehouse. The operating situation is relatively stable and management attention is focused on the efficient and cost effective running of the warehouse operation. Numerous organizations have centralized pre-positioning units strategically located globally. Field warehouses are usually temporary in nature. They may be housed in a building which was not designed to be used as a warehouse or in a temporary building/structure, in mobile units such as rub halls, Wiikhalls and sometimes are little more than a tent in a field. The initial staff may be a casual workforce that has never worked in a warehouse before and the inventory system is more likely to be paper based. Often the situation is initially chaotic, sometimes dangerous coupled with a humanitarian need which may be very urgent. The management style must therefore be practical and action oriented with a focus on making the humanitarian goods available as quickly and efficiently as possible, but yet at the same time accountable. Transport management in emergencies is a complex task depending on the nature of the disaster. How it is structured is very dependent on the state of the infrastructure, security in the area of disaster, demand, nature of product etc. More and more, humanitarian organisations are beginning to tap into the joint transport services when they are offered by the Logistics Cluster during emergencies. The service is based on a collaborative approach and aims to leverage the advantages of centralised coordination and sharing of assets.

Fleet management is the function that oversees, coordinates and facilitates various transport and transport related activities. For example, vehicles involved in the movement of goods; the management of light vehicle fleets used in the transportation of people and light cargo; possibly motorbikes and other 3

equipment such as generators and warehouse handling equipment. Fleet management underpins and supports transport related activities through the management of the assets that are used. Effective fleet management aims at reducing and minimizing overall costs through maximum, cost effective utilization of resources such as vehicles, fuel, spare parts, etc. Cold chain management includes all of the means used to ensure a constant temperature (between +2C and +8C) for a product that is not heat stable (such as vaccines, serums, tests, etc.), from the time it is manufactured until the time it is used.It involves the equipment and people needed to keep vaccines at the correct temperature (between +2C to +8C) during transport and storage from the time they are manufactured up until they are administered. The cold chain must never be broken. Vaccines are sensitive to heat and extreme cold and must be kept at the correct temperature at all times. Also, knowledge of import and export procedures is a key part of the supply chain process. The Customs Department in most countries administers the customs and excise laws of a country through an approved legislation.Any goods coming in and going out of a country have to go through certain government control procedure and formalities. Humanitarian organizations are sometimes at an advantage during emergency responses since the United Nations often assumes the lead role in making appropriate arrangements with governments regarding quick access to emergency supplies The distribution chain or channel represents the movement of a product or service from the point of purchase to the time it is handed over to the final user/consumer. This may entail a chain of intermediaries passing the product down the chain within the organization before it finally reaches the consumer or enduser. Last but not least, controls are normally put in place to monitor weaknesses, poor designs in projects and improper implementation of programs. Based on continuous monitoring, these weaknesses or shortfalls against targets or objectives set can be corrected or revised in order to continually improve performance, thus reducing the risk of exposure and strengthening the response to needs. Monitoring and evaluation are integral parts of management and provide a link between planning and implementation. While monitoring focuses on the activities and outputs, evaluation focuses on the outcome and goals. Monitoring is initiated at the beginning of a programme, project or emergency response and built into the design, assessment and planning phases of the logistics aspect. It focuses on inputs and outputs and basically tracks and assesses implementation of the logistics aspect of the programme, project or emergency response. It is the continuous process of gathering logistics and programme information to measure against pre-set key performance indicators (KPI's), benchmarks or previously base-lined indicators that are aligned to the goals and objectives of the program. Evaluation, like monitoring, is a continuous process. The evaluation of the quality of the output should be undertaken in such a way that shortcomings can be identified and corrected. Evaluation should also feed into the planning process continuously so that the planned method of the intervention can be modified to take into account the realities and conditions on the ground. Evaluation provides a tool for management to ensure that focus is maintained. 3. The Functioning of the Humanitarian Supply Chain

Unlike most business supply chains, the humanitarian aid supply chain is often unstable. Sometimes, the supply chain breaks down at the receiving end (Munslow and Brown, 1999; Stewart, 1998; Byman, 2000), but it may also be unstable at its origin for two main reasons: politicized donations by governments and the competitive nature of fund-raising from private donors There is evidence of a frequent lack of planning in humanitarian supply chains, resulting in inefficiencies eg. Overuse of expensive and unsafe air charter, failure to pre-plan stocks, congestion caused by unplanned deliveries and a lack of inter-organizational collaboration for information systems. Nevertheless, steps are taken to anticipate events. When disasters strike, the agile support chains of relief organizations play the most important role. Unfortunately, there is a trade-off between speed, cost, accuracy and the type and number of goods that are being delivered. 3A) Speed First of all, speed is very important both in business and in disaster relief supply chains. Beneficiaries always expect a speedy response to their needs. Donors and governments, who constantly thrive to increase their profile in the international arena, are competing with their peers to reach the scene before the event. The media is playing their game, as journalists are the ones who broadcast the first rescuers to arrive at the disaster-scene. However, exclusively putting speed on the first place may be dangerous since Speed without quality may come back and bite you. It is always of utmost importance to be prepared before the disaster strikes. Therefore, relief organizations strategy is to work hard during disasters, but work harder between disasters. In order to ease imagining a humanitarian supply chain, we provided a graph showing the usual flows downstream the supply chain from the Government donor to the end recipient of the aid.

