Applicability of Performance Measurement Systems to Humanitarian Supply Chains
Applicability of Performance Measurement Systems to Humanitarian Supply Chains
Springer International Publishing Switzerland 2015
Hella Abidi and Kirstin Scholten
Abstract Recently performance measurement in humanitarian supply chains has
become a key driver to ensure efficiency and effectiveness of operations and overall
sustainability. The purpose of this paper is to evaluate current performance measurement
systems from the commercial sector for their applicability to the specificities
of the humanitarian supply chain sector. In doing so, we adapt the evaluation
criteria for an ‘appropriate’ performance measurement system from Caplice and
Sheffi (1995) to the humanitarian supply chain context and apply them to wellknown
performance measurement framework from the commercial sector
(Balanced Score Card, SCOR Model and Performance Prism). Findings indicate
that the analyzed performance measurement frameworks have some potential to
enable effective and efficient performance measurement of supply chains in the
humanitarian aid sector in light of the established criteria.
Introduction
Non-profit organizations are under extreme pressure to demonstrate their achievements
(Moxham 2009; Moxham and Boaden 2007) to numerous stakeholders to
ensure continuity of funding. Owing to the central role of logistics in any kind of
operation (VanWassenhove 2006), especially the effectiveness and efficiency of the
supply chain are important indicators of performance (Beamon and Balcik 2008) in
the humanitarian aid context. Even though the attention to the role of logistics in the
humanitarian sector has increased significantly, to date, only 20 % of humanitarian
organizations measure performance consistently; 25 % declare to control a limited
amount of indicators and 55 % do not monitor or report any performance measurement
indicators (Blecken 2010). There are multiple reasons for this including
non-existence of data, a chaotic and complex environment, contradicting goals of
long-term versus short-term disaster response as well as limited information technology
capacity and infrastructure (Van der Laan et al. 2009; Blecken et al. 2009;
Davidson 2006; Widera and Hellingrath 2011; Tatham and Hughes 2011; Jahre and
Heigh 2008). However, to achieve sustainable business success an organization has
to use relevant performance measures (Neely et al. 2000). Furthermore, to be able to
measure effectiveness and efficiency of logistics a suitable financial and
non-financial performance measurement system is needed that can inform the
numerous stakeholders at the strategic, tactical and operational level (Long 1997)
ensuring simplified communication among supply chain actors and increased
transparency of supply chain and logistics processes (Gunasekaran and Kobu 2007).
A performance measurement system is a central part of performance measurement
guiding management towards better decision making (Caplice and Sheffi 1995), as
either measurement or management separately lead to incomplete conclusions
(Srimai et al. 2011).
As no such system exists for the humanitarian aid sector, the aim of this chapter
is to (1) explore and develop criteria of a good performance measurement system
applicable to the humanitarian supply chain context and (2) evaluate the suitability
—in terms of the developed criteria—of well-known systems from the commercial
setting (Balanced Score Card, SCOR Model and Performance Prism) in monitoring
supply chain management (SCM) performance and achieving sustainable results.
This chapter is structured as follows: the first section will set the scene by outlining
the specificities of the humanitarian sector that need to be considered when creating
evaluation criteria for a humanitarian performance measurement system. Next,
drawing on Caplice and Sheffi (1995) an overview of what is considered to be a
good performance measurement system in the commercial sector for adaption to the
humanitarian setting will be outlined. Following, we evaluate existing commercial
performance measurement systems applying the criteria developed for the
humanitarian supply chain context. The final section concludes with recommendations
for future developments in the area of supply chain performance measurement
and management.
Theoretical Background
The centrality of SCM to any relief operation was established by the seminal work
of Long and Wood (1995), defining humanitarian SCM as an umbrella term for
providing disaster relief and long term support for developing regions. Broadly
speaking, foreign aid-assisted projects can be categorised as development aid and
emergency aid. Whereas development aid is constantly given to a country over
longer periods of time in the form of education, roads, goods etc. in order to
develop, emergency aid is provided to countries over a shorter period after e.g. a
disaster in order to provide basic needs to the people experiencing difficulties in
these situations.
The overall aim of humanitarian aid is to rapidly provide relief (often a matter of
life or death) and alleviate suffering with the intention to firstly safe and sustain
lives and then (re)create self-sufficiency (Thévenaz and Resodihardjo 2010). While
both, development and emergency aid are aimed at reducing vulnerability
(McEntire 2004), reducing the risks from disasters is central to the success of
development itself (International Federation of Red Cross and Red Crescent
Societies 2002). However, Oloruntoba and Gray (2009) point out that there appears
to be an inadequate link between emergency and development aid coordination in
many organizations even though there is a complex relationship between the two:
losses from natural disaster can arise due to unsustainable development initiatives,
while disaster can wipe out years of development in a matter of seconds.
Humanitarian supply chains may be partially commercial as for-profit companies
undertake production and some of the transport and logistics activities (Jahre et al.
