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Critical Success Factors in The Context of Humanitarian Aid Supply Chains
Critical Success Factors in The Context of Humanitarian Aid Supply Chains
www.emeraldinsight.com/0960-0035.htm
IJPDLM
39,6 Critical success factors in the
context of humanitarian aid
supply chains
450
Stephen Pettit and Anthony Beresford
Transport and Shipping Group, Logistics and Operations Management Section,
Cardiff Business School, Cardiff University, Cardiff, UK
Abstract
Purpose – Critical success factors (CSFs) have been widely used in the context of commercial supply
chains. However, in the context of humanitarian aid (HA) this is a poorly addressed area and this paper
therefore aims to set out the key areas for research.
Design/methodology/approach – This paper is based on a conceptual discussion of CSFs as
applied to the HA sector. A detailed literature review is undertaken to identify CSFs in a commercial
context and to consider their applicability to the HA sector.
Findings – CSFs have not previously been identified for the HA sector, an issue addressed in this
paper.
Research limitations/implications – The main constraint on this paper is that CSFs have not
been previously considered in the literature as applied to HA. The relevance of CSFs will therefore
need to be tested in the HA environment and qualitative research is needed to inform further work.
Practical implications – This paper informs the HA community of key areas of activity which have
not been fully addressed and offers.
Originality/value – This paper contributes to the understanding of supply chain management in an
HA context.
Keywords Aid agencies, Supply chain management, Critical success factors
Paper type Literature review
Introduction
The requirement to improve the delivery of humanitarian aid (HA) has recently
received increased attention, due to the perceived failures in aid delivery systems
following major crises (Fritz Institute, 2005). HA delivery is often treated as a series of
discrete activities disconnected from each other and there is often a weak (or non
existent) connection between each stage in the delivery of aid, and developing
continuous supply chains has not generally been a priority leading to large amounts of
waste (Taylor and Pettit, 2008; United Nations Development Programme – (UNDP),
1993). Wastage rates of up to 30 percent in aid delivery have been identified in some
post-crisis situations (Beresford and Rugamba, 1996; Beresford et al., 2007).
There is considerable evidence that the number of natural and man-made
emergencies worldwide is increasing (Roh et al., 2008), but there is still relatively little
published work aimed at improving the understanding of the nature of supply chain
International Journal of Physical management (SCM) for HA in crisis conditions. Kovacs and Spens (2007) however,
Distribution & Logistics Management suggest that this is now changing. Ho et al. (2002) recognised that such problems exist
Vol. 39 No. 6, 2009
pp. 450-468 in the understanding of commercial supply chains and there is no reason to believe that
q Emerald Group Publishing Limited the level of understanding of HA supply chains is any different. Little effort has been
0960-0035
DOI 10.1108/09600030910985811 put into developing a sound theoretical basis underpinning how SCM for HA operates.
First, for example, the diverse nature of the HA community (e.g. medicine, food, Humanitarian
clothing, and infrastructure) is not fully understood (UNDP, 1993). Second, crisis aid supply
response is relatively short-term and the establishment of effective supply chains takes
place under high-stress conditions. Third, there may well be an element of “we know chains
best”. While most aid agencies ultimately succeed in delivering aid to those most
needing it, there appears to be little willingness (Schulz and Heigh, 2007) to consider
approaches used by either other aid agencies or by the wider business community 451
which may have best practice concepts which could be usefully employed in the
context of emergency response. Finally, with the need to use financial resources as
effectively as possible there is little finance available to fund research into SCM for HA
and the research that does take place is therefore intermittent and uncoordinated.
