Applicability of Performance Measurement Systems to Humanitarian Supply Chains
Applicability of Performance Measurement Systems to Humanitarian Supply Chains
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.
Evaluation Framework
Literature Based Criteria
Modern SCM revolves around supporting business strategy (effectiveness) at
minimum cost (efficiency), while being prepared for disruptions and geared towards
quickly restoring operations (resilience) (Gatignon et al. 2010). The process of
quantifying efficiency and effectiveness of actions is called performance measurement
(Neely et al. 1995) and involves the identification, tracking and communication
of performance results using performance indicators.
Moxham (2009) points out that in designing performance measurement systems,
private and public sector literature promotes the consideration of relevance, integration,
balance, strategy and improvement (Bititci et al. 2005; de Bruijn and van
Helden 2006). A performance measurement system monitors business progress, the
effect of strategies, plans, supports diagnoses and decision making, guides
operations and facilitates motivation and communication (Chan et al. 2006;
Beamon 1999) so that sustainability can be ensured.
To assess the actual strengths and weaknesses of an organization’s logistics
performance measurement system Caplice and Sheffi (1995) develop six evaluation
criteria (Table 13.1). Accordingly, a performance measurement system “should be
comprehensive, causally oriented, vertically integrated, horizontally integrated,
internally comparable and useful” (Caplice and Sheffi 1995, p. 63). Similarly,
Weidinger and Platts (2012) identify criteria such as clear structure, content,
responsibility and purpose, accountability, result-orientation, action-orientation and
communication to evaluate a performance measurement system. In this chapter we
will draw on the evaluation criteria of Caplice and Sheffi (1995) as they are
well-established and were empirically tested by the authors in two worldwide
well-known companies achieving successful results
For any organization (for-profit and non-profit) effective operations require
continual assessment of strategy to maintain consistency between efforts and the
operating world (Hatten 1982). However, although the area of performance measurement
is known to be crucial for performance improvement, research to date
provides little insight into how effective performance indicators can be selected in
the humanitarian context (Van der Laan et al. 2009). Additionally, the development
of relevant performance measurement systems would help to guide humanitarian
aid actors in their decision making, help improve the effectiveness and efficiency of
relief operations while increasing transparency and accountability of operations
(Beamon and Balcik 2008). By reflecting on the performance of humanitarian aid
supply chains improvement needs could be identified easier that can be translated
into concrete action steps as well as monitoring and standardization procedures
(Schulz and Heigh 2009).
Research from 2013 identifies ten journal articles, one master thesis and one
book chapter (Abidi and Klumpp 2013) dealing with the topic of performance
measurement in supply chains (see Table 13.2); only two of these studies (Schulz and
Heigh 2009; de Leeuw 2010) explicitly discuss performance measurement in the
context of a performance measurement system—the balanced scorecard (BSC).
However, as performance measurement and management in the humanitarian setting
is particularly difficult due to the intangibility of services, immeasurability of the
mission, unknown outcomes and the variety, interests and standards of stakeholders
(Beamon and Balcik 2008) it is necessary to explore the applicability of such a
commercial performance measurement system to the humanitarian setting first.
Therefore, following, we adapt the criteria established by Caplice and Sheffi (1995)
to the specificities of humanitarian supply chains. Table 13.3 displays the six criteria
of an ‘appropriate’ performance measurement system for the humanitarian aid setting
distinguishing between emergency and development aid based on our analysis of
literature. The next sections will further elaborate on the criteria.
Comprehensiveness
For a performance measurement system to be ‘comprehensive’ in the humanitarian
aid setting it needs to be able to consider not only the needs of beneficiaries in terms
of specific economical, religious and traditional beliefs, social practices, political
and security factors and coping mechanisms (The Sphere Project), but also the
demands of various other stakeholders such as donors, staff and volunteers,
the media, the military, suppliers and governments (Oloruntoba and Gray 2006;
IFRC 2014; Logistics Cluster 2014). A system applicable to both development and
disaster aid should therefore be able to consider multi-dimensional performance
measurements covering e.g. beneficiaries and donors satisfaction, efficient processes
between humanitarian agencies, suppliers and employees as well as key
performance indicators that show budget and costs results.
