Paul D. Larson, Ph.D. CN Professor of SCM Director, Transport Institute Head, SCM Department

1. Risk and Relationships in Humanitarian Supply Chains Paul D. Larson, Ph.D. CN Professor of SCM Director, Transport Institute Head, SCM Department University of Manitoba larson@cc.umanitoba.ca Wilfrid Laurier University November 26, 2010

2. Prosperity Mobility Sustainability

3. The PMAC Project Public Sector SCM

4. Business Logistics Humanitarian Logistics

5. Business and Relief Logistics “There are clear parallels between business logistics and relief logistics, but the transfer of knowledge between the two has been limited and the latter remains relatively unsophisticated.” Source: Pettit and Beresford (2005, p. 314)

6. Business Logistics vs. Relief Logistics

7. Multiple Stakeholders Donors 3PLs Aid agencies Humanitarian aid supply network Suppliers Recipients Military Other NGOs Governments Adapted from: Kovács and Spens (2007, p. 106)

8. HUMLOG Group (www.humloggroup.org) Aim: To research the area of humanitarian logistics in disaster preparedness, response and recovery with the intention of influencing future activities in a way that will provide measurable benefit to persons requiring assistance. Cardiff University, UK Cranfield University, UK Hanken School of Economics, Finland Jönköping International Business School, Sweden Kwame Nkrumah Univ. of Science & Technology, Ghana National Defence University of Finland Norwegian Defence Command and Staff College Norwegian School of Management Thammasat University, Thailand United Nations Joint Logistics Centre (UNJLC) University of Manitoba, Canada

9. 854 million people do not have enoughto eat - more than the populations ofUSA, Canada and the European Union. Every five seconds a child dies because she or he is hungry. Source: The State of Food Insecurity in the World 2006, FAO.

10. Kluger, Jeffrey (2008), “How America's Children Packed On the Pounds,” Time, June 12. (http://www.time.com/time/health/article/0,8599,1813700,00.html) “… a whopping 32% of all American children now carry more pounds than they should.” (http://www.betterhealthusa.com/public/227.cfm) “More than two-thirds of Americans are overweight and 30 per cent suffer from obesity but there has been a dramatic increase in childhood obesity. In the United States, the percentage of overweight or obese children has doubled over the past 30 years to 25 per cent of the under-19 population.”

11. Some numbers 540 = the number of children who will die during the next 45 minutes due to hunger and malnutrition. 1/6 = the portion of people in the world today who are undernourished. = the number of humanitarian aid workers murdered in 2008. 122

12. Food and AgricultureOrganization of theUN (www.fao.org)

13. Urgent needs; lagging practices Humanitarian aid agencies are twenty years behind the large corporations in adopting today’s fundamental tools of logistics and SCM (Fritz Institute). Silvia Spring, “Relief When You Need It: Can FedEx, DHL andTNT bring the delivery of emergency aid into the 21st century?”Newsweek International Edition, September 11, 2006.

14. The Four Quadrants

15. Humanitarian NGOs engage in two broad types of activities: (1) Relief activities: relief for victims of large-scale emergencies. These short-term activities focus on providing goods and services to minimize immediate risks to human health and survival. (2) Development activities: longer-term aid, focusing on community self-sufficiency and sustainability. These activities include establishing permanent and reliable transportation, healthcare, housing, and food. Beamon, Benita M. & Burcu Balcik (2008), “Performance measurement in humanitarian relief chains,” International Journal of Public Sector Manage-ment, Vol. 21, No. 1, pp. 4-25.

16. Monument to Canadian Aid Workers,Rideau Falls Park, Ottawa, Canada 2009 Humanitarian Logistics Conference: Relationship Building in Humanitarian Relief Supply Chains October 15-16, Ottawa

17. Relationship Building in Humanitarian Supply Chains 8:00 a.m. Breakfast and Registration 8:25 a.m. Opening Remarks – Paul D. Larson, Director, Transport Institute 8:30 a.m. Opening Keynote – Kevin McCort, President and CEO, CARE Canada 9:00 a.m. Session One Vanessa Brown, Logistics Officer, Canadian Foodgrains Bank Dave Carlstrom, President and CEO, Air Serv International 10:15 a.m. Break 10:30 a.m. Session Two Birgitte Olsen, Head of Logistics, IFRC Nancy Rivard, President, Airline Ambassadors International 12:00 p.m. Luncheon, with keynote speaker George Fenton, Associate Supply Chain Director, World Vision International 1:30 p.m. Session Three Mary Ennis, Executive Director, Disabled Peoples’ International Major Paul Gillies, Canadian Forces Joint HQ/DART 2:45 p.m. Break 3:00 p.m. Session Four Amreen Choudhury, Sr. Program Officer – Roster Unit, CANADEM Jeff Ashcroft, Founder, World Org. for Relief Logistics Development (WORLD) 4:15 p.m. Closing Remarks – Gyöngyi Kovács, Director, HumLog Institute 6:15 p.m. Reception, with art exhibit; Laura Archer, Artist HUMLOG Group

18. A Note on Methodology • Case-based research (Yin, 2003, 2009) • "how" or "why" questions • cannot control behavioural events • focus on contemporary events • Grounded research (Strauss & Corbin, 1998) • The two work well together (Locke, 2001) • Data: mostly qualitative interviews (~ 1 hr.) • plus documents, observations, etc. • Analysis aided by qualitative software (NVivo8)

19. Humanitarian Supply Chain Relationships

20. Types of Relationships humanitarian NGOs humoneytarian humilitarian Business Military humanitariUN B2B United Nations