Many of the processes in commercial supply chains are similar to, although not
necessarily directly transferable to, the HA environment and the direct transfer of
business logistics concepts to HA will be, at best, problematical (Olorotunba and Gray,
2002). The significant differences are that HA generally operates in a context of
voluntary contributions of finance and labour, that the “end consumers” are people
who will not be party to any commercial transaction, that final delivery will be in
countries without any established logistics community or infrastructure (conceivably
no functioning transport infrastructure), that governments and the military may be
involved at a significant level and the environment may be both politically and
militarily unstable (Olorotunba and Gray, 2002; Long and Wood, 1995). The limited
transferability of commercial logistics and supply chain solutions is exacerbated by the
shortage of technical knowledge in many aid agencies; specifically, there are
insufficient experienced logisticians working in the HA community. This issue is
highlighted by the Fritz Institute (2005) in a survey undertaken in the aftermath of the
Asian Tsunami. This knowledge scarcity impacted on the functioning of the relief
effort and had wider consequences as logisticians were reallocated from other
assignments. The shortage of logisticians had other impacts notably in the area of
assessment and planning. The Fritz Institute (2005) survey highlighted the fact that
only 58 percent of organisations had such people in their assessment teams ultimately
leading to problems in the supply chain at a later date as choke points had not been
addressed properly.
Emergency logistics is often the largest and most complex element of relief
operations (UNDP, 1993) and in order for successful supply chains to be effective there
is a requirement for a clear understanding of the problems and issues involved.
Improving supply chain efficiency requires uncertainty to be reduced, minimised, or
even eliminated but in many business cases this may not be completely achievable due
to the product involved (Mason-Jones et al., 1999; Christopher and Towill, 2001). Such
problems are exacerbated in an HA context when the products become relief goods
destined for communities of people either distressed or displaced as the result of a
crisis outside of their control, and through which the supply chain will inevitably have
to operate. Developing an understanding of which factors are critical to the success of
HA supply chains, and whether the same factors emerge in all crises, is important. It is
apparent that, as with commercial supply chains, there are certain key factors which
will determine the ultimate success of HA delivery. As a contribution to the debate on
SCM for HA, this paper therefore seeks to identify the range of factors which are
critical for the successful operation of an HA supply chain.
IJPDLM Critical success factors
39,6 The concept of success factors was first developed by Daniel (1961). It was proposed
that if certain factors, critical to the success of that organisation, are not achieved the
organisation will fail (Huotari and Wilson, 2001). While in an HA context profit is not
the motive, if critical success factors (CSFs) are not defined then failure is likely to
occur in the delivery of aid to those who require it in either in terms of the time such aid
452 takes to reach those who require it, or in the delivery of inappropriate aid. Various
definitions as to what CSFs are have been put forward. Rockart (1979) highlights the
fact that CSFs are “the limited number of areas in which results, if they are satisfactory,
will ensure successful competitive performance for the organisation” and Hofer and
Schendel (1978) state that they are “those variables which management can influence
through its decisions” and which can affect a companies overall competitive position.
Leidecker and Bruno (1984) contended that CSFs exist at a variety of levels, firm
specific, within an industry, and in the wider economic socio-political environment.
Korpela and Tuominen (1996) state that CSFs are “the characteristics, conditions or
variables that when properly sustained, maintained or managed can have a significant
impact on the success of a company in a particular industry.” Overall, they could be
described as the “limited number of areas in which results ensure successful
competitive performance” (Alazmi and Zairi, 2003).
There is a substantial body of literature relating to the understanding of CSFs in the
business environment, and it is clear from much of this work that CSFs are best
identified from the top of an organisational structure. As Freund (1988) suggested, this
approach ensures that individual “business unit” CSFs support the overall CSFs of the
business. Thus, analysing a business to identify CSFs begins with identifying
corporate objectives, then business units, and then key functional areas. At each level,
the number of CSFs identified ranges between five and ten as more than this increases
the likelihood that performance indicators are being used instead of success factors.