Causally Oriented
The criterion ‘causally oriented’ explores and determines whether a system allows
for the evaluation of a process in terms of its results e.g. order fulfillment rates, on
time delivery or beneficiaries’ satisfaction. Therefore, for both, development and
emergency aid, the system needs to be able to consider key performance indicators in
relation to resources allocation and output (efficiency), outcome and impact (effectiveness)
as well as adaptability (flexibility) (Beamon 1999; Buckmaster 1999;
Hofmann et al. 2004; Tatham and Hughes 2011). Furthermore, the performance
measurement system should not only be able to allow for indicators in relation to
temporary networks (Jahre et al. 2009) during the response phase of an emergency,
and permanent network covering long-term goals in terms of development, but also
the interrelation of disaster and development aid goals as these need to be linked.
Vertically Oriented
For a performance measurement system to be ‘vertically integrated’ it needs to
facilitate the translation of strategy to all decision makers within an organization at
each level of an organization, linked to a proper reward system (Caplice and Sheffi
1995). For both development and emergency aid this criterion has to be divided into
an internal and external perspective: while the internal perspective covers the vision
of humanitarian agencies at strategic level (mission effectiveness and financial
sustainability), tactical level (management of the whole supply chain) and operational
level (disaster aid: measurement at project level, development aid measurement
at program level) (Van der Laan 2009; Van Wassenhove 2006; Kovács and
Spens 2011a; Jensen 2012), the external perspective makes sure that the measurement
framework allows for the set-up of key performance indicators in relation
to the network of a humanitarian organization i.e. collaborative partners (e.g. Van
der Laan 2009; Van Wassenhove 2006; Kovács and Spens 2011a; Jensen 2012).
Horizontally Integrated
The criterion ‘horizontally integrated’ evaluates whether a performance measurement
system is able to incorporate all activities and processes in the value and supply
chain. For the humanitarian setting this implies that a system needs to be able to
cover all supply chain activities, functions as well as department i.e. inventory
management, transport and capacity planning, information management and technology
utilization; procurement, human resource management, collaboration (Pettit
and Beresford 2009, Blecken et al. 2009). Furthermore, for development aid the
system needs to allow for key performance indicators that measure mitigation
activities such as reducing the risks from natural disasters and minimizing the
negative impacts on human, social and economic environments (Moe et al. 2007). In
addition continuous improvement and lessons learnt should be considered.
Internally Comparable
A performance system can be considered ‘internally comparable’ if it ensures that
decision takers are supported in the choice they make. For a performance measurement
system to be internally comparable within the humanitarian aid setting it needs
to allow for visibility in the whole supply chain considering each country´s specification
(Van der Laan 2009) during emergencies as well as on-going development
initiatives. Furthermore, the system should allow decision makers to account for
cultural nuances that might impact activities (Tatham and Hughes 2011). Allowing to
make trade-offs between (1) conflicting interests of donors, benefit providers and
recipients (Beamon and Balcik 2008) and (2) speed, cost and accuracy is essential.
Useful
The criterion ‘useful’ evaluates whether the system is readily understandable by
decision makers and able to provide a guide for actions to be taken. Hence, for disaster
aid the system needs to provide action oriented information and for development aid
success of a project by its contribution i.e. to the promotion of peace in the area need
to be includable (McLachlin et al. 2009). An improved understanding of how to
design, implement and use humanitarian chain performance measurement is a key
lever for improving performance (de Leeuw 2010).
Empirical Based Criteria
To develop an evaluation framework for performance measurement systems in the
humanitarian supply chain context that is theory-driven as well as managerial relevant
we also sent out 20 questionnaires to academics and practitioners active in the
sector. The questionnaire was split into two parts: (1) general questions including
organization, position, experience in (humanitarian) supply chain sector and (2) an
overview of the Sheffi and Caplice (1995) criteria that we asked participants to
apply to the humanitarian SCM setting i.e. asking what specific elements have to be
taken into account for emergency and development supply chains so that a system
can be considered comprehensive, causally oriented, vertically integrated, horizontally
integrated, internally comparable and useful.
Table 13.4 gives an overview of respondents included in our study. Additionally,
we had a respondent (not included in the Table 13.4) who highlighted that he/she
did not consider a performance measurement system to be useful for her/his
organization. While the number of questionnaires incorporated here seems to be
limited they support the evaluation criteria for the humanitarian sector derived from
literature (Table 13.3). At the same time, we were able to supplement the criteria
with additional practitioner insights. Table 13.5 below displays our adapted criteria,
depicting previously from literature not identified subjects in italic.
