Emergency Preparedness of Humanitarian Organizations: A System Dynamics Approach
Emergency Preparedness of Humanitarian Organizations: A System Dynamics Approach
Chenrong Ni, Robert de Souza, Qing Lu and Mark Goh
Abstract In recent decades, there is an increasing trend in the occurrence and
complexity of disasters, while donors are becoming more demanding on the performance
and accountability. Hence, there is great pressure on humanitarian
organizations to improve the effectiveness and efficiency of their relief operations.
For effective response to an emergency, humanitarian organizations must prepare
their existing resources well before its start. This chapter develops a system
dynamics model as a decision-aid tool for humanitarian organizations to prepare
beforehand. The model is able to evaluate the effectiveness of common preparedness
strategies such as prepositioning and visualize their impacts in a competitive
environment with two humanitarian organizations. Simulation results show that
strategy that reduces the lead time is always efficient but not so for prepositioning
strategy. In the case of only the small organization prepositioning stocks, the overall
performance would be worse. The study would help improve the operating efficiency
of humanitarian organizations as well as their sustainability.
Introduction
As most disasters are characterized by a surge in demand for supplies and other
resources such as manpower, relief efforts are geared at procuring and delivering
goods in a timely manner, and this, in turn, demands detailed preparation before the
emergency. However, the preparedness in relief operations is complicated by the
demand uncertainty and various operational constraints. For example, humanitarian
organizations (HOs) are often short of funding for their emergency preparations as
most of their emergency funding are reactive in nature (Walker and Pepper 2007).
In emergency preparedness, one common strategy used by the HOs is proactive
contingency planning (Chakravarty 2011). Based on the plan, HOs would invest in a
small range of selected inventory and storage facilities, and work in collaboration
with suppliers and service providers to prepare for an expected surge in demand.
However, most existing literature assumes that the HO is preparing in isolation. In
practice, the situation is much more complex. Whenever there is a disaster, there
will be a number of HOs activated for relief operations, ranging from the local ones
to the international ones. They compete, interfere, or even battle for the limited
resources (Holguín-Veras et al. 2012). Such dynamic interactions should be incorporated
when analyzing the effectiveness of supply chain strategies. However, there
are very few studies examining such a dynamic interaction among the HOs. This
chapter is thus initiated to examine the effectiveness of emergency preparedness
strategies such as supply prepositioning and lead time reduction strategies like rapid
needs assessment in a competitive environment under resource constraints. Such a
study may help to improve the efficiency as well as sustainability of HOs in their
relief operations.
To study the interaction of the multiple players in relief operations, we use a
system dynamics (SD) model as the analytical tool. Among the various tools and
techniques, SD is chosen due to its advantage in dealing with dynamic complexity.
An SD model will be developed to simulate humanitarian supply chains for two
HOs under a funding constraint. The model will help users visualize the dynamic
interactions among the different parties and provide insight into the trade-offs of
each decision, and hence, facilitate effective and sustainable responses.
The rest of the chapter is organized as follows: we first conduct a literature
review on the humanitarian logistics sector in the Asia-Pacific, as well as their
challenges in emergency preparedness. The SD methodology is then introduced in
Sect. 7.3, and a SD model on emergency preparedness strategies is developed. We
then present the SD simulation results in Sect. 7.4. The chapter concludes with a
discussion on the model implications and future research suggestions.
Literature Review
Jiang et al. (2012) have provided an overview of the humanitarian logistics structure
in Asia and pinpoints the main challenges involved to draw public attention. In
particular, HOs often face lack of government support and basic infrastructure.
There are also coordination and communication problems both between the HOs
and the other parties such as the local government and the private sector as well as
among the HOs themselves.
To obtain an in-depth understanding of the humanitarian logistics sector in the
Asia-Pacific, the recent work of de Souza and Stumpf (2012) is worth a visit. With
contributors from academia, UN humanitarian agencies, international HOs, and
commercial companies working in the Asia-Pacific, this provides a vivid account of
relief operations from the ground, and highlights the challenges and opportunities in
the field from various perspectives as well. One can find descriptions of large scale
disasters in the region such as Cyclone Nargis in 2008 and the Bangkok flood
in 2011.
For more understanding on the sector, Decker et al. (2013) compared humanitarian
and commercial supply chain practices. In the commercial world, supply
chain managers have strived to develop risk conscious management practices to
enhance the resilience of their supply chain to large scale disruptions. At the same
time, humanitarian organizations professionalized their approach of responding to
disasters within a short lead time. Consequently, they could operate effectively in
disruptive environments and potentially provide superior strategies. SD simulation
was applied to yield performance benchmarks in terms of the disruption impact and
the associated response costs.
While the literature mainly focuses on international HOs, small local HOs are
often the key players for the effectiveness of relief operations. Sulistiono and
Mulyadi (2012) have conducted a case study of a local HO in Indonesia, Yayasan
Sosial Bina Sejahtera. Their study shares the experience of an local HO in conducting
humanitarian operations for a recent disaster in Indonesia. This experience
presents the capacity, capabilities, and initiatives by a typical local HO that is not
specialized in disaster response. The experience also illustrates humanitarian
operation processes conducted by the local HOs. The study can be used as a basis
for further capacity building initiatives of the local HOs for disaster response,
particularly in supply chain management.