Figure 1: A Typical Humanitarian Supply Chain First of all, some key variables need to be determined: the type and quantity of the resources, the way of procurement and storage of the supplies, tools of tracking and means of transportation available to the stricken area. It is also very important to have specialized teams ready to participate in the operations and to be able to assure proper coordination between all available teams. Once the Government Donor donates cash/goods/etc., the supplies go in the direction of an International Agency which further distributes the supplies to several International NGOs. Each of these NGOs has 5

contacts in several countries so it is their responsibility to further direct the supplies to local NGOs. The local NGOs are aware of the local necessities and therefore they cooperate with their local partners, supporting the community-based organizations. Coordination of the delivery of goods, organization of teams, supplies and equipment movement is realized by mobilization centers, which are located near the affected region. A way of taking precautions before the disaster occurs is to organize emergency response plans which will help preparation and consequently mobilization in the time of the disaster. Commercial supply chains focus on the final customer as the source of income for the entire chain. However, in humanitarian supply chains the end user (the recipient or consumer of aid) seldom enters into a commercial transaction and has little control over supplies. Instead, customer service or marketing of the humanitarian service may need to target the supplier/donor, who has to be convinced that humanitarian action is taking place. For example, there may be greater humanitarian visibility in providing food or medicine before basic logistical equipment such as forklifts, although the latter may be necessary for effective delivery of the former. 3B) Agility Agility has been defined as the ability to thrive and prosper in an environment of constant and unpredictable change (Maskell, 2001); as all about customer responsiveness and mastering market turbulence (Van Hoek, 2001); and as a business-wide capability that embraces organisational structures, information systems, logistics processes and, in particular, mindsets (Christopher and Towill, 2000). The issue of customer responsiveness is problematic when considering the humanitarian supply chain. As stated earlier, the customer to be satisfied in the humanitarian supply chain is in effect the donor. Therefore, agility in the context of humanitarian supply chains must address the unstable nature of funding (Bennett and Kottasz, 2000), where institutions such as charities are regularly required to raise large amounts of money at short notice to provide emergency assistance. Concern by donor governments for certain aid to be used for specific relief operations in particular countries drives humanitarian organisations to focus on short term direct relief and distribution, rather than long term investment in logistics systems and processes. International humanitarian supply chains are clearly unpredictable, turbulent, and requiring flexibility, and therefore insights are to be gained from assessing their potential as agile supply chains. Figure 2 on the following page presents this issue. The shaded areas in Figure 2 are where academic supply chain research can play an important role in concept development. The following discussion considers some of the issues relevant to Figure 2. The decoupling point is where a product in the supply chain ceases to be forecast-based and becomes a specific customer order (Van Hoek, 1997), or where market pull meets upstream push Christopher and Towill (2000). The latter suggest that there are two decoupling points: for strategic inventory, maintained in a generic form as far downstream as possible (the principle of postponement); and for demand information, which should move as far upstream as possible. They propose that the proper location of decoupling points for material and information flows can produce a hybrid supply chain that combines a lean and efficient supply upstream and an agile and effective supply downstream.

Figure 2: An Agile Supply Chain Applying this principle, the humanitarian supply chain at the level of the international donor in developed countries should be lean for upstream activities such as needs assessment (remote demand forecasting), mobilisation of sufficient financing, people, skills and goods, procurement, transportation sourcing, disaster preparation and planning and related upstream supply chain activities. Since the introduction of the concept of leanness (Womack, 1990; Womack and Jones, 1994), different authors have adopted varying interpretations of the lean supply chain approach (Lamming, 1996; New and Ramsay, 1997). This research note adopts the definition of Lamming (1996, p. 184) of value-adding processes unencumbered by waste. However, upstream activities in the humanitarian supply chain are usually lauded for their agility. For example, credit is given to the speed with which a particular appeal can be instituted, and how generously and quickly donors can respond to a one-off event. Attraction of donors to a cause is largely based on such agility appeal, and it may prove difficult to convince donors of the desirability of the routines and procedures necessary for longer-term supply chain efficiency and the waste elimination associated with leanness, but which have low media impact.