Hella Abidi and Kirstin Scholten
 |
| Performance Measurement Systems to Humanitarian Supply Chains |
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.
Evaluation Framework
Literature Based Criteria
Modern SCM revolves around supporting business strategy (effectiveness) at
minimum cost (efficiency), while being prepared for disruptions and geared towards
quickly restoring operations (resilience) (Gatignon et al. 2010). The process of
quantifying efficiency and effectiveness of actions is called performance measurement
(Neely et al. 1995) and involves the identification, tracking and communication
of performance results using performance indicators.
Moxham (2009) points out that in designing performance measurement systems,
private and public sector literature promotes the consideration of relevance, integration,
balance, strategy and improvement (Bititci et al. 2005; de Bruijn and van
Helden 2006). A performance measurement system monitors business progress, the
effect of strategies, plans, supports diagnoses and decision making, guides
operations and facilitates motivation and communication (Chan et al. 2006;
Beamon 1999) so that sustainability can be ensured.
To assess the actual strengths and weaknesses of an organization’s logistics
performance measurement system Caplice and Sheffi (1995) develop six evaluation
criteria (Table 13.1). Accordingly, a performance measurement system “should be
comprehensive, causally oriented, vertically integrated, horizontally integrated,
internally comparable and useful” (Caplice and Sheffi 1995, p. 63). Similarly,
Weidinger and Platts (2012) identify criteria such as clear structure, content,
responsibility and purpose, accountability, result-orientation, action-orientation and
communication to evaluate a performance measurement system. In this chapter we
will draw on the evaluation criteria of Caplice and Sheffi (1995) as they are
well-established and were empirically tested by the authors in two worldwide
well-known companies achieving successful results
For any organization (for-profit and non-profit) effective operations require
continual assessment of strategy to maintain consistency between efforts and the
operating world (Hatten 1982). However, although the area of performance measurement
is known to be crucial for performance improvement, research to date
provides little insight into how effective performance indicators can be selected in
the humanitarian context (Van der Laan et al. 2009). Additionally, the development
of relevant performance measurement systems would help to guide humanitarian
aid actors in their decision making, help improve the effectiveness and efficiency of
relief operations while increasing transparency and accountability of operations
(Beamon and Balcik 2008). By reflecting on the performance of humanitarian aid
supply chains improvement needs could be identified easier that can be translated
into concrete action steps as well as monitoring and standardization procedures
(Schulz and Heigh 2009).
Research from 2013 identifies ten journal articles, one master thesis and one
book chapter (Abidi and Klumpp 2013) dealing with the topic of performance
measurement in supply chains (see Table 13.2); only two of these studies (Schulz and
Heigh 2009; de Leeuw 2010) explicitly discuss performance measurement in the
context of a performance measurement system—the balanced scorecard (BSC).
However, as performance measurement and management in the humanitarian setting
is particularly difficult due to the intangibility of services, immeasurability of the
mission, unknown outcomes and the variety, interests and standards of stakeholders
(Beamon and Balcik 2008) it is necessary to explore the applicability of such a
commercial performance measurement system to the humanitarian setting first.
Therefore, following, we adapt the criteria established by Caplice and Sheffi (1995)
to the specificities of humanitarian supply chains. Table 13.3 displays the six criteria
of an ‘appropriate’ performance measurement system for the humanitarian aid setting
distinguishing between emergency and development aid based on our analysis of
literature. The next sections will further elaborate on the criteria.
Comprehensiveness
For a performance measurement system to be ‘comprehensive’ in the humanitarian
aid setting it needs to be able to consider not only the needs of beneficiaries in terms
of specific economical, religious and traditional beliefs, social practices, political
and security factors and coping mechanisms (The Sphere Project), but also the
demands of various other stakeholders such as donors, staff and volunteers,
the media, the military, suppliers and governments (Oloruntoba and Gray 2006;
IFRC 2014; Logistics Cluster 2014). A system applicable to both development and
disaster aid should therefore be able to consider multi-dimensional performance
measurements covering e.g. beneficiaries and donors satisfaction, efficient processes
between humanitarian agencies, suppliers and employees as well as key
performance indicators that show budget and costs results.
