Background of Humanitarian

Supply Chain Management

Dr. Wasantha Premarathne

Senior Lecturer, KDU
© Dr. Wasantha Premarathne
 • The HSCM involves managing the different factors in the system to
reduce the impact for the people who are affected by the disaster.
• The HSCM and the commercial supply chain management (CSCM) are
different in their motives and operating conditions.
• The main task is to mobilise the goods, finance and to administer the
services to the beneficiaries.
• Disaster relief requires the activities in many dimensions, such as,
rescue efforts, health and medical assistance, food, shelter and long
term relief activities.

© Dr. Wasantha Premarathne

 Definition of HSCM
• The systematic use of policy instruments to deliver humanitarian
assistance in a cohesive and effective manner. Such instruments
include: • strategic planning • gathering data and managing
information • mobilising resources and assuring accountability •
orchestrating a functional division of labour in the field • negotiating
and with host political authorities • providing leadership maintaining
a serviceable framework (Minear, 2002).

© Dr. Wasantha Premarathne

 • A process of planning, managing and controlling the efficient flows of
relief, information, and services from the points of origin to the points
of destination to meet the urgent needs of the affected people under
emergency conditions (Sheu, 2007).

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 COMPARISON OF BUSINESS AND
HUMANITARIAN SCM

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 • If we define CSC as a network that supports the flow of goods,
information and finances from the source to the final customers,
HSC can be defined quite similarly to this as a network for
managing the flow of goods, information and finances from
donors to affected persons.
• The definition of the HSCM has remained ambiguous, as there has
been no one definition which gives the complete meaning,
issues, challenges and tasks of the HSCM.
• Various authors have tried to define HSCM under different contexts.

© Dr. Wasantha Premarathne

 • The HSC, unlike the CSC, does not have the typical supply chain stages
like those of suppliers, manufacturers, distributors, retailers and
customers.
• Instead, the HSC consists of donors, NGOs, local bodies and the
aid recipients. The following figures represent a typical HSC and
the actors of the supply network of the humanitarian aid.

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 A typical HSC

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 Medical Supply Chain

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 Actors of supply network of humanitarian aid

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 • The supply chain in the humanitarian aid programmes is not usually
stable. It may break down at the receiving end, but it may be unstable
at the origin for two reasons, viz., the politicized donations and the
competitive nature of the fund rising from private donors

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 The HSCM has three dimensions to it
• Phase 1 - pre-disaster or preparedness phase
• Phase 2 - operation phase
• Phase 3 - post-disaster recovery and restoration phase

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 HSC Operations

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 Phase 1 - pre-disaster or preparedness phase
• In the pre-disaster response phase or the preparedness phase, the
historical profile of the disaster and its geographical information is
being collected and analysed for the beneficiaries.
• Past data regarding the suppliers, logistics providers and donors
are noted down and a database is being prepared. Further, the
data on market price and historical price is collected to prepare
the contingency stock.
• Preparedness phase defines the responsiveness of the relief
activities.

© Dr. Wasantha Premarathne

 Phase 2 - operation phase
• In the operation phase, demand and stock available have to be
reconciled in order to get a clear idea about the stock details.
• The stock details include both stock in-transit and stock in-
warehouses.
• The cost of each operation has to be tracked to balance the need and
the incoming donations.

© Dr. Wasantha Premarathne

 Phase 3 - post-disaster recovery and
restoration phase
• In the post operation phase, accountability of the donations has to be
done to maintain the transparency in the system.
• Also, the preparedness of the relief operation has to be analysed
to see how quick it was.
• The loss and damage has to be registered for accountability and
claims.

© Dr. Wasantha Premarathne

© Dr. Wasantha Premarathne
 HSC Collaboration
• In the HSC, collaboration refers to a process in which two or more
independent actors come together to formulate and implement their
joint activities.
• Collaboration helps actors negotiate and agree on common goals and
resource sharing, thereby allowing actors to align their actions with
their desired outcomes.
• Collaboration can occur with a variety of organisations including local
authorities, the military, the private sector, and other relief agencies.
• The WFP has been using such an arrangement to redesign both the
use of its warehouses to increase capacity and their distribution
network.
© Dr. Wasantha Premarathne
 • The American Red Cross uses commercial logistics contractors in
many crisis situations.
• Humanitarian operations are carried out smoothly when there is
political support for the necessary emergency management,
preparedness measures, technology, networking, and collaborative
relationships.

© Dr. Wasantha Premarathne

 Few aspects of collaboration
• Inter-organisational relationships as fundamental to HSC
collaboration.
• Organisational motivation is important to promote collaboration
among HSC actors.
• Leadership support is a necessary factor for collaboration.
• A cluster system as a way for HSC actors to collaborate. The central
idea of the cluster concept is to create several clusters. Each cluster
focuses on a specific function like water and sanitation, health,
shelter, or nutrition.

© Dr. Wasantha Premarathne

 Benefits of collaboration between actors
• economic efficiencies
• greater service quality
• organizational learning
• access to new skills
• diffusion of risk
• improved public accountability
• the ability to buffer external uncertainties
• conflict avoidance

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 • Collaboration among actors in the HSC can reduce the uncertainties
that arise due to fluctuations in the availability of supplies, conditions
of supply networks, and the availability of human resources to
provide aid.
• HSC collaboration can also benefit actors by providing a review of best
practices used by peer organisations that promote peer learning and
eventually result in improved organizational capabilities.

© Dr. Wasantha Premarathne

 Compete and collaborate
• In the humanitarian setting, humanitarian organisations (Hos) may
simultaneously compete and collaborate with one another.
• HOs compete over donors’ funds, aid material, media attention and
local networks.
• This competition can discourage actors from pursuing collaborative
efforts if they have their own funding resources or if there are no
incentives for them to collaborate with other actors.

© Dr. Wasantha Premarathne

 Drivers of HSC Collaboration
• Clear objectives
• Creating super-ordinate goals
• Super-ordinate goals are goals shared by several organisations. The list of shared goals must
be highly visible to all actors. The very visibility of these goals helps actors get motivated and
work together.
• Deploying portable structures
• Experimenting with different ideas
• Management interest and commitment
• Openness to collaborate
• The experience gained during past collaborations
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 • The mutuality in the relationship
• Task clarity
• Mutual trust between HSC actors
• Compatibility between organisational cultures

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 Barriers of HSC Collaboration
• Strategic barriers:
• Strategic barriers include a lack of top management commitment, understanding
in the supply chain, collaborative planning, and clear policies, experts, or
personnel available within humanitarian organisations.
• Technological barriers:
• Technological barriers to HSC collaboration include technological patents that
restrict collaboration at the operational level.
• Individual barriers:
• Individual barriers to HSC collaboration are mainly due to humanitarian
personnel’s poor skills. These barriers include lack of personnel training,
education, or motivation; resistance to change; resistance to adopting new skills;
and poor verbal and written communication skills, etc.
© Dr. Wasantha Premarathne
 • Organisational barriers:
• Organisational barriers are caused by poor organisational structures for
knowledge sharing, poor employee retention, and a lack of knowledge
management systems.

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 Future of HSC

© Dr. Wasantha Premarathne