If too many CSFs are identified they are likely to have “been defined at too low a level
of detail” and incorrect CSFs arise from “an unrealistic view of the marketplace” or
because the overall strategy was defined before the CSFs were identified (Freund,
1988). Anthony et al. (1972) used the concept for management control system design,
later recognising six important variables (Anthony and Dearden, 1976). Within aid
organisations, the application of this approach suggests therefore that there should be
identifiable CSFs for the organisation, CSFs specific to their logistics and SCM division
or unit (or specific to those responsible for such activity if there is no separate unit) and
possibly CSFs for individual parts of, or actors within, the supply chain. It is also
possible that individual CSFs may have their own specific CSFs.
Strategic planning
For a supply chain to succeed strategic planning addressing long-term decision
making is required and will therefore need to be dealt with at the highest level of an
organisation. Strategic management takes a view of the overall organisation and
addresses the questions which define how an organisation fits into its “business
environment” (Daft and Marcic, 2004). Without a clear strategic view it is unlikely
that individual aspects of an aid agencies “business”, such as implementing effective
supply chains, can be fully achieved. Strategic planning identifies assets and
assesses the strengths and weaknesses of possible scenarios. A long-term approach
is adopted which allows an organisation to be prepared for what must be done
when an emergency occurs (Long, 1997). For example, the assessment and planning
for the Asian Tsunami crisis were inadequate within many organisations which led
39,6
454
Table I.
IJPDLM
Strategic planning Long-term decision making, planning, Nature/size of the business, location, Gunasekaran and Ngai (2003), Razzaque
management and leadership outsourcing, budgets, relationships, (1998), and Wong (2005)
customer focus, setting of standards and
performance monitoring, management
and support, organisational
infrastructure, and processes and
activities
Resource Inventory management Planning and coordinating materials Gunasekaran and Ngai (2003), Power et al.
management flows, volumes, timings, and consolidation (2001), Wong (2005), Whybark (2007), and
Beamon and Kotleba (2006)
Transport planning Transport availability and constraints Transport mode, capacity, scheduling, Gunasekaran and Ngai (2003)
maintenance, and intermodality
Capacity planning Storage, processing and transport Long- and short-term demand, number of Gunasekaran and Ngai (2003)
capacity warehouses/capacity, number of vehicles,
and material handling equipment capacity
Information Strategic information management and Data on performance and utilisation, Power et al. (2001), Huotari and Wilson
management enterprise resource planning system type, and level of integration (2001), Wong (2005), and Umble et al.
(2003)
Technology Implementation of new technology Innovation and adaptation, technology Power et al. (2001) and Gooley (1999)
utilisation leader/follower, interfacing, and training
HRM Participative management Number of employees in relation to Power et al. (2001) and Wong (2005)
capacity, training and education,
motivational aids, culture, and human
factor management
Continuous Benchmarking, key performance Reliability, flexibility, lead time, cost Power et al. (2001), Korpela and Tuominen
improvement indicators effectiveness, value-added, and (1996), Wong (2005), and de Brito et al.
measurement (2007)
Supplier relations Collaboration Management of competition amongst Power et al. (2001), Soin (2004), Cottrill
suppliers and service/price negotiation (2004), and Gooley (1999)
Supply chain Just-in-time, agility, and lean supply Management of base and surge, hub and Power et al. (2001), Christopher and Towill
strategy spoke systems, inbound and outbound, (2001), and Naylor et al. (1999)
and in-house/third party strategies
to problems in the execution of an effective response (Fritz Institute, 2005; Humanitarian
Beresford and Pettit, 2005). Strategic planning should include corporate strategy aid supply
(e.g. transport and warehousing), location of distribution centers (e.g. centralised or
localised), outsourcing of non-core activities, the size of the business and budgets, chains
acquiring capital, deployment of resources and the effective use of the organisations
skills. It is almost certain that the political and economic environments in which
a crisis occurs will influence the strategic planning of aid agencies (Long and 455
Wood, 1995).