2009). Furthermore, Ernst (2003) suggests that commercial and non-profit logistics
have a lot in common since both are managing the flow of goods, information and
finances. Specific logistical activities and functions during humanitarian operations
include inventory management, transport and capacity planning, information
management and technology utilization, procurement, human resource management
and collaboration with chain partners (Pettit and Beresford 2009; Blecken et al. 2009). Specifically development supply chains are often compared to ‘regular’
commercial supply chains as they are predictable and stable in terms of structure
and activities. The management of emergency chains on the other hand differs on
various levels (Beamon and Balcik 2008) due to the unique and very complex
nature of disasters (Long and Wood 1995). While ‘regular’ SCM usually deals with
a predetermined set of suppliers, manufacturing sites, business partners and stable
or at least predictable demand, disaster SCM is characterized by large scale
operations, irregular demand, unusual constraints in large scale emergencies and
unreliable, or non-existent supply and transportation information—primarily
unknown factors (Kovács and Spens 2007). Due to the nature of the unknown
(locations, type and size of events, politics and culture, organizations involved) the
configuration of a distribution network and relationships within is challenging
(Beamon 2004). Furthermore, disaster management organizations deal with
(almost) zero lead time in their supply chain as there may be no advance warning of
a crisis, which in turn affects inventory availability, procurement and distribution.
Often information is very limited at the beginning of a disaster (Tomasini and Van
Wassenhove 2009) requiring organizations to make trade-offs between speed, cost
and accuracy regarding the type and quantity of goods (Maon et al. 2009).
Further complicating humanitarian SCM is the nature of funding and conflicting
interests of donors, benefit providers and recipients (Beamon and Balcik 2008).
Investments in research, information systems, infrastructure and other long-term
projects are restricted (Blecken 2010) leading to inadequate use of technology or
even non-existence of IT (Thomas and Kopczak 2005) that is crucial for effective
and efficient supply chain operations. Additionally, there is a shortage of qualified
logisticians in humanitarian organizations. A survey conducted by Oloruntoba and
Gray (2003 in Oloruntoba and Gray 2006) shows that 80 % of 45 international aid
organizations have a specific staff member for logistics and transport of which only
45 % have a formal qualification in logistics, transport or related areas. This can
partially be explained with the high turnover of staff in the area (up to 80 %) leading
to many workers with limited supply chain experience and training (Stephenson Jr,
2005). The unique and complex setting for disaster supply chains and these
problems stand in contrast to the pressure from the numerous and very diverse
stakeholders to show outcome driven results (Beamon and Balcik 2008) largely
influenced by effective and efficient SCM.
Springer International Publishing Switzerland 2015
Hella Abidi and Kirstin Scholten
Abstract Recently performance measurement in humanitarian supply chains has
become a key driver to ensure efficiency and effectiveness of operations and overall
sustainability. The purpose of this paper is to evaluate current performance measurement
systems from the commercial sector for their applicability to the specificities
of the humanitarian supply chain sector. In doing so, we adapt the evaluation
criteria for an ‘appropriate’ performance measurement system from Caplice and
Sheffi (1995) to the humanitarian supply chain context and apply them to wellknown
performance measurement framework from the commercial sector
(Balanced Score Card, SCOR Model and Performance Prism). Findings indicate
that the analyzed performance measurement frameworks have some potential to
enable effective and efficient performance measurement of supply chains in the
humanitarian aid sector in light of the established criteria.
Introduction
Non-profit organizations are under extreme pressure to demonstrate their achievements
(Moxham 2009; Moxham and Boaden 2007) to numerous stakeholders to
ensure continuity of funding. Owing to the central role of logistics in any kind of
operation (VanWassenhove 2006), especially the effectiveness and efficiency of the
supply chain are important indicators of performance (Beamon and Balcik 2008) in
the humanitarian aid context. Even though the attention to the role of logistics in the
humanitarian sector has increased significantly, to date, only 20 % of humanitarian
organizations measure performance consistently; 25 % declare to control a limited
amount of indicators and 55 % do not monitor or report any performance measurement
indicators (Blecken 2010). There are multiple reasons for this including
non-existence of data, a chaotic and complex environment, contradicting goals of
long-term versus short-term disaster response as well as limited information technology
capacity and infrastructure (Van der Laan et al. 2009; Blecken et al. 2009;
Davidson 2006; Widera and Hellingrath 2011; Tatham and Hughes 2011; Jahre and
Heigh 2008). However, to achieve sustainable business success an organization has
to use relevant performance measures (Neely et al. 2000). Furthermore, to be able to
measure effectiveness and efficiency of logistics a suitable financial and
non-financial performance measurement system is needed that can inform the
numerous stakeholders at the strategic, tactical and operational level (Long 1997)
ensuring simplified communication among supply chain actors and increased
transparency of supply chain and logistics processes (Gunasekaran and Kobu 2007).
A performance measurement system is a central part of performance measurement
guiding management towards better decision making (Caplice and Sheffi 1995), as
either measurement or management separately lead to incomplete conclusions
(Srimai et al. 2011).
