Module 2

Planning for In-kind Distribution

Module outline
• What is it?
• When are in-kind suitable
• Potential advantages and disadvantages
• logistics drivers in in-kind distribution
Introduction
• This is the most traditional way of delivering humanitarian aid to the vulnerable. It entails the
delivery of physical commodities to the vulnerable in form of food, clothing, farming inputs,
shelter, health products and services
• According to Wood et al. [20] “relief itself can be defined as a foreign intervention into
society to help local citizens”. The purpose of disaster relief operations is to “design the
transportation of first aid material, food, equipment, and rescue personnel from supply points
to a large number of destination nodes geographically scattered over the disaster region and
the evacuation and transfer of people affected by the disaster to the health care centers safely
and very rapidly
• Barbarosoğlu et al. [21], described the relief supply chain as that designing “the transportation
of first aid material, food, equipment, and rescue personnel from supply points to a large
number of destination nodes geographically scattered over the disaster region and the
evacuation and transfer of people affected by the disaster to the health care centers safely and
very rapidly
Why in-kind? When suitable
• Sudden onset disaster e.g cyclone Idai-
• In remote or rural areas where there are no functional markets for
CTPs
• In school feeding schemes
• Nutrition related programmes
• Responding to marginalized groups (Old people, Disabled people etc)
• Cultural settings- communities where cash is not used, cash can cause
social imbalances leading to gender based violence
Diagram: In kind supply chain process flow
Sourcing
• In in-kind relief supply chains there are two main sources of goods and services which are
• i) Suppliers
• ii)In-kind donations
• So the first step is related to all activities of sourcing of the relief items which come from
suppliers or donors
• Goods and services are obtained from suppliers by applying various procurement
techniques (direct purchasing, e-procurement, tenders
• The main challenges here are the reduction of purchasing costs (considering price inflation
in local markets after disasters) and lead times as well as the coordination of in-kind
donations
• The main sourcing decisions are whether to purchase locally, near shore or off shore. In
coming up wit this decision, factors such as costs and lead time should be considered.
Transportation
• Transportation is the next stage in the supply chain and it includes the
movement of personnel, equipment and necessary items.
• First, the goods are brought to central distribution centers (In-bound
logistics) , distribution intermediary points or local distribution centers and
finally transported to the regions affected by the disaster (outbound logistics)
• Decisions such as the mode of transport to be used are key taking into
consideration efficiency and responsiveness.
• The state of infrastructure must also be considered, in some instances where
road infrastructure has been totally destroyed, air drops are preferred.
• Route planning
Facility Configuration
• In humanitarian supply chain, facilities are mainly warehouses, where relief
inventory is stored and distributed from.
• In most cases there are three warehousing points in humanitarian supply chain
• i) Central Distribution- where humanitarian aid inventory from suppliers and
donors arrives first. EG for Cyclone Idai, most of the central warehouses were in
Harare
• ii) Intermediary Distribution points- These distribution points are normally situated
in a central point within the affected region, district or province. For cyclone Idai, the
intermediary distribution point was in Mutare.
• iii) Local Distribution points- These are usually more than one and are doted within
close proximity to the beneficiaries. They must be physical accessible by the
recipients
Inventory
• Humanitarian inventory is the actual goods and services purchased or
donated for the sake of distributing to the affected communities to
alleviate suffering.
• Can be in form of food, shelter, clothing, medicines, equipment, health
services etc
• Decisions on inventory in humanitarian supply chain context is
worried about demand type (What is needed, clothes, shelter, food or
medicine), volumes( in what quantities etc.)
• A thorough needs assessment can assist in sound decision making
Information
• consists of data and analysis concerning facilities, inventory,
transportation, costs, prices, and customers throughout the supply
chain.
• Information is potentially the biggest driver of performance in the
supply chain because it directly affects each of the other drivers.
Information presents management with the opportunity to make
supply chains more responsive and more efficient.
• For example, with information on demand
Potential advantages & disadvantages of In-Kind
