lecture 2: commercial vs. humanitarian supply chains · table: characteristics of commercial versus...

Lecture 2: Commercial vs. HumanitarianSupply Chains

Professor Anna Nagurney

John F. Smith Memorial Professorand

Director – Virtual Center for SupernetworksIsenberg School of Management

University of MassachusettsAmherst, Massachusetts 01003

SCH-MGMT 597LGHumanitarian Logistics and Healthcare

Spring 2017c©Anna Nagurney 2017

Professor Anna Nagurney SCH-MGMT 597LG Humanitarian Logistics and Healthcare

A Graphic of a Humanitarian Supply Chain

A Graphic of a Humanitarian Supply Chain

Source: Emergency Relief Logistics (ERL), A.-J. Morrison, B. Forbes, and R. McPherson


Fighting Ebola in West Africa – Samaritan’s Purse

Click on underlined text for Samaritan’s Purse video

Image courtesy of BBC News

Note the logistical issues in the video.


http://www.samaritanspurse.org/article/fighting-ebola-in-west-africa/

Fighting Ebola - What About a Recent Vaccine?

According to Bayer (2017), while an experimental Ebola vaccinehas been shown to be 100% effective in preliminary trials, theWorld Health Organization (WHO) has warned that it cannot beused as a preventative vaccine and it is unknown if it is safe forchildren, pregnant women, or some other populations. Alsounknown is how long it lasts.

The new genetically engineered vaccine, which the WHO has beendeveloping for 15 years, was recently tested on nearly 12,000people in Guinea. None of those who had been vaccinated with theexperimental vaccine contracted Ebola, although 23 other peoplein the area who were not vaccinated contracted the disease.

Another issue is that there are different strains of Ebola, whichmeans that vaccines that work against one strain of Ebola may notwork against another.


The Stakeholders in Humanitarian Logistics

The Stakeholders

Source: A. Thomas, 2003. Humanitarian logistics: Enabling disaster response, Fritz Institute.


Snapshot of Select Humanitarian Organizations


Notes:

(1) Shown in U.S. dollars. Exchange rates from US$ to Euros as of year-end for 2000 is $1 = 1.0747 Euros, and for2001 is $1 = 1.1047 Euros. Source: IMF(2) Contributions refers to donations to humanitarian organizations by governments, foundations, otherhumanitarian organizations, individuals, and the private sector(3) As per most recent annual report(4) American Red Cross total contributions exclude revenue from products and services(5) World Food Programme receives 54% of food contributions in the form of GIK

(6) World Vision International’s 2000 financial statements are not available online. WV USA’s contributions for

2000 totaled $469.1M


Top 10 Donors in 2002

Top 10 Donors in 2002



Commercial versus Humanitarian Supply Chains

Table: Characteristics of Commercial versus Humanitarian Supply Chains

Commercial Supply Chain Humanitarian Supply ChainWhat is “Demand?” Products Supplies and PeopleDemand Pattern Relatively stable, predictable. Demands Demand generated from random events

occur at fixed locations in set quantities. that are unpredictable in terms of timing,

type, and size. Demands estimated

after they are needed, based on

assessment of disaster characteristics.

Inventory Control Uses well-defined methods for Inventory control is challenging due to

determining inventory levels based high variations in lead times, demands,

on lead time, demand and target and demand locations.

customer service levels.

Lead Time Lead time determined by the Zero time between the occurrence of the

Supplier-Manufacturer-DC-Retailer-chain. demand and the need for it.




Commercial Supply Chain Humanitarian Supply ChainNetwork Configuration There exist methods for supply Challenging due to the nature of unknowns

chain network design. (locations, type and size of events, politics,

culture) and “last mile” considerations.

Information Systems Typically, well-defined, making Information is often unreliable, incomplete,

use of advanced technology or non-existent.

Performance Historically, focused on resource Primary focus on output performance

Measurement System performance measures, such as measures, such as the time required to

maximizing profit or minimizing respond to a disaster or ability to meet the

costs. needs of the disaster victins.




Commercial Supply Chain Humanitarian Supply ChainStrategic Goals Usually, to produce high quality Minimize the loss of life and alleviate

products at low cost in order suffering.

to maximize profitability and achieve

customer satisfaction.

B. M. Beamon, 2004. Humanitarian relief chains, issues and challenges, Proceedings of the 34th International

Conference on Computers & Industrial Engineering, pp. 77-82.


The Disaster Management Cycle Phases

Disaster management can bedepicted as a cycle withseveral phases:

• Pre-disaster, we concentrate onmitigation and preparedness.