As no such system exists for the humanitarian aid sector, the aim of this chapter
is to (1) explore and develop criteria of a good performance measurement system
applicable to the humanitarian supply chain context and (2) evaluate the suitability
—in terms of the developed criteria—of well-known systems from the commercial
setting (Balanced Score Card, SCOR Model and Performance Prism) in monitoring
supply chain management (SCM) performance and achieving sustainable results.
This chapter is structured as follows: the first section will set the scene by outlining
the specificities of the humanitarian sector that need to be considered when creating
evaluation criteria for a humanitarian performance measurement system. Next,
drawing on Caplice and Sheffi (1995) an overview of what is considered to be a
good performance measurement system in the commercial sector for adaption to the
humanitarian setting will be outlined. Following, we evaluate existing commercial
performance measurement systems applying the criteria developed for the
humanitarian supply chain context. The final section concludes with recommendations
for future developments in the area of supply chain performance measurement
and management.
Theoretical Background
The centrality of SCM to any relief operation was established by the seminal work
of Long and Wood (1995), defining humanitarian SCM as an umbrella term for
providing disaster relief and long term support for developing regions. Broadly
speaking, foreign aid-assisted projects can be categorised as development aid and
emergency aid. Whereas development aid is constantly given to a country over
longer periods of time in the form of education, roads, goods etc. in order to
develop, emergency aid is provided to countries over a shorter period after e.g. a
disaster in order to provide basic needs to the people experiencing difficulties in
these situations.
The overall aim of humanitarian aid is to rapidly provide relief (often a matter of
life or death) and alleviate suffering with the intention to firstly safe and sustain
lives and then (re)create self-sufficiency (Thévenaz and Resodihardjo 2010). While
both, development and emergency aid are aimed at reducing vulnerability
(McEntire 2004), reducing the risks from disasters is central to the success of
development itself (International Federation of Red Cross and Red Crescent
Societies 2002). However, Oloruntoba and Gray (2009) point out that there appears
to be an inadequate link between emergency and development aid coordination in
many organizations even though there is a complex relationship between the two:
losses from natural disaster can arise due to unsustainable development initiatives,
while disaster can wipe out years of development in a matter of seconds.
Humanitarian supply chains may be partially commercial as for-profit companies
undertake production and some of the transport and logistics activities (Jahre et al.
2009). Furthermore, Ernst (2003) suggests that commercial and non-profit logistics
have a lot in common since both are managing the flow of goods, information and
finances. Specific logistical activities and functions during humanitarian operations
include inventory management, transport and capacity planning, information
management and technology utilization, procurement, human resource management
and collaboration with chain partners (Pettit and Beresford 2009; Blecken et al. 2009). Specifically development supply chains are often compared to ‘regular’
commercial supply chains as they are predictable and stable in terms of structure
and activities. The management of emergency chains on the other hand differs on
various levels (Beamon and Balcik 2008) due to the unique and very complex
nature of disasters (Long and Wood 1995). While ‘regular’ SCM usually deals with
a predetermined set of suppliers, manufacturing sites, business partners and stable
or at least predictable demand, disaster SCM is characterized by large scale
operations, irregular demand, unusual constraints in large scale emergencies and
unreliable, or non-existent supply and transportation information—primarily
unknown factors (Kovács and Spens 2007). Due to the nature of the unknown
(locations, type and size of events, politics and culture, organizations involved) the
configuration of a distribution network and relationships within is challenging
(Beamon 2004). Furthermore, disaster management organizations deal with
(almost) zero lead time in their supply chain as there may be no advance warning of
a crisis, which in turn affects inventory availability, procurement and distribution.
Often information is very limited at the beginning of a disaster (Tomasini and Van
Wassenhove 2009) requiring organizations to make trade-offs between speed, cost
and accuracy regarding the type and quantity of goods (Maon et al. 2009).
Further complicating humanitarian SCM is the nature of funding and conflicting
interests of donors, benefit providers and recipients (Beamon and Balcik 2008).
Investments in research, information systems, infrastructure and other long-term
projects are restricted (Blecken 2010) leading to inadequate use of technology or
even non-existence of IT (Thomas and Kopczak 2005) that is crucial for effective
and efficient supply chain operations. Additionally, there is a shortage of qualified
logisticians in humanitarian organizations. A survey conducted by Oloruntoba and
Gray (2003 in Oloruntoba and Gray 2006) shows that 80 % of 45 international aid
organizations have a specific staff member for logistics and transport of which only
45 % have a formal qualification in logistics, transport or related areas. This can
partially be explained with the high turnover of staff in the area (up to 80 %) leading
to many workers with limited supply chain experience and training (Stephenson Jr,
2005). The unique and complex setting for disaster supply chains and these
problems stand in contrast to the pressure from the numerous and very diverse
stakeholders to show outcome driven results (Beamon and Balcik 2008) largely
influenced by effective and efficient SCM.
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