At levels below the “corporate” level strategic management will need to address the
key attributes relating to the various stages of disaster planning. Whereas in a
commercial organisation there will, in the main, be a relatively stable supply chain or
chains for the goods being moved, in disaster scenarios there are likely to be different
supply chain requirements for the different stages of a disaster. As Kovacs and Spens
(2007) suggest, different resources and skills will be required for the three principal
phases of a disaster, preparation, response, and reconstruction. Different combinations
of organisations are likely to be involved in the different phases, some in only one,
some in all. Thus, the strategic planning requirements of each organisation will be
different. Strategic plans can be developed for situations that are likely to occur (Long,
1997) and aid agencies often develop long-term relationships with suppliers for items
frequently needed in disaster situations as highlighted, for example, by Kovacs and
Spens (2007) and Dignan (2005). Where such arrangements are made they may bridge
the various phases of a disaster (Thomas, 2003).
Völz (2005) highlights the problems that can occur if forward planning does not
occur and which may impinge on other CSFs such as information requirements,
coordination and collaboration mechanisms and capacity mapping. Strategic planning
will also assist aid agencies in developing more effective inventory management and
may lead to approaches such as pre-positioning (Matthews, 2005). The strategic
sourcing and centralised purchasing of aid will also be fundamental to successful
delivery. The UNDP (1993) suggest that the implementation and operational aspects of
such plans have to be understood and accepted by everyone in the organisation. A good
example of successful pre-positioning of emergency materials and supplies occurred in
Indonesia in May 2006. Following the increasing activity of the Mount Merapi volcano
aid agencies were mobilised and stockpiles of aid were positioned in readiness for
large-scale displacement of the local population and possible casualties. In the event an
earthquake of 6.2 magnitude struck in the same area resulting in large-scale damage
to buildings, the loss of an estimated 5,700 lives and displacement of at least 600,000
people. Availability and appropriateness of aid materials was therefore less of a
problem than is often observed (Save the Children, 2006).
Inventory management
Commercial inventory management is a core logistics function which is dominated by
“pull” systems. In contrast, Whybark (2007) contends that in disaster relief
circumstances inventory first requires “push” into strategic storage locations before
“pull” systems are implemented to get to the precise area of need. Other logistics
functions revolve around managing inventory which is concerned with the planning,
coordination, and control of materials flow in logistics supply chains. Volumes, timing,
and consolidation are important and will be affected by both supply and demand.
IJPDLM Inventory management needs to address both existing inventory within the
39,6 organisation and “in-country sources of supplies which can be accessed at short
notice” (Long and Wood, 1995). Inventory analysis needs to consider lead times for “the
supply of critical items” (UNDP, 1993) and forecast demand along the supply chain
(Gunasekaran and Ngai, 2003). As Power et al., (2003) suggest “flexibility of both
process and product are pre-requisites for being nimble and responsive to changing
456 market requirements”. Commercial organisations have used many different
methodologies to optimise their use of resources” (e.g. just-in-time – JIT) and some
of these may be appropriate for HA delivery. Inventory management in HA differs
from commercial supply chains in that “the time values of commodities are much
greater than the inventory carrying costs” (Long and Wood, 1995). Beamon and
Kotleba (2006) carried out extensive field research in southern Sudan, and from this,
proposed three single-item inventory management models which could be developed
into a composite multi-item model.
It has been shown in recent disaster relief operations that the speed of HA delivery
plays an important role and affects the ability of logisticians to procure, transport and
receive supplies at the site of a humanitarian relief effort (Thomas, 2003). To this end a
number of HA organisations, for example World Vision and the International
Federation of the Red Cross (IFRC), have begun to adopt pre-positioning as a key part
of their inventory management process, by maintaining fully stocked warehouses in
key locations and pre-planned stock arrangements with suppliers and transport
companies in a range of other countries and which contributes to a more rapid response
once a crisis occurs (Matthews, 2005; Schulz and Heigh, 2007; Jahre and Haigh, 2008).