More specific on emergency preparedness, one common strategy is stock prepositioning.
In other words, positioning locally procured relief items in areas vulnerable
to natural disasters before the emergency. For example, Balcik and Beamon
(2008) developed a model incorporating both inventory and facility location decisions
for disaster relief. They considered where an HO should locate distribution
centers to respond to a disaster under a set of scenarios, and the probability of each
scenario occurring. Similarly, Mete and Zabinsky (2010) discussed the optimal
location of emergency medical supplies under stochastic demand.
The literature has also highlighted several constraints for emergency preparedness.
The first critical constraint is funding. While it is much more cost effective to
preposition supplies and other resources, there are relatively limited financial
resources available in advance for a disaster as most resources only flow in after a
disaster has taken place (Kovács and Spens 2009). Donor governments and organizations
are unwilling to pay the cost of what is, in effect, an insurance policy
against the scenario of an uncertain future event that typifies a natural disaster
(Tatham and Pettit 2010). Furthermore, there is a time lag between the flow of
funding and emergency supplies even after the onset of a disaster. The funding limit
clearly reduces HOs’ flexibility in allocating their limited resources before the
emergency.
Another issue is the lack of coordination in the emergency preparedness phase
among the HOs, and worse is their competition during the relief operation (Balcik
et al. 2010). The pressure to obtain greater media attention and in turn more
subsequent funding for the organization has resulted fierce competition among the
HOs on the ground (Kovács and Spens 2009). Such competition may lead to
duplicity which may waste precious resources and result in operation inefficiency.
The influx of unnecessary supplies may congest the ports, creating additional
bottlenecks and causing unnecessary delays for other important resources.
Moreover, the strong post-disaster demand and local competition for supplies
will inflate local market price, hence increasing the relief expense of the HOs
(Balcik et al. 2010). In some cases, the prices for local commodities and services
such as trucking can increase by a factor of ten (Tomasini and Wassenhove 2009).
To control operation costs and secure access to critical supplies, more and more
HOs are entering into long-term contracts with suppliers (Beamon and Balcik
2008). Such contracts are like options, often called framework agreements in the
context of humanitarian logistics. The agreements would include the specification
of the goods as well as the price, but not the order amount. The stocks indicated in
the contract are typically managed by the supplier and the change of ownership is
postponed until the point of actual purchase (Kovács and Tatham 2009). Such a
strategy is important to HOs who do not have sufficient funding for stock
prepositioning.
Chenrong Ni, Robert de Souza, Qing Lu and Mark Goh
 |
| Emergency Preparedness of Humanitarian Organizations |
Abstract In recent decades, there is an increasing trend in the occurrence and
complexity of disasters, while donors are becoming more demanding on the performance
and accountability. Hence, there is great pressure on humanitarian
organizations to improve the effectiveness and efficiency of their relief operations.
For effective response to an emergency, humanitarian organizations must prepare
their existing resources well before its start. This chapter develops a system
dynamics model as a decision-aid tool for humanitarian organizations to prepare
beforehand. The model is able to evaluate the effectiveness of common preparedness
strategies such as prepositioning and visualize their impacts in a competitive
environment with two humanitarian organizations. Simulation results show that
strategy that reduces the lead time is always efficient but not so for prepositioning
strategy. In the case of only the small organization prepositioning stocks, the overall
performance would be worse. The study would help improve the operating efficiency
of humanitarian organizations as well as their sustainability.
Introduction
As most disasters are characterized by a surge in demand for supplies and other
resources such as manpower, relief efforts are geared at procuring and delivering
goods in a timely manner, and this, in turn, demands detailed preparation before the
emergency. However, the preparedness in relief operations is complicated by the
demand uncertainty and various operational constraints. For example, humanitarian
organizations (HOs) are often short of funding for their emergency preparations as
most of their emergency funding are reactive in nature (Walker and Pepper 2007).
In emergency preparedness, one common strategy used by the HOs is proactive
contingency planning (Chakravarty 2011). Based on the plan, HOs would invest in a
small range of selected inventory and storage facilities, and work in collaboration
with suppliers and service providers to prepare for an expected surge in demand.
However, most existing literature assumes that the HO is preparing in isolation. In
practice, the situation is much more complex. Whenever there is a disaster, there
will be a number of HOs activated for relief operations, ranging from the local ones
to the international ones. They compete, interfere, or even battle for the limited
resources (Holguín-Veras et al. 2012). Such dynamic interactions should be incorporated
when analyzing the effectiveness of supply chain strategies. However, there
are very few studies examining such a dynamic interaction among the HOs. This
chapter is thus initiated to examine the effectiveness of emergency preparedness
strategies such as supply prepositioning and lead time reduction strategies like rapid
needs assessment in a competitive environment under resource constraints. Such a
study may help to improve the efficiency as well as sustainability of HOs in their
relief operations.