4. Inventory pre-positioning A logistical technique which can improve responsiveness is inventory pre-positioning. This technique is used for estimating item quantities required according to specific safety stock levels and order frequency, or for searching optimal locations for warehouses using specific facility location calculations. Success and performance in humanitarian relief chains is very difficult to measure because of some distinct characteristics that humanitarian operations have, such as very unpredictable demand, difficulty to obtain data from operations, unpredictable working environment, lack of incentive for measurement(due to their non-profit character), very short lead time and unknown variables, like geography, political situation or weather. The inability of international humanitarian organizations to make particular relief items available is critical for many suffering people. Therefore, pre-positioning aims to position supplies or other resources at or near places where they are likely to be required. As a form of advanced planning, pre-positioning occurs in both military (Chilcoat and Henderson, 1994) and humanitarian logistics. The concept of postponement, which is in some respects the opposite of pre-positioning, has been associated with the decoupling points of supply chains in various articles (e.g. Van Hoek, 2001; Christopher and Towill, 2000). Postponement is intended to reduce the anticipatory risk of logistics, postponing commitment of inventory (both in form and in time) until customer orders are received (Bowersox and Closs, 1996). Applying effective demand-led inventory management through the principle of postponement may prove a cost-effective substitute for pre-positioning, enabling assignment of relief supplies to be as rapid as appropriate. These supplies, held as generic strategic inventory, are then distributed according to the evolving needs of the end users. The postponement of commitment of inventory to final delivery results in the use of more accurate data and reliability of information about recipients' immediate needs. Maintenance of generic inventory may also help overcome security risks, including the risk of diversion away from aid recipients or the potential for violence. The generic stock should be converted into recipient-specific deliveries in an agile way. Site selection planning and decision making derives from information input by local people regarding, for example, accessibility, terrain, weather and available facilities. The principle of postponement as a field level supply chain strategy should have a positive impact on the speed of response and flexibility, and thus agility in meeting the changing needs of end users. The humanitarian supply chain, through an effective information infrastructure and sensitive needs assessment mechanism at the field level, would enhance supply chain agility by being very responsive to the changing needs of end users, and by being able to respond almost immediately to those changes. The agile supply chain is capable of responding to real demand as it is demand driven and activated with a feed forward mechanism (Chandra and Kumar, 2001) from the field for data on actual end user requirements. The need and scope for remote forecasting of needs in the international donor countries would be much diminished, hence waste and costs from inaccurate forecasting and forecasting errors are reduced. The humanitarian supply chain thus becomes more information-based.

5. Available software Today in the logistics department of the International Federation of Red Cross and Red Crescent Societies (IFRC), software that was co-developed with the Fritz Institute makes it possible to capture the necessary data which will inform the IFRC of their supply chains performance. Given its exclusively humanitarian mission and its presence at the national and regional level, IFRC generally enjoyed easier access to some countries than the UN organizations. As another operations manager explained, We are smaller, often more discreet, easier to handle and less bureaucratic than the UN. Plus UN is not only a humanitarian organization but also a political one. Technology is a key factor to achieve better results in disaster logistics. Implementing up-to-date information or tracking systems and using humanitarian logistics software which can provide real-time supply chain information, organizations can enhance decision making, increase the quickness of the relief operations and achieve better coordination of the relief effort. Biometrics for identifying persons or unauthorized substances, wireless telecommunications, media technology for promoting donations, and medical technologies are some more aspects of technology applied in humanitarian operations.

To conclude...
The integration of the supply chain is critical to the success of a global, responsive and agile humanitarian supply chain. The integration of internal capabilities and processes of organisations in the supply chain enhance the agility of the supply chain. However, the development of a more complex supply chain system to increase agility may add to the complexity of the problems encountered.There is little time to reflect on and improve supply systems, and therefore the lessons learnt from one disaster to the next are often lost (Van Wassenhove and Samii, 2003). Logistical experience is difficult to transmit from one field situation to the next. The nature of humanitarian personnel, their diverse backgrounds and the organisational climate in many humanitarian organisations act against process integration. A survey of 45 international aid organisations found that over 80 per cent of all respondent organisations had a member of staff specialising in logistics and transport duties, but only 45 per cent had someone with a formal qualification in logistics, transport or related areas (Oloruntoba and Gray, 2003). Nevertheless, there are positive aspects in the development of the humanitarian supply chain, particularly in logistics. In major international humanitarian operations there is a general tendency towards more coordination and asset management, and less duplication of effort. Although there will always be elements of chaos in the immediate days after a suddenonsetdisaster, there is reason to look to the future with optimism. The development of information technology systems that can provide visibility to the disaster relief supply chain is a huge step forward for the humanitarian sector as a whole. As more organizations begin to adopt and implement these systems and this visibility is established, the use of keyperformance indicators will then become essential to further enhance the efficiency and effectiveness of these supply chains. By clearly defining operational targets and measuring actual performance to these targets, organizations will be better able to retain the lessons they learned from each operation and provide a higher level of service to their beneficiaries in the future.

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