One of main factors that can increase the speed of delivery is to locate the emergency
relief warehouse depot near the place where disaster frequently occurs. International
agencies aim to limit the impact of natural disasters by operating worldwide response
network supported by infrastructure such as freight depots in strategic locations.
The main objective of developing such a warehouse network, supported by transport
capability, is to reduce response times and costs when an emergency occurs. At the
present time different agencies operate their own global networks, although there has
been some integration of activity where, for example, some aid agencies make use of
the United Nations Humanitarian Resource Depot Network (Roh et al., 2008). The recent
work of Balcik and Beamon (2008) represents one of the first attempts to marry
theoretical emergency inventory needs with actual requirements.
Time is clearly one of the crucial factors in any emergency relief operation.
It is important for the stocks to arrive in the right area at the right time in order to
assist the victims. During an initial period of three to five days after a disaster, a
country must, in effect, use its indigenous resources to meet the challenge of providing
emergency relief (Tatham and Kovacs, 2007). A carefully constructed network should
be able to meet the needs of every disaster. It is not just only the donors that are needed
for the relief operation to work, but also logisticians who play a crucial role in
emergency relief operations (Fritz Institute, 2005). It is thus suggested that relief
provision would be more effective if a collaborative warehouse strategy, involving
several agencies, were adopted. Further, in light of the evidence suggesting more
frequent crises and emergencies in new areas, the current warehouse networks should
be expanded to improve future humanitarian response.
Transport and capacity planning Humanitarian
The provision of transport is very different in disaster situations compared to the aid supply
circumstances generally faced by commercial organisations. While the latter will have
stable fleets of vehicles and primarily good infrastructure over which to operate, in chains
disaster situations there is usually destabilised infrastructure and the fleet will have to
be organised at the disaster location from available resources (Kovacs and Spens,
2007). However, transport and distribution are critical in disaster relief (Long, 1997) 457
and an important aspect of humanitarian logistics is the requirement to address mode,
utilisation of capacity, scheduling, and maintenance in such circumstances. The full
range of activities includes consolidation, contract services, payment, local tendering
and brokering, outsourcing of transport, strategic alliances, and cost minimisation
(Gunasekaran and Ngai, 2003). Where existing long-term aid programmes are already
in existence short-term emergency relief may be able to draw on existing organised
transport programmes. In emergency relief situations, however, aid agencies are likely
to be competing with each other for the same transport capacity and this will increase
the cost as local transport sources react to market forces and increase prices as demand
outstrips supply. In such situations, where vehicles are used from across an existing
network, there may well be trucks “circulating around a disaster area without any
particular destination” (Kovacs and Spens, 2007). Such a situation was well
documented in the aftermath of the Asian Tsunami (Fritz Institute, 2005). The full
range of transport options are likely to be needed including air (particularly in the early
stages of a crisis), sea and road. The use of other transport methods include the use of
pack animals in mountainous regions where no other options are available (Long and
Wood, 1995; Beresford et al., 2002) and amphibious craft in coastal or other flooding
crises.
Demand assessment post crisis is “unpredictable regarding timing, location and
scale” and will be affected by a range of factors including those with indeterminable
impacts such as culture and language (Kovacs and Spens, 2007). Capacity planning is
affected by both short- and long-term demand and will affect decisions on numbers of
warehouses and distribution centers and their capacity, vehicles and other equipment
and numbers of employees. Four key areas affecting capacity are warehousing,
transport, material handling devices and human resources, and maximisation of use of
capacity is key (Gunasekaran and Ngai, 2003). Increasing the capacity of aid networks
can also be achieved through collaboration with commercial organisations as
exemplified by the World Food Programme’s (WFP) partnership with TNT to use their
off-peak capacity (Cottrill, 2004). Additionally, capacity planning may extend to
include the ability of ports and airports to handle relief commodities under different aid
scenarios. In respect of ports, reviewing capacity would need to consider the type of
handling facilities available, on-quay storage and the actual operational capacity of the
port at different times of year. During the 1999 Balkan crisis, port operations were
switched from Macedonia to Italy, Albania, and Greece in order to overcome capacity
problems (Gooley, 1999). For airport capacity, the ability to take certain types of
aircraft, cargo handling facilities, refuelling, helicopter operational ability, and conflict
with existing services will all impact on operational ability (UNDP, 1993,
Howard-Williams et al., 2008). Airport capacity was put under considerable pressure
during the aftermath of the Asian Tsunami when many aid agencies sought to land
their own aircraft (Thomas, quoted in Jensen, 2005). Competition for takeoff and
IJPDLM landing slots may make it impractical for aid agencies to rely entirely on air shipments,
39,6 such a situation having occurred in Albania during the Balkan crisis (Gooley, 1999).