To study the interaction of the multiple players in relief operations, we use a
system dynamics (SD) model as the analytical tool. Among the various tools and
techniques, SD is chosen due to its advantage in dealing with dynamic complexity.
An SD model will be developed to simulate humanitarian supply chains for two
HOs under a funding constraint. The model will help users visualize the dynamic
interactions among the different parties and provide insight into the trade-offs of
each decision, and hence, facilitate effective and sustainable responses.
The rest of the chapter is organized as follows: we first conduct a literature
review on the humanitarian logistics sector in the Asia-Pacific, as well as their
challenges in emergency preparedness. The SD methodology is then introduced in
Sect. 7.3, and a SD model on emergency preparedness strategies is developed. We
then present the SD simulation results in Sect. 7.4. The chapter concludes with a
discussion on the model implications and future research suggestions.
Literature Review
Jiang et al. (2012) have provided an overview of the humanitarian logistics structure
in Asia and pinpoints the main challenges involved to draw public attention. In
particular, HOs often face lack of government support and basic infrastructure.
There are also coordination and communication problems both between the HOs
and the other parties such as the local government and the private sector as well as
among the HOs themselves.
To obtain an in-depth understanding of the humanitarian logistics sector in the
Asia-Pacific, the recent work of de Souza and Stumpf (2012) is worth a visit. With
contributors from academia, UN humanitarian agencies, international HOs, and
commercial companies working in the Asia-Pacific, this provides a vivid account of
relief operations from the ground, and highlights the challenges and opportunities in
the field from various perspectives as well. One can find descriptions of large scale
disasters in the region such as Cyclone Nargis in 2008 and the Bangkok flood
in 2011.
For more understanding on the sector, Decker et al. (2013) compared humanitarian
and commercial supply chain practices. In the commercial world, supply
chain managers have strived to develop risk conscious management practices to
enhance the resilience of their supply chain to large scale disruptions. At the same
time, humanitarian organizations professionalized their approach of responding to
disasters within a short lead time. Consequently, they could operate effectively in
disruptive environments and potentially provide superior strategies. SD simulation
was applied to yield performance benchmarks in terms of the disruption impact and
the associated response costs.
While the literature mainly focuses on international HOs, small local HOs are
often the key players for the effectiveness of relief operations. Sulistiono and
Mulyadi (2012) have conducted a case study of a local HO in Indonesia, Yayasan
Sosial Bina Sejahtera. Their study shares the experience of an local HO in conducting
humanitarian operations for a recent disaster in Indonesia. This experience
presents the capacity, capabilities, and initiatives by a typical local HO that is not
specialized in disaster response. The experience also illustrates humanitarian
operation processes conducted by the local HOs. The study can be used as a basis
for further capacity building initiatives of the local HOs for disaster response,
particularly in supply chain management.
More specific on emergency preparedness, one common strategy is stock prepositioning.
In other words, positioning locally procured relief items in areas vulnerable
to natural disasters before the emergency. For example, Balcik and Beamon
(2008) developed a model incorporating both inventory and facility location decisions
for disaster relief. They considered where an HO should locate distribution
centers to respond to a disaster under a set of scenarios, and the probability of each
scenario occurring. Similarly, Mete and Zabinsky (2010) discussed the optimal
location of emergency medical supplies under stochastic demand.
The literature has also highlighted several constraints for emergency preparedness.
The first critical constraint is funding. While it is much more cost effective to
preposition supplies and other resources, there are relatively limited financial
resources available in advance for a disaster as most resources only flow in after a
disaster has taken place (Kovács and Spens 2009). Donor governments and organizations
are unwilling to pay the cost of what is, in effect, an insurance policy
against the scenario of an uncertain future event that typifies a natural disaster
(Tatham and Pettit 2010). Furthermore, there is a time lag between the flow of
funding and emergency supplies even after the onset of a disaster. The funding limit
clearly reduces HOs’ flexibility in allocating their limited resources before the
emergency.
Another issue is the lack of coordination in the emergency preparedness phase
among the HOs, and worse is their competition during the relief operation (Balcik
et al. 2010). The pressure to obtain greater media attention and in turn more
subsequent funding for the organization has resulted fierce competition among the
HOs on the ground (Kovács and Spens 2009). Such competition may lead to
duplicity which may waste precious resources and result in operation inefficiency.
The influx of unnecessary supplies may congest the ports, creating additional
bottlenecks and causing unnecessary delays for other important resources.
Moreover, the strong post-disaster demand and local competition for supplies
will inflate local market price, hence increasing the relief expense of the HOs
(Balcik et al. 2010). In some cases, the prices for local commodities and services
such as trucking can increase by a factor of ten (Tomasini and Wassenhove 2009).
To control operation costs and secure access to critical supplies, more and more
HOs are entering into long-term contracts with suppliers (Beamon and Balcik
2008). Such contracts are like options, often called framework agreements in the
context of humanitarian logistics. The agreements would include the specification
of the goods as well as the price, but not the order amount. The stocks indicated in
the contract are typically managed by the supplier and the change of ownership is
postponed until the point of actual purchase (Kovács and Tatham 2009). Such a
strategy is important to HOs who do not have sufficient funding for stock
prepositioning.
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