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Supply Chain Management in Disaster Management

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ABSTRACT: Disasters recently received the attention of the operations


research community due to the great potential of improving disaster-related
operations through the use of analytical tools, and the impact on people that
this implies. In this introductory article, we describe the main characteristics
of disaster supply chains, and we highlight the particular issues that are
faced when managing these supply chains. We illustrate how operations
research tools can be used to make better decisions, taking debris
management operations as an example, and discuss potential general
research directions in this area.

Keywords: humanitarian logistics; disasters; public sector OR

1.0 INTRODUCTION

From improving the performance of fire and police departments, optimizing the
public transportation system, programming delivery of blood to hospitals, planning
housing projects, analyzing drug policies, to improving delivery of meals to senior
citizens, there are many examples of how operations research (OR) addresses
community needs. Public sector OR deals with solving public interest problems
through the application of analytical tools. One of the public sector OR application
areas is humanitarian OR, which particularly deals with the problem of delivering
relief to people affected by a disaster. Hence, natural and man-made disasters
are the most common subject of attention for humanitarian OR.

There were 6637 natural disasters between 1974 and 2003 worldwide, with more
than 5.1 billion affected people, more than 182 million homeless, more than 2
million deaths, and with a reported damage of 1.38 trillion USD (Center for
Research on the Epidemiology of the Disasters (CRED)). In 2005 alone, over
180,000 deaths and 200 billion USD economic losses have occurred due to
disasters according to the Disaster Resource Network Humanitarian Relief
Initiative (HRI). The September 11 attacks (2001), tsunami in South Asia (2004),

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Hurricane Katrina (2005), and earthquakes in Pakistan (2005) and Java (2006)
are just some examples of the deadliest disasters witnessed by humankind in the
past few years.

The consequences of these events are enormous, not only in the short term with
injuries, loss of life, and damaged infrastructure but also in the long term with
changes in social and economic conditions. Even though the occurrence of these
events could not have been avoided, the impact could have been reduced by
different means including humanitarian OR. For example, adequate warning
systems could have prevented injuries and fatalities during the 2004 tsunami and
help could not reach Pakistani earthquake victims due to logistics difficulties with
limited infrastructure. Humanitarian OR differs from other OR applications
because it deals with particularly unique and highly variable events, often in
resource-poor and limited infrastructure environments, with multiple organizations
trying to work together in response activities simultaneously. These factors
increase the complexity of responding to these events.

The focus of this article is on supply chain-related issues in humanitarian


operations, with a greater focus on “disasters” rather than ongoing conditions. We
discuss differences between regular supply chains (SCs) and SCs used for
disaster planning and response, “humanitarian SCs”. First, we describe
characteristics of supply and demand of disaster SCs, followed by a discussion
on the particularities of the execution and management of these SCs. Next, an
application of OR in humanitarian operations is examined in more detail, and
finally main challenges and future research directions are presented.

2.0 OVERVIEW OF DISASTERS

Disasters can be grouped into two main categories: natural and man-made
disasters. Natural disasters are the consequences of natural hazards that
affect people, whereas man-made disasters are caused by human actions. A
more detailed categorization of disasters is shown in table below along with
examples. Also, disasters could be categorized in predictable timing (or
seasonal) such as floods or unpredictable timing like earthquakes and
predictable location such as hurricanes or unpredictable locations like
tsunamis.

Man-made Natural

Political crisis,
Slow onset Famine, drought
Refugee crisis
Hurricanes, flood,
Terrorists attacks,
Sudden onset earthquakes,
chemical leaks
tsunamis
No matter the type of disaster, the management of these events typically
follows four sequential stages: mitigation, preparedness, response, and

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recovery. Mitigation is the application of actions to help prevent or reduce the
hazards of the disaster. It differs from the other stages because it focuses on
long-term measures for reducing or eliminating risk. Preparedness activities
help prepare for response once a disaster occurs. The response phase
covers activities for mobilizing emergency responders and services for the
affected region. Recovery is the stabilization phase during which restoration
of the disaster area is conducted in the long term. The disaster management
timeline with the related operations can be seen in figure below.

There has been some research on the use of OR techniques in disaster


management. Altay and Green survey the literature and summarize the
research in this area. Most of the papers published deal with man-made
disasters (47.6%) or general disaster operations management (40.5%).
Among the papers reviewed, 61.1% is on the pre disaster phase (mitigation
and preparedness) and mostly based on risk analysis, 23.9% on response,
and only 11% about recovery. More than half of the research is based on
model development, followed by theory and application development. Most of
the application studies are made for the disaster phase, whereas the theory
papers mostly focus on the pre disaster phase.

