Designing an efficient humanitarian supply network

• Date: 01 November 2016
• DOI: http://doi.org/10.1016/j.jom.2016.05.012
• Published date: 01 November 2016

Designing an efficient humanitarian supply network

Aurelie Charles

a

,

*

, Matthieu Lauras

b

, Luk N. Van Wassenhove

c

, Lionel Dupont

d

a

Universit

e de Lyon, DISP Laboratory,160 bd de l'universit

e, 69500 Bron, France

b

Universit

e de Toulouse-Mines Albi, Route de Teillet, 81013 Albi, France

c

INSEAD, Bld de Constance, 77300 Fontainebleau, France

d

Universite Toulouse-Mines Albi, Route de Teillet, 81013 Albi, France

article info

Article history:

Accepted 4 May 2016

Available online 18 October 2016

Accepted by: Mikko Ketokivi

Keywords:

Supply chain

Network design

Facility location

Humanitarian aid

Pre-positioning

Demand

Uncertainty

Efficiency

abstract

Increasingly, humanitarian organizations have opened regional warehouses and pre-positioned re-

sources locally. Choosing appropriate locations is not easy and frequently based on oppor tunities rather

than rational decisions. Dedicated decision-support systems could help human itarian practitioners

design their supply networks. Academic literature suggests the use of commercial sector models but

rarely considers the constraints and specific context of humanitarian operations, such as obtaining ac-

curate data, high uncertainties, limited budgets and increasing pressure on cost efficiency. We propose a

tooled methodology to properly support humanitarian decision makers in the design of their supply

chains. Our contribution is based on the definition of aggregate scenarios to reliably forecast demand

using past disaster data and future trends. Demand for relief items based on these scenarios is then fed to

a mixed-integer linear programming model in order to improve current supply networks. The specifi-

cations of this model have been defined in close collaboration with humanitarian workers. The mod el

allows analysis of the impact of alternative sourcing strategies and service level requirements on oper-

ational efficiency. It provides clear and actionable recommendations for a given context, bridging the gap

between academics and humanitarian logisticians. The methodology was developed to be useful to a

broad range of humanitarian organizations, and a specific applic ation to the supply chain design of the

International Federation of Red Cross and Red Crescent Societies is discussed in detail.

©2016 Published by Elsevier B.V.

1. Introduction

Humanitarian organizations (HOs) need to respond quickly to

crises, providing medical aid, shelter, food, and water to victims.

Disaster relief largely depends on logistics, so improvements in this

area have major impacts on the three performance dimensions of

relief operations: effectiveness (quality), responsiveness (time),

and efficiency (cost). In order to improve their operations, organi-

zations “have to work hard not only during disasters but also be-

tween disasters”(Van Wassenhove, 2006). Consequently, most

organizations have recently reexamined their logistics networks or

are considering doing so.

Research on supply networks is well-established and discusses

both centralized and decentralized systems. Centralized systems

enable risk pooling and are generally better in terms of safety

stocks, overhead costs, and economies of scale (Simchi-Levi et al.,

2003). Decentralized systems have better lead times and there-

fore seem to fit well with the humanitarian need for quick

response. A swift response is vital for victims but also essential for

favorable media coverage which has a strong impact on funding.

Advanced and decentralized stockpiling of a varietyof resources is

crucial for a fast, adequate, and efficient response, given the cost of

intercontinental airlifts.

Most HOs have transited to decentralized supply networks,

capitalizing on improved delivery service by getting closer to the

field (Gatignon et al., 2010). The Pan American Health Organization

(PAHO) lists short delivery times, reduced transportationcosts, and

building local capacity as the major advantages of a decentralized

system. It also points out that local shipments normally require less

documentation than international consignments. In addition, a

decentralized system increases the quality and predictability of

local purchases and supports the local economy (PAHO, 2001).

According to the International Federation of Red Cross and Red

Crescent Societies (IFRC), decentralized networks also increase

visibility and coordination with national societies and other local

nongovernmental organizations (NGO).

*Corresponding author.

E-mail addresses: a.charles@univ-lyon2.fr (A. Charles), lauras@mines-albi.fr

(M. Lauras), luk.van-wassenhove@insead.edu (L.N. Van Wassenhove), dupont@

mines-albi.fr (L. Dupont).

Contents lists available at ScienceDirect

Journal of Operations Management

journal homepage: www.elsevier.com/locate/jom

http://dx.doi.org/10.1016/j.jom.2016.05.012

0272-6963/©2016 Published by Elsevier B.V.

Journal of Operations Management 47-48 (2016) 58e70