• During the Disaster phase weare concerned with the response.

• During the Post-disaster phasewe focus on the recovery.


Pre-Disaster Phase: Mitigation and Preparedness

Assessment:• Identify risk factors.

• Assess vulnerabilities.

Planning:• Evaluate infrastructure.

• Pre-position resources.

• Conduct capacity building.

• Engage policy makers.

Training and Education:

• Make sure that those who needto know – know.


Disaster Phase: Response

Relief Operations:

• First Phase: medicines, water,food, shelter

• Second Phase: housing,restoring food supply chains,construction

Stages of LogisticsOperations:

• Mobilization and procurement

• Long haul

• The last mile


Disaster Preparedness and Response Video UCTV

Click on underlined text for disaster preparedness and responsevideo.Disaster Preparedness and Response Video UCTV


http://www.youtube.com/watch?v=sg8-Ouxu-2o

Post-Disaster Phase: Recovery

Reconstruction:

• Cleaning up of debris

• Rebuilding of infrastructure

• Re-establishing communities

Evaluation:

• Measuring the effects ofdisaster on:• • planning, response, andinfrastructure

Identifying lessons learned:

• Providing feedback to planningand response authorities.


United Nations Cluster Approach


The United Nations Cluster Approach

The UN Cluster Approach organizes humanitarian relief into anumber of specialist clusters with a predefined leadership tostrengthen overall response capacity and to improve the overalleffectiveness of the response by (United Nations OCHA, 2005):

1. Ensuring sufficient global capacity is built up and maintained inall the main sectors/areas of response, with a view to ensuring timelyand effective responses in new crises.2. Providing predictable leadership in all the main sectors/areas ofresponse.3. Developing/designing approaches around the concept ofpartnerships/clusters between UN agencies, internationalorganizations and NGOs.4. Strengthening accountability by making cluster leads answerable atthe global level for building up a more predictable and effective responsecapacity and at the field level, for fulfilling agreed roles/responsibilities.

5. Improve strategic field-level coordination and prioritization in

specific sectors/areas of response by placing responsibility for leadership

and coordination with the competent operational agency.



The UN Cluster Approach organizes humanitarian relief into anumber of specialist clusters with a predefined leadership tostrengthen overall response capacity and to improve the overalleffectiveness of the response by (United Nations OCHA, 2005):1. Ensuring sufficient global capacity is built up and maintained inall the main sectors/areas of response, with a view to ensuring timelyand effective responses in new crises.

2. Providing predictable leadership in all the main sectors/areas ofresponse.3. Developing/designing approaches around the concept ofpartnerships/clusters between UN agencies, internationalorganizations and NGOs.4. Strengthening accountability by making cluster leads answerable atthe global level for building up a more predictable and effective responsecapacity and at the field level, for fulfilling agreed roles/responsibilities.






The UN Cluster Approach organizes humanitarian relief into anumber of specialist clusters with a predefined leadership tostrengthen overall response capacity and to improve the overalleffectiveness of the response by (United Nations OCHA, 2005):1. Ensuring sufficient global capacity is built up and maintained inall the main sectors/areas of response, with a view to ensuring timelyand effective responses in new crises.2. Providing predictable leadership in all the main sectors/areas ofresponse.

3. Developing/designing approaches around the concept ofpartnerships/clusters between UN agencies, internationalorganizations and NGOs.4. Strengthening accountability by making cluster leads answerable atthe global level for building up a more predictable and effective responsecapacity and at the field level, for fulfilling agreed roles/responsibilities.






The UN Cluster Approach organizes humanitarian relief into anumber of specialist clusters with a predefined leadership tostrengthen overall response capacity and to improve the overalleffectiveness of the response by (United Nations OCHA, 2005):1. Ensuring sufficient global capacity is built up and maintained inall the main sectors/areas of response, with a view to ensuring timelyand effective responses in new crises.2. Providing predictable leadership in all the main sectors/areas ofresponse.3. Developing/designing approaches around the concept ofpartnerships/clusters between UN agencies, internationalorganizations and NGOs.

4. Strengthening accountability by making cluster leads answerable atthe global level for building up a more predictable and effective responsecapacity and at the field level, for fulfilling agreed roles/responsibilities.