3.0 SUPPLY

The primary role of a supplier in an SC is to source the required items


downstream. The main sources in a humanitarian SC are vendors and
donors. Vendors can be local to the region where the disaster occurred or
global. Donors are the sources of donations of any type (financial, products,
services, etc.).

Supplies consist of relief items, personnel/volunteers, and transportation and


construction resources, among others. Most of the supplies fall into the relief

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items category. Figure shows a categorization for relief items, as well as
some examples. Consumable relief items require recurrent delivery to the
affected community and non-consumable relief items require a one-time
delivery only. Non-consumable operational relief items are required to set up
an operation, while nonoperational are required to meet the essential needs
of the affected population.

Relief Items

Consumable Non-Consumable

Operational Non-operational
Water

Computers Texts
Food

Radios Kitchen kits

Hygiene
products Cellular Water
phones purification
kits
There are specific challenges related to supplies that come from in-kind
donations. First, since the quantity and mix of the supplies depend at least to
some degree on the donor, there is a high uncertainty of what is going to be
received. Moreover, the timing of these supplies might not be appropriate: for
example, consumables that arrive too early and cannot be stored for a long
time or nonconsumables that arrive after the operation was set up are
wasted. There are many cases in the recent history where donated items
were not needed and were not deployed to people affected by the disaster.
Autier et al. discuss the case of drug supplies after the 1988 Armenian
earthquake, when at least 5000 tons of drugs and consumable medical
supplies were sent by international relief operations, but only 30% were
immediately usable (sorted, relevant for the emergency situation, and easy to
identify), and 20% of these supplies had to be destroyed by the end of 1989.
Unsuitable donations caused bottlenecks in the SC, making storage and
transportation processes more inefficient.

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Donations place additional complications on the procurement process, since
it is difficult to define what will come from donors and what will have to be
sourced from vendors. But even if donations are not considered, the
procurement process is by itself a challenging task. Supply availability is
highly dependent on the location. Organizations often have a low visibility into
existing inventory. Control of inventory is usually given to country offices,
resulting in excess supplies in some locations and scarcity in others. The
selection of suppliers during the procurement process includes not only total
cost versus quality, response time, and reliability trade-offs but also considers
less measurable factors like activating local economies by choosing a local
provider. Developing contracts with suppliers is difficult given the uncertainty
of the type, quantity and timing of items required, and the available budget.
Also, there is competition for supply sources when there are local or
international nongovernmental (nonprofit) organizations (NGOs) sharing
similar relief objectives; further there is lack of coordination among them.

Challenges faced while sourcing from donors or vendors after the event
occurs may affect supply availability. The shortage of supplies may cause
emergency response to be ineffective and result in increased human
suffering. Hence, it is important to develop strategies to accelerate supply
response or deal with unpredictability of demand. One strategic initiative that
has been recently implemented by several humanitarian organizations is the
prepositioning of inventory instead of procurement after the fact.
Prepositioning allows not only faster response but also better procurement
planning and an improvement on distribution costs; however, it requires an
additional investment before the event occurs, and funds are more difficult to
obtain.

In summary, the supply process in a humanitarian SC is different from regular


SCs. Supply in regular SCs follows a standardized order fulfillment process,
while in the case of disasters a portion of supplies comes from voluntary
donations. Also, since humanitarian SCs are often in resource-poor
environments, supply may be especially variable. Greater certainty on the
supply quantity, location and time; longer relationships with suppliers; and
information about the suppliers available at the location of interest before
decisions are made allow better procurement contracts for normal SCs.
Finally, when common supply deals with routine events and not a one-time
disaster event, developing a procurement “expertise” is easier.

4.0 DEMAND

The customers in a disaster SC include the population at the affected area,


as well as intermediate customers at local or global storage facilities. Their
needs change significantly according to disaster types and the phases in the
disaster timeline. In the pre disaster phase, protection-based items such as
batteries and flashlights are highly demanded both by the people and local
stores for preparation, while immediately after the disaster, the high demand

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changes to first response items such as drugs, medicine, food, water, and
shelter. Long-term recovery items such as infrastructure repair and
construction equipment are among the items needed during the post disaster
period.

The demand patterns are also different in each phase. The pre disaster stage
consists of planning processes that are mostly based on forecasts, so the
demand is not certain. Once a disaster hits, demand becomes complex: high
and quickly changing, but more certain based on the reported needs that are
sent eventually by the assessment team in the disaster area. During the post
disaster period, demand again stabilizes and becomes more predictable with
the real data from the region. Overall, demand structure of disasters is
complicated and challenging because of the high unpredictability of its three
main dimensions: time, location, and magnitude. Also, disaster demand has
other drivers related to those dimensions such as population characteristics,
economy, political conditions; these factors are also complex to formulate.