Causally Oriented
The criterion ‘causally oriented’ explores and determines whether a system allows
for the evaluation of a process in terms of its results e.g. order fulfillment rates, on
time delivery or beneficiaries’ satisfaction. Therefore, for both, development and
emergency aid, the system needs to be able to consider key performance indicators in
relation to resources allocation and output (efficiency), outcome and impact (effectiveness)
as well as adaptability (flexibility) (Beamon 1999; Buckmaster 1999;
Hofmann et al. 2004; Tatham and Hughes 2011). Furthermore, the performance
measurement system should not only be able to allow for indicators in relation to
temporary networks (Jahre et al. 2009) during the response phase of an emergency,
and permanent network covering long-term goals in terms of development, but also
the interrelation of disaster and development aid goals as these need to be linked.
Vertically Oriented
For a performance measurement system to be ‘vertically integrated’ it needs to
facilitate the translation of strategy to all decision makers within an organization at
each level of an organization, linked to a proper reward system (Caplice and Sheffi
1995). For both development and emergency aid this criterion has to be divided into
an internal and external perspective: while the internal perspective covers the vision
of humanitarian agencies at strategic level (mission effectiveness and financial
sustainability), tactical level (management of the whole supply chain) and operational
level (disaster aid: measurement at project level, development aid measurement
at program level) (Van der Laan 2009; Van Wassenhove 2006; Kovács and
Spens 2011a; Jensen 2012), the external perspective makes sure that the measurement
framework allows for the set-up of key performance indicators in relation
to the network of a humanitarian organization i.e. collaborative partners (e.g. Van
der Laan 2009; Van Wassenhove 2006; Kovács and Spens 2011a; Jensen 2012).
Horizontally Integrated
The criterion ‘horizontally integrated’ evaluates whether a performance measurement
system is able to incorporate all activities and processes in the value and supply
chain. For the humanitarian setting this implies that a system needs to be able to
cover all supply chain activities, functions as well as department i.e. inventory
management, transport and capacity planning, information management and technology
utilization; procurement, human resource management, collaboration (Pettit
and Beresford 2009, Blecken et al. 2009). Furthermore, for development aid the
system needs to allow for key performance indicators that measure mitigation
activities such as reducing the risks from natural disasters and minimizing the
negative impacts on human, social and economic environments (Moe et al. 2007). In
addition continuous improvement and lessons learnt should be considered.
Internally Comparable
A performance system can be considered ‘internally comparable’ if it ensures that
decision takers are supported in the choice they make. For a performance measurement
system to be internally comparable within the humanitarian aid setting it needs
to allow for visibility in the whole supply chain considering each country´s specification
(Van der Laan 2009) during emergencies as well as on-going development
initiatives. Furthermore, the system should allow decision makers to account for
cultural nuances that might impact activities (Tatham and Hughes 2011). Allowing to
make trade-offs between (1) conflicting interests of donors, benefit providers and
recipients (Beamon and Balcik 2008) and (2) speed, cost and accuracy is essential.
Useful
The criterion ‘useful’ evaluates whether the system is readily understandable by
decision makers and able to provide a guide for actions to be taken. Hence, for disaster
aid the system needs to provide action oriented information and for development aid
success of a project by its contribution i.e. to the promotion of peace in the area need
to be includable (McLachlin et al. 2009). An improved understanding of how to
design, implement and use humanitarian chain performance measurement is a key
lever for improving performance (de Leeuw 2010).
Empirical Based Criteria
To develop an evaluation framework for performance measurement systems in the
humanitarian supply chain context that is theory-driven as well as managerial relevant
we also sent out 20 questionnaires to academics and practitioners active in the
sector. The questionnaire was split into two parts: (1) general questions including
organization, position, experience in (humanitarian) supply chain sector and (2) an
overview of the Sheffi and Caplice (1995) criteria that we asked participants to
apply to the humanitarian SCM setting i.e. asking what specific elements have to be
taken into account for emergency and development supply chains so that a system
can be considered comprehensive, causally oriented, vertically integrated, horizontally
integrated, internally comparable and useful.
Table 13.4 gives an overview of respondents included in our study. Additionally,
we had a respondent (not included in the Table 13.4) who highlighted that he/she
did not consider a performance measurement system to be useful for her/his
organization. While the number of questionnaires incorporated here seems to be
limited they support the evaluation criteria for the humanitarian sector derived from
literature (Table 13.3). At the same time, we were able to supplement the criteria
with additional practitioner insights. Table 13.5 below displays our adapted criteria,
depicting previously from literature not identified subjects in italic.
0 Response to "Applicability of Performance Measurement Systems to Humanitarian Supply Chains"
Post a Comment