Conclusions
It is clear that CSFs, which are prominent within commercial supply chains, are just as
relevant to those organisations operating in the HA sector. The CSFs identified in this
discussion are as important in the HA environment as they are in a commercial context.
They are central to effective emergency response; although it is a source of concern that
they have not always been addressed adequately by HA organisations. This review has
shown that the boundary between CSFs and key performance indicators in the context of
HA is not always clear and the usage of the terms by individual organisations can
overlap. However, there appear to be ten CSFs which are widely used commercially and
which are probably sufficiently robust to use in a “global” and non-commercial context
such as HA distribution. This paper highlights a range of CSFs which enable a
systematic approach to be adopted in order to assess supply chain effectiveness in detail.
A particular issue, for example, is that in crisis conditions transport or freight rates are
consistently seen to be forced up to the detriment of the aid donors and the recipients of
the aid. Although this is partially a logical commercial response to uncertainty, there is
also evidence of opportunism on the part of the service providers. This clearly illustrates
that tighter planning may yield better control of the supply chain. The CSFs that are
suggested here are not, however, attributed priority ranking, and individual
organisations may well have different CSFs as their key objective for improvement.
CSFs will generally emerge from their particular role and from the constraints placed on
their operation, which in the context of HA can be very specific. Thus, clarifying which
CSFs are applicable in emergency situations, and assessing their respective priority
rankings, forms the logical extension of the concepts discussed in this paper and is a
basis for future research.
This paper has sought to highlight and appraise the CSFs which are seen as
important in maximising the operational effectiveness of HA supply chains. As such it
IJPDLM has primarily addressed the individual “structural” elements of such supply chains.
39,6 There are however a range of “cultural” influences, many of which are external, which
must come together to create a positive environment which in turn will enable the
structural elements to work; amongst these are behavioural aspects of participants in
the supply chain. In any crisis situation there will be a range of players such as, for
example, governments, national non-governmental organizations (NGOs), foreign
464 NGOs, military organisations, and UN aid agencies (Pettit and Beresford, 2005).
Decision making thus cannot be based solely on the “structural” elements of supply
chains – cultural elements may play a decisive role and ultimately may determine
whether or not an effective supply chain can ever be established. One of the most
extreme examples of political constraints determining the form and level of response
was that of Cyclone Nargis (Whiting, 2008). In the immediate aftermath of the event,
the Myanmar Government dictated severely constrained access for aid agencies, thus
effectively halting the supply chain at the international border for several days before
politics softened enabling a robust air bridge to be established. Whether structural or
cultural factors ultimately determine the effectiveness of an emergency supply chain
will be depend on the nature and location of the crisis in question.
Note
1. The ten commandments are: centralised organisation, government commitment, autonomy,
communications, budget and procurement system, base and port operations, commodity
control system, transport fleet management, vehicle workshops, and distribution
monitoring.
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Further reading
Beresford, A.K.C. and Pettit, S.J. (2004), “The development of an emergency relief logistics
response model”, Proceedings of the 9th Logistics Research Network Conference, Dublin,
September.
Corresponding author
Stephen Pettit can be contacted at: pettit@cardiff.ac.uk