21. Internal (intra-NGO) Relationships • Relief vs. development • Global (HQ) vs. local (in the field) • Cross-functional

22. Partnership Characteristics • High level of cooperation • Costly to implement • Extra communication • Coordination • Risk sharing Source: Lambert and Knemeyer (2004)

23. Partnership Drivers • Asset and cost efficiencies • Customer service enhancements • Marketing advantages • Profit growth or stability Source: Lambert and Knemeyer (2004)

24. Partnership Facilitators • Compatibility of corporate cultures • Compatibility of management philosophy and techniques • Strong sense of mutuality • Symmetry between the two parties Source: Lambert and Knemeyer (2004)

25. Management Components (for Partnerships) • Planning • Joint operating controls • Communications • Risk/reward sharing Source: Lambert and Knemeyer (2004)

26. Relationships Organisation A Organisation B • Compatibility • mission/strategy/agenda • organisational culture • technology • Complementarity • administration • advocacy • fund-raising • operations (e.g. logistics)

27. Department of National Defence/Canadian Forces Protecting Canada. Protecting Canadians and defending our sovereignty is our first priority. Defending North America. We work with Canada’s closest ally (USA) to defend North America. Contributing to International Peace and Security. We contribute to international peace and security through operations around the world. www.forces.gc.ca

28. Canadian Red Cross Mission: to improve the lives of vulnerable people by mobilizing the power of humanity in Canada and around the world. • Fundamental Principles • humanity • impartiality • neutrality • independence www.redcross.ca

29. To demonstrate God’s love by working among people suffering from poverty, conflict, oppression and natural disaster. MCC strives for peace, justice and the dignity of all people by sharing our experiences, resources and faith in Jesus Christ. I was hungry and you gave me food, I was thirsty and you gave me something to drink, I was a stranger and you welcomed me. Matthew 25:35-36 www.mcc.org

30. Office for the Coordinationof Humanitarian Affairs OCHA’s mission is to mobilise and coordinateeffective and principled humanitarian action inpartnership with national and internationalactors in order to:• alleviate human suffering in disasters & emergencies• advocate for the rights of people in need• promote preparedness and prevention• facilitate sustainable solutions http://ochaonline.un.org

31. “To cut through the inefficiency and unintended consequences of aid efforts, observers have long called for better coordination among humanitarian, political, and military organizations.” (p. 1027) Seybolt, Taylor B. (2009), “Harmonizing the Humanitarian Aid Network:Adaptive Change in a Complex System,” International Studies Quarterly, Vol. 53, No. 4, pp. 1027–1050.

32. “… the humanitarian assistance community—people in need, national governments, UN agencies, non-governmental organizations, political missions, military contingents and donors—as a complex, open, adaptive system.” (p. 1028) Seybolt (2009)

33. Seybolt (2009)

34. Constraints on network development • Sudden, massive workload; urgency • Lack of trust among the players • Political interests of donor governments Seybolt (2009, p. 1029)

35. How to overcome the constraints? • Exchange information • Quantity • Quality • But … • Massive workload & information overload • Trust & information sharing Seybolt (2009, p. 1029)

36. Information sharing Trust Coordination Compatibility Complementarity Information overload Supply chain performance

37. Supply Chain Risk Management In the Humanitarian World

38. ABI/Inform articles on “supply chain” and “risk management”

39. Types of Risk • Matching supply and demand • Late shipments; inaccurate forecasts • Stock-outs, back orders, and lost sales • Volatility (fuel, currency, commodities) • Interruptions • - Earthquakes - Labour strikes • - Hurricanes - Terrorist attacks • - Tsunamis - Pandemics

40. Risk Management vs. Crisis Management Risk management Resources squandered? proactive Approach Crisis management Resources conserved reactive occurs fails to occur Interruption

41. Reducing disaster risk: A challenge for development “Natural disasters exert an enormous toll on develop-ment. In doing so, they pose a significant threat to prospects for achieving the Millennium Development Goals … of halving extreme poverty by 2015.” “… the process of development itself has a huge impact — both positive and negative — on disaster risk.” UNDP (2004), Reducing Disaster Risk: A Challenge for Development, New York.

42. Two types of disaster risk management: • Prospective – integrated into sustainable development planning; medium-term disaster risk reduction. • Compensatory – disaster preparedness and response; immediate-term risk reduction. UNDP (2004), Reducing Disaster Risk: A Challenge for Development, New York.

43. Bringing disaster risk reduction and development concerns closer together requires three steps: • Data and tools to track the relationship between development policy and disaster risk. • Best development practices that reduce disaster risk. • Political will to re-orient the development and disaster management sectors. UNDP (2004), Reducing Disaster Risk: A Challenge for Development, New York.

44. Patterns of Risk Four natural disaster categories (earthquake, cyclone, flood and drought), are responsible for 94% of deaths. “… the translation of drought into famine is mediated by armed conflict, internal displacement, HIV/AIDS, poor governance and economic crisis.” UNDP (2004), Reducing Disaster Risk: A Challenge for Development, New York.

45. UNDP (2004), Reducing Disaster Risk: A Challenge for Development, New York.

47. Kovács, Gyöngyi & Peter Tatham (2009), Responding to Disruptions in the Supply Network – from Dormant to Action,” Journal of Business Logistics, Vol. 30, No. 2, pp. 215-229.

48. War In action Relief Peace Dormant Preparation Lean Agile Adapted from: Kovács & Tatham (2009)

50. Intelligence War In action Relief Development Peace Dormant Preparation Lean Agile Adapted from: Kovács & Tatham (2009)