Dependency of demand in disasters on these hard-to-measure factors and its


high uncertainty are the main differences from the demand in regular SCs.
Unlike logisticians in the private sector, humanitarian workers are always
faced with the unknown: when, where, what, how much, where from, and how
many times; in short, the basic parameters needed for an efficient SC setup
are highly uncertain. Disaster demand forecasting is also difficult due to the
lack of historical data. Even though there do exist some databases from the
past experiences prepared by both NGOs and governments such as the
EMDAT: Emergency Events Database by the Center for Research on the
Epidemiology of Disasters, they are occasionally inadequate because of
inconsistent and/or insufficient data collection and reporting problems.
Additionally, disasters are unique even if they occur in the exact same
location, since other factors such as population structure or economic
conditions could have changed since the previous occurrence. Hence,
historical data is not always very useful for predicting future demand.

5.0 DISASTER SUPPLY CHAIN

SCs link the sources of “supply” (suppliers) to the owners of “demand” (end
customers). In a typical humanitarian SC, governments and NGOs are the
primary parties involved. Governments hold the main power with the control
they have over political and economical conditions and directly affect SC
processes with their decisions. After the 2004 tsunami, for instance, the
Indian government did not invite international aid agencies to participate at all
in the first 60 days of the relief effort, and functioned during that period with
the local sources of supplies. Donors, military, and the media are the other
significant players in the humanitarian SCs.

5.1 Disaster Supply Chain Management

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SC management is the process of planning and controlling the operations of
the SC by coordinating the different parties involved in the process of fulfilling
customer demand efficiently.

Coordination and management of disaster SCs has challenging problems.


The supply network is huge and complicated with numerous players (donors,
NGOs, government, military, and suppliers), and it is hard to coordinate all of
them along with all the items that need to be delivered. Despite the different
cultural, political, geographical, and historical differences among them,
collaboration and specialization of the tasks between NGOs, military,
government, and private business are increasingly needed in the
humanitarian SCs. Despite being experienced and aware of the key points in
humanitarian SCs, people in charge of logistics and SC management in most
NGOs or other humanitarian organizations are not often specialized in this
area; thus, they are not experts in the tools for solving the problems that
might occur during the operations. There could also be domestic barriers
such as the need of excessive paper work and specific policies of the region
that may cause additional delays, as well as external complications due to
foreign relations.

Use of technology is essential in managing SC operations and maintaining


coordination, but the organizations usually do not use specific software or
other technology tools for SC management. The case study written for the El
Salvador earthquake in 2001 focuses on coordinating the logistics and SC
operations using humanitarian relief supplies management software called
SUMA. SUMA’s objective is “to develop a standardized methodology and
operational capacity at the national or regional level to manage relief supplies
and equipment efficiently”. The implementation of this software allowed the
identification of urgent needs, helped prevent unsolicited donations that could
upset the system, and created reports with centralized information to inform
the population about the development of the operations, building visibility and
transparency through the SC.

Finally, goals and performance metrics of humanitarian and regular SCs differ
notably. Unlike the humanitarian SCs, which do not have any profit targets
and rely heavily on volunteers and donors, in regular SCs, stakeholders are
the “owners” of the chain. A company has to improve its profits and aims for
making more money. It is easier to prove success using profit data in private
SCs, but how to prove success is not clear for humanitarian SCs because
cash flow data may not fully explain results. Nevertheless, the numerous
models based on minimizing cost (or equivalently, maximizing profit) for
building efficient SCs can be applied to the humanitarian SCs directly or with
modifications. One example is an integrated multiobjective SC model that
uses fill rate, cost, and flexibility as measurement factors for simultaneous
strategic and operational SC planning. Lodree and Taskin work on stochastic
production/inventory control models for recovery planning, specifically for

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hurricanes, to determine how long to postpone decision making to optimize
the trade-off between logistics cost efficiency and hurricane forecast
accuracy.

5.2 Disaster Supply Chain Execution

The execution or delivery process in an SC consists of bringing supply and


demand together. Delivery could mean different things at each disaster stage,
such as setting up temporary warehouses or shelters during the pre-event
stage or delivering relief to affected people during the response stage.

Distribution operations within a disaster framework are very challenging.


Owing to the complexity of the sourcing process and the uncertainty of
demand, there could be a big gap between supply and demand in terms of
mix, quantity, timing, and location, and matching them becomes a hard task.
Handling expertise becomes more challenging due to the large span of relief
items and the use of ad hoc warehouses. Transportation infrastructure is
highly dependent on the location; it may be damaged or disrupted and suffer
from dynamically changing conditions. Additionally, communication
infrastructure may be disrupted. Because of the sudden onset of most
disasters, problems associated with inadequate distribution planning are
common, including high expediting costs, choice of wrong transportation
mode and/or provider, bottlenecks in the port of entry, and incomplete
execution. Hence, preparation during the pre-event stage is vital, and
strategies such as the use of staging areas for prepositioning and distribution
of relief supplies help overcome the difficulties in getting the right supplies to
the right people, at the right time, at the right place.

