ÁREA 3, CENTROS DE EXCELENCIA Artículo 19.—Objetivos del área

Humanitarian logistics involves a range of activities similar to those found in commercial logistics. These activities include preparedness, planning, procurement, transportation, warehousing, tracking and tracing and customs clearances (Thomas and Kopczak, 2005). This suggests that the fundamental principles of managing the flow of information, finances and goods remain valid for humanitarian supply chains. However, how these quantities flow through the humanitarian supply chain is different from that of the private sector as is depicted in Figure 2.6.

Figure 2.6 Supply chains (Source: Blanco and Goentzel, 2006)

In the humanitarian context, material flows are physical flows such as relief materials that move from the suppliers to customers and vice versa. Information flows include all the necessary support structures necessary to coordinate the material flow, such as order tracking, tracing and transmission of reports to donors. Financial flows deals with donations, payment schedules and credit terms (Kleindorfer and Van Wassenhove, 2004 cited by Van Wassenhove, 2006).

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There are differences between humanitarian and private organizations. One major difference between private organizations and humanitarian organizations is their motivation and objectives. The survival and growth of humanitarian organizations depend on how well they meet the needs and expectations of their beneficiaries and stakeholders. Their focus is to save lives and reduce suffering caused by disasters. Although, financial stability is vital for their continued existence, money is a constraint rather than a goal (Beamon and Balcik, 2008). On the other hand, the goal of commercial organizations is to maximize profit (Thomas, 2003a; Kovács and Spens, 2007). Despite the relative differences between the private sector and humanitarians, for any given logistical operation, supply chain management lies at the centre of it all (Van Wassenhove, 2006).

According to Thomas (2003a), the key characteristics specific to humanitarian supply chain that distinguishes it from commercial supply chains include the following: zero lead times; high stakes; inadequate information; Operations are ad hoc, with poor measurement systems; and level of enabling technology available varies.

Commercial supply chains mostly rely on supply chain models designed for routine and repetitive actions (Long, 1997). In contrast, humanitarian relief operations are sudden and occur in complex environment. Hence, relief operation requires designing and managing a series of non-routine supply chains.

In the humanitarian sector, plans are not only made at the onset of a disaster but planning is a continuous process. Relief operation plans are regularly adjusted updated and adapted taking into account new environmental conditions and variations in information regarding demand and supply. While in the commercial sector planning is not as rigorous.

Customers assume different roles in commercial and humanitarian supply chains. In commercial supply chains, the customer is seen as an integral part of the supply chain and also drives the supply chain. While in the humanitarian context, the beneficiaries who are the end users have little or no voice in the process, they do not buy or pay for what they receive. Also, the consumer and beneficiaries are seen as two very distinct groups, the recipient of humanitarian aid is the beneficiary, while the donors represent the consumer.

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Information management systems are an integral part of commercial supply chains and are also seen as management strategy. While, in humanitarian sector the use of information system is either non-existent or such systems are inefficient or archaic (Maon et al., 2009). Inventory control and management is easier in commercial supply chains due to predictability of demand and inventory visibility. The reverse is the case in humanitarian supply chains, it is very difficult to manage due to the unpredictability of demand, high inventory levels and short lead times (Oloruntoba and Gray, 2006). The flow of Products is relatively smooth in most commercial supply chains as supply is used to match demand but it is a different scenario in the humanitarian supply chain. Unknown demand and poor infrastructure drastically affect the flow process. Demand patterns are known in commercial supply chain, (i.e. information involving requirements and locations can be accurately obtained but such data is hard to come by in humanitarian operations). Humanitarian supply chains need to be agile, rapid response to disaster is vital when operating in a critical and unpredictable environment (Oloruntoba and Gray, 2006). In commercial supply chains, relationships between key players are formalized and are long-term relationships. On the other hand, Humanitarian supply chains and networks are inherently temporal. The supply chain only last for the duration of the relief operation.

Another difference identified by Beamon and Balcik (2008) is related to performance measurement. According to Beamon and Balcik (2008), performance measurement is very direct in the private sector while there are no clear metrics for measuring performance in the humanitarian sector. Thomas (2003a), states that humanitarian organization focus on output performance, but in the commercial sector performance measures are well defined and align with the organization goals. Cost and financial bottom lines are several performance measures used in the private sector. However, in the humanitarian sector the term “cost” is ambiguous. It is very difficult to determine how the cost of an emergency should be calculated. For example, cost can be associated with losses incurred as a result of a disaster, this includes all financial loses, assets and future income lost by victims of the disaster. Otherwise, it can also be attributed to the cost incurred by humanitarian organization when providing humanitarian aid and assistance.

A comparison between the commercial supply chain and the humanitarian relief chains is presented in Table 2.2.

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Table 2.2 Comparisons between commercial and humanitarian supply chain (Source: Beamon, 2004)

Characteristics Commercial Supply Chain Humanitarian supply Chain Demand Relatively stable, predictable

demand patterns. Demands occur from fixed locations in set quantities.

Demand is generated from random events. Demand are estimated after they are needed, based on an assessment of disaster characteristics Lead time Lead time determined by the

supplier-manufacturer-retailer chain

Zero lead times between the occurrence of the demand and the need for it, but the actual lead time is still determined by the chain of material flow.

Distribution network configuration

Well-defined methods for determining the number and locations of distribution centres.

Challenging due to the nature of the unknowns (locations, type and size of events, politics, and culture), and “last mile” considerations.

Inventory control

Well-defined methods are used to determine inventory levels based on lead time, demand and target customer service levels.

Inventory control is challenging due to the high variations in lead times, demands, and demand locations.

Information Are well-defined, using advanced technology.

Information is often unreliable, incomplete or non-existent.

System Are designed to produce high quality products at low cost to maximize profitability and achieve high customer satisfaction.

Minimize loss of life and alleviate suffering.

Performance measurement system

Focused on resource

performance measures, such as maximizing profit or minimizing costs.

Primary focus on output performance measures, such as the time required to respond to a disaster or ability to meet the needs of the beneficiaries

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Despite the differences identified between commercial and humanitarian supply chains, both supply chains are also similar in various ways. Some of the similarities include:

 Both supply chains aim to improve efficiency and effectiveness in service and goods delivery;

 SCM processes are similar in both commercial and humanitarian supply chains (Maon et al., 2009);

 Visibility and coordination is required in both supply chain in order to improve responsiveness and effectiveness.

 Both supply chain could be very complex and involves a network of both local and international players;

 Supplies flow through humanitarian chains like it does in the commercial chain (Van Wassenhove, 2006); and

 Logistician in the commercial and humanitarian sector both face similar trade-offs issues in performance measurement (Mbohwa, 2006).