The UN Cluster Approach organizes humanitarian relief into anumber of specialist clusters with a predefined leadership tostrengthen overall response capacity and to improve the overalleffectiveness of the response by (United Nations OCHA, 2005):1. Ensuring sufficient global capacity is built up and maintained inall the main sectors/areas of response, with a view to ensuring timelyand effective responses in new crises.2. Providing predictable leadership in all the main sectors/areas ofresponse.3. Developing/designing approaches around the concept ofpartnerships/clusters between UN agencies, internationalorganizations and NGOs.4. Strengthening accountability by making cluster leads answerable atthe global level for building up a more predictable and effective responsecapacity and at the field level, for fulfilling agreed roles/responsibilities.






The UN Cluster Approach organizes humanitarian relief into anumber of specialist clusters with a predefined leadership tostrengthen overall response capacity and to improve the overalleffectiveness of the response by (United Nations OCHA, 2005):1. Ensuring sufficient global capacity is built up and maintained inall the main sectors/areas of response, with a view to ensuring timelyand effective responses in new crises.2. Providing predictable leadership in all the main sectors/areas ofresponse.3. Developing/designing approaches around the concept ofpartnerships/clusters between UN agencies, internationalorganizations and NGOs.4. Strengthening accountability by making cluster leads answerable atthe global level for building up a more predictable and effective responsecapacity and at the field level, for fulfilling agreed roles/responsibilities.



and coordination with the competent operational agency.Professor Anna Nagurney SCH-MGMT 597LG Humanitarian Logistics and Healthcare

The Cluster Concept

The cluster concept is designed to apply to all humanitarianUN bodies, as well as national and international NGOsinvolved in the provision of disaster relief. Essentially, anyhumanitarian organization which has the capacity can lead acluster and organizations working in the field may find themselvescontributing to a number of clusters.

The InterAgency Standing Committee (IASC), which is designatedas the primary mechanism for interagency coordination ofhumanitarian assistance, has defined global clusters in elevenfunctional areas of humanitarian activity, with associated leadorganizations.


Humanitarian Logistics Specific Challenges Today

Specific Challenges:

• Climate change

• Urbanization trends – now more than half of the world’spopulation lives in cities

• Diseases are spreading at increasing speeds because of global airtravel and increased population densities

Effects on Disasters

• Increasing severity

• Increasing frequency – It is estimated that over the next 50 yearsnatural and man-made disasters will increase five-fold (Thomasand Kopczak (2007)).

• Complexity


Figure: Impacts of climate change on transportation infrastructure


Recent Billion Dollar US Weather Disasters


Supply Chain Disruptions and Humanitarian Logistics

Video lecture by Dr. Yossi Sheffi and Dr. Jarrod Goenztel ofMIT on the impact of the Fukushima triple disaster on commercialsupply chains globally and also on the need for humanitarian relief.

Sheffi is the author of The Resilient Enterprise.


https://www.youtube.com/watch?v=ky_h4YB_O4U

U.S. Natural Disasters in 2012

As reported in the USA Today, the U.S. had the world’s toptwo costliest natural disasters in 2012, according to a reportreleased by global reinsurance firm Aon Benfield, based inLondon.

The largest global disasters of 2012 were Hurricane Sandy(with a cost of $65 billion) and the year-long Midwest/Plainsdrought ($35 billion), according to the company’s AnnualGlobal Climate and Catastrophe Report, which was preparedby Aon Benfield’s Impact Forecasting division.


U.S. Natural Disasters in 2012

Sandy and the drought accounted for nearly half of the world’seconomic losses but, owing to higher levels of insurance coveragein the U.S., 67% of insured losses globally, the report states. Totaleconomic losses include the entire cost of an event, while insuredlosses are the amount of economic losses that are covered byinsurance.

The U.S. alone accounted for nearly 90% of all the world’sinsured losses in 2012. In addition to the drought and Sandy,several severe weather events and Hurricane Isaaccontributed to this total.


References

⇒ A. Bayer, 2017. New Ebola vaccine can’t be used for prevention, WorldHealth Organization warns. INQUISITR, January 6.

⇒ B. M. Beamon, 2004. Humanitarian relief chains, issues and challenges,Proceedings of the 34th International Conference on Computers &Industrial Engineering, pp. 77-82.

⇒ A. Thomas, 2003. Humanitarian logistics: Enabling disaster response,Fritz Institute.

⇒ A. S. Thomas and L. R. Kopczak, 2005. From logistics to supply chainmanagement: The path forward in the humanitarian sector, FritzInstitute.

⇒ A. Nagurney and Q. Qiang, 2009. Fragile Networks: IdentifyingVulnerabilities and Synergies in an Uncertain World, John Wiley & Sons,Hoboken, New Jersey.

⇒ G.P. Ramsden, 2014. Managing the Humanitarian Supply Chain - ACollaborative Approach? PhD thesis, University of Lincoln, England.


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