Vehicle Supply Chains in Humanitarian Operations: Decentralization, Operational Mix, and Earmarked Funding

Abstract

T he work of international humanitarian organizations (IHOs) frequently involves operating in remote locations, decentralized decision-making, and the simultaneous implementation of development and disaster response programs. A large proportion of this work is funded by "earmarked" donations, since donors often exhibit a preference for the programs they are willing to fund. From extensive research involving qualitative descriptions and quantitative data, and applying system dynamics methodology, we model vehicle supply chains (VSCs) in support of humanitarian field operations. Our efforts encompass the often-overlooked decentralized environment by incorporating the three different VSC structures that IHOs operate, as well as examining the entire mix of development and disaster response programs, and the specific (and virtually unexplored) effects of earmarked funding. Our results suggest that earmarked funding causes a real-and negative-operational impact on humanitarian disaster response programs in a decentralized setting.

Humanitarian supply chain strategies – a review of how actors mitigate supply chain risks

“…Natural disaster Jahre & Heigh, 2008;McLachlin et al 2009;Charles, 2010;Gatignon et al 2010;Jahre & Jensen, 2010;Oloruntoba, 2010;Duran et al 2011;Pedraza Martinez et al 2011;Cozzolino et al 2012;Pedraza Martinez & Van Wassenhove, 2013;Buddas, 2014;Ergun et al 2014;Scholten et al 2014;Gralla et al 2015;Jahre & Fabbe-Costes, 2015;Stauffer et al 2015;War/terrorism Listou, 2008McLachlin et al 2009;Choi et al 2010;Jahre & Jensen, 2010;McCoy et al 2011;Pedraza Martinez et al 2011;Cozzolino et al 2012;Pedraza Martinez & Van Wassenhove, 2013;Besiou et al 2014;Buddas, 2014;Eftekhar et al 2014;Gralla et al 2015;Kunz et al 2015 Jahre & Heigh, 2008;Listou, 2008;Charles, 2010;Gatignon et al 2010;Duran et al 2011 ;Pedraza Martinez et al 2011;Besiou et al 2014;Buddas, 2014;Gralla et al 2015;Gralla et al 2015;Jahre & Fabbe-Costes, 2015;Stauffer et al 2015;Jahre et al 2016 Manufacturing risk factors Supply ris...…”

“…Other approaches include that of Kunz et al (2015), who concluded that UNHCR can save costs by centralising its fleet management programme; and that of Jahre and Heigh (2008), who found that a combination of postponement and strategic stocks significantly improves the speed, cost and quality of IFRC's response. Further, Aaki and Pedraza Martinez (2016) and Besiou et al (2014) showed that non-earmarked donations (postponement) improve operational performance; while Stauffer et al (2015) showed how temporary hubs (postponement) for their global fleet gives IFRC an opportunity to use of earmarked funding in a good way. These examples illustrate how combining different SCS may reduce certain risks without increasing others.…”

“…References in the second column represent example papers on each strategy type and how the construct has been operationalized in the humanitarian context. (Ertem et al, 2010); asset transfer mechanism (Bhattacharya et al 2013); dual sourcing (Iakovou et al, 2013); flexible sourcing (Day, 2014); buttressing supply chains (Sodhi and Tang, 2014); adaptive entity capacity (Day, 2014); armslength and transactional (Oloruntoba and Kovács, 2015) Flexible supply contracts Flexible order quantities (Lodree, 2011); framework agreements (Balcik and Ak, 2013); option contract (Wang et al 2015) Flexible transportation Operational mix for fleet (Besiou et al 2014) Information sharing Demand signal visibility (Day et al 2012 (Kunz et al 2015) ; temporary fleet hubs (Stauffer et al 2015); distribution warehouses (Hong et al 2015) We did not identify any papers that provided an overview of or framework for a set of strategies. Papers did not describe any strategy in great depth, nor was there anything related to which strategies handle which types of risk.…”

Defining logistics preparedness: a framework and research agenda

“…An exception is Nooraie and Parast (2016), who modeled the trade-off between increased investment in supply chain capabilities and reduced supply chain risks. Other examples are the studies of fleet management by Pedraza-Martinez et al (2011), Besiou et al (2014), andStauffer et al (2015). Further research could build on their approaches.…”

“…In general, it is challenging to get funds to support preparedness efforts as funding is commonly earmarked for specific operations (Van Wassenhove, 2006;Jahre and Heigh, 2008;Besiou et al 2014;Jahre et al 2016). Consequently, there is a need for an increased donor attention to preparedness efforts (Majewski, et al 2010).…”