Humanitarian SC delivery operations may have different targets than for-profit


SCs. Usually, there is a trade-off between cost and responsiveness of the
delivery process. In the case of disaster SCs, responsiveness concerns
human welfare, and it has a higher priority compared to operational cost than
regular SCs. Since every human life is equally valuable, fairness is a
particularly important criterion for disaster SCs, and their responsiveness
should not be based to the social or economical condition of the affected
people.

6.0 CHALLENGES AND FUTURE RESEARCH DIRECTIONS

The use of OR techniques for disaster preparedness and response can help
improve the efficiency and effectiveness of processes extensively. The
challenges defined in this paper about the particular structure of disaster SCs
demonstrate their differences from regular SCs. Since disaster SC
management is a newly emerging research area, there are many problems to
be solved and new directions to be discovered for future research beyond the
limited literature so far.

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Most of the current research on disaster operations management focuses on
the pre-event phase, which covers planning, mitigation, and preparedness
processes. There is limited research in recovery planning phases.
Furthermore, when a specific problem within a disaster context is modeled,
the model usually focuses on one specific stage (pre-event, response, and
post-event). However, there is an undeniable interaction between the
decisions made at different stages, that is, what is done today affects what
can be done tomorrow. Therefore, more comprehensive models integrating
multiple disaster stages are needed.

One of the main characteristics of disaster SCs is the presence of multiple


stakeholders (NGOs, governments, local authorities, etc.). In this
multifunctional environment, each of these players might have different
objectives and priorities, leading to potential conflicts and inefficiencies in
operations. Also, the best decision for each stakeholder alone is not the same
when the entire SC is considered, that is, inefficiencies exist when individual
incentives are not aligned. To handle the system as a whole, hierarchical
planning, multiobjective models, centralized/decentralized system trade-offs,
standard procedures, information sharing platforms, collaboration
mechanisms, and incentive models need to be developed and analyzed.

When dealing with disasters, the human factor is always present. Even the
best model that reflects the real conditions does not provide the perfect
solution for disasters unless it takes human factors into account. Therefore,
there is a need to incorporate behavioral aspects into the mathematical
models. For example, in order to design an effective evacuation model, the
model should be able to predict and incorporate the different reactions and
attitudes of the people. There is a limited amount of work connecting
mathematical representation and behavioral dynamics, and this
multidisciplinary approach has a high potential for more efficient solutions for
disaster SCs.

Finally, there is need for models that fully describe a disaster SC system
within stochastic, dynamic, and adaptive settings. A stochastic model would
be able to capture the high uncertainty in demand, supply, and delivery in
these SCs. Even though there is some work done modeling disaster and
emergency-related problems under uncertainty, many of the models in the
literature are deterministic. Incorporating the dynamics of the choices made
during each time period is crucial because of the strong interactions of these
decisions. The proposed models should also be adaptive to incorporate new
information when a change occurs. In a disaster framework, information is
usually limited at the beginning, and as time passes, more and more accurate
information becomes available. The model should capture and make use of
the new pieces of information.

Disaster SC management is a rising area of OR, which has the potential to


make a significant impact on the society. Defining the systems accurately and

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developing models that fit the structure of disasters are essential for applying
OR techniques in disasters applications.

7.0 REFERENCES

1. MS-55 LOGISTICS AND SUPPLY CHAIN MANAGEMENT,


Indira Gandhi National Open University, School of Management
Studies
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on 25.09.2010
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on 25.09.2010
5. “Humanitarian Supply Chain”,
http://en.wikipedia.org/wiki/Humanitarian_Logistics accessed on
25.09.2010
6. “disaster Supply Chain”,
http://www.responsenet.org/show.detail.asp?id=2168 accessed
on 25.09.2010
7. “Disaster relief operations Supply Chain”,
http://www.globalenvision.org/library/10/931 accessed on
25.09.2010
8. “Operations and Supply chain management”,
http://www.teex.com/teex.cfm?pageid=training
&area=teex&templateid=14&Division=USAR&Course=TNG40S
accessed on 25.09.2010
9. “Humanitarian Supply Chain”,
httphttp://www.fmglobal.com/pdfs/ChainSupply.pdf accessed on
25.09.2010
10. “Humanitarian Supply Chain”,
http://www.inderscience.com/search /index.php?
action=record&rec_id=24937 accessed on 25.09.2010

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