Activity 1: Research potential advantages and disadvantages of an in-
kind distribution
Temperature Sensitive Logistics in In-Kind
Distribution
• Alternatively called Temperature Controlled Logistics.
• Refers to logistic where controlling of temperature or climatic condition of goods in transit and
storage is of significant consideration e.g. medical drugs like vaccines, perishable foods like
(fruits, vegetables, fresh milk and meat)
• Although TSL is applied both in commercial and humanitarian context, it is not of doubt that it is
one of the drivers of humanitarian supply chain in the delivery of medical humanitarian aid.
• In some context, although fewer, TSL can be used to provide perishable foods to beneficiaries e.g
milk, meat and vegetables
• During the Covid-19 pandemic, TSL was the backbone of delivering humanitarian aid in form of
vaccines
Significance of TSL/TCL
Delivering of humanitarian medicine
• During the Covid-19 pandemic, industry leaders estimate that the global distribution of the Covid-19
vaccine will require about 10 billion doses to achieve the desired level for herd immunity (World Bank
2021)
• This will in turn require 15,000 delivery flights, 200,000 movements by pallet shippers and 15 million
deliveries in cooling boxes over the next two years.
• Once the vaccines arrive in each country, the respective government will assume responsibility for
storage, distribution and administration of the vaccine to the population at large
• Most developing countries have significant gaps in the TCL infrastructure needed to maintain the cold
chain until the point of inoculation.
• In many regions, the private sector can make a crucial contribution to vaccine distribution by investing
in multipurpose TCL facilities which can be used for both vaccines and other goods.
• The are other humanitarian medicines like HIV/AIDS drugs, Children Vaccines, TB drugs that come in
the country in huge quantities and they require TSL facilities
Cont’d Benefits of TSL
Reducing Food Loss
• Humanitarian aid can be in form of other basic food staffs with short
shelf life span e.g Fruits, Dairy products, meat and vegetables
• In developing countries, the lack of adequate temperature-controlled
logistics infrastructure results in enormous food waste
• Without TCL, the humanitarian distribution of agricultural products
will takes place in a limited geographic area.
Logistics Costs associated with In-Kind
distribution
Activity 2: Discuss the logistics costs associated with in-kind distribution
• Facility costs
• Inventory management costs e.e insurance, security, packaging and handling
• Transportation costs
• High labour costs
• Coordination with other cooperating partners
Warehousing and Inventory management
practices
Warehousing and Inventory management
practices
• In humanitarian logistics, a lot of facilities are in form of warehouses
• Warehousing and inventory management are a major activity in in-kind distribution
• The primary use is that of storage of humanitarian aid inventory e.g food (veg oil, maize grain,
small grain, health products, water and sanitation products etc.)
• Warehouse management is the act of organizing and controlling everything within your warehouse
– and making sure it all runs in the most optimal way possible.
ARRANGING YOUR WAREHOUSE
General Warehouse layout
Planning the layout of your warehouse is centred on balancing two things: Providing enough storage space for your inventory;
While still having enough working space for staff to move around and complete their tasks.
And this generally requires (although it depends on individual business requirements) having a space designed to house the
following areas:

Space and manoeuvrability is a key thing to remember. Pickers need to be able to walk up and down aisles without getting in each
other’s way.
And should also have enough room to actually pick items.
Activity 3 and 4
Task1 : Discuss other issues to be considered in warehouse management
Task 2: Discuss Supply chain risks in in-kind distribution
General Inventory Management Techniques
ABC ANALYSIS
• ABC analysis is based on Pareto principle (80-20 rule) which states that 80% of the overall consumption
value (expense) is based only on 20% of the total items i.e. small portion of the items may typically
represent the bulk of money value, while a relatively large number of items may form a small part of the
money value.
• A items : money value is highest 70%, represent only 10% of items
• B items : money value is medium 20%, represent about 20 % of items
• C items : money value is lowest 10%, represent about 70% of items
• A-items should have tight inventory control under more experienced management. Re-orders should be
more frequent.
• B-items require medium attention for control. An important aspect of class B is the monitoring of
potential evolution toward class A or, in the contrary, toward the class C.
• C-items require minimum attention and may be kept under simple observation. Re-ordering is less
frequent