The following is a Supply Chain Matters guest blog contribution contributed by Matt Shatzkin, Ph.D.
Research supports that the frequency and magnitude of global disaster situations will increase, which will in turn require an enhanced response capability from those executing disaster supply chains. However, enhancing response capability is no easy task; it requires a continued sharing of knowledge among military, commercial, industry, multinational, government, and academic supply chain communities.
The purpose of this blog post is to contribute this sharing of knowledge, for the purpose of building capability. To do so, it will first “define the challenge” by offering a framework of emergency supply chains, along with justification of why an emergency supply chain framework is necessary to understand the challenge.
A proposed framework for emergency supply chains
Emergency supply chains support complex emergencies. The Joint Logistics Enterprise defines a “complex emergency” as the wide array of “international conflict, humanitarian, and domestic disaster relief scenarios, involving combinations of warfare, food insecurity, epidemics, and social conflict.” (Joint Staff J4/Logistics, 2012). These scenarios are characterized by some combination of displaced people; widespread damage; hindrance of intervention or prevention due to political, security, or infrastructure constraints; threat of loss of life; or need for large scale assistance (Reference).
Emergency supply chains are primarily composed of two domains: networks constructed to support military expeditions, and chains intended to support nongovernmental, disaster relief organizations. As these two domains share some characteristics and tend to intersect, I would propose that together, they comprise the emergency supply chain framework that supports the Joint Logistics Enterprise’s definition of complex emergency.
The figure below visually depicts the composition of emergency supply chains, as well as the relationship of the two domains to each other. Military expeditions can occur outside of disaster or humanitarian crisis, such as operations in Grenada or Panama. Similarly, nongovernmental support to disasters or humanitarian crises can occur without military intervention, as seen in recent flooding in Pakistan, and ongoing support within Haiti. There are instances in which the two intersect, such as the military’s involvement in Haiti following the 2010 earthquake.
Commercial supply chains often contribute to the success of these domains, and are therefore accounted for in the model. They are not depicted as possessing their own domain, as it is more often the case that either a military or nongovernmental organization, or both, is the decisive effort in supporting the emergency operation. While commercial supply chains certainly respond to disasters, often referred to as disruption within the supply chain, I would propose that the actions of disruption are different than the framework of emergency supply chains. This differentiation is one of the leading justifications for a separate emergency supply chain framework.
Why a separate framework is necessary
Built on the fly (different than disruption)
While related, the concept of disruption, as well described by Dr. Yossi Sheffi in The Power of Resilience, remains different from the nature of emergency supply chains. In addressing the various types of disruption to the supply chain, such as fires, floods, power outages, accidents, labor strikes, a conventional supply chain may adopt a proactive or reactive strategy to address the possibility of these events. As the disruption affects the supply chain’s existing configuration, this configuration serves as a foundation from which to adjust. The supply chain may respond by moving stocks or opening new facilities, but for the most part, the stakeholders, products, and facilities stay the same. Most importantly, the supply chain’s identity remains the same as prior to the disruption; it is not wholly redefined by the disruption.
In contrast, emergency supply chains are largely born when emergencies occur. Rather than the emergency happening to the supply chain, the supply chain forms and activates in response to the emergency. Much of the emergency supply chain is created “on the fly,” after the emergency has occurred, with little to no prior planning. This includes both upstream and downstream elements. The emergency requires them to come together quickly, and the coordination and information-sharing requirements of these temporary networks are vast.
In responding to an emergency, military units must deploy to the area of the emergency. This involves moving retail locations, establishing the automated requisitioning system in new locations, and enacting new distribution routes. This displacement creates a new demand, and this “newness” was caused by a requirement to respond to the emergency, not by the emergency happening to the existing supply chain.
Disaster relief supply chains are similarly born out of crises. While the pieces and parts of a disaster relief supply chain exist prior to an emergency, it is its response to an emergency that forms its connections and relationships. This is arguably the opposite of a disruption: While a disruption happens to an existing supply chain, a disaster relief supply exists to address a disaster.
Measured by effectiveness, not efficiency
Emergency supply chains also merit their own categorization because they are largely defined by measurements of effectiveness, versus efficiency. While emergency supply chains largely possess the conventional supply chain tiers of supply, manufacturing, distribution, and retail, supply chains supporting emergency types of responses contribute to an operational effect, which involves more than meeting a general demand. In this manner, emergency supply chains contribute to the effectiveness of the operation.
In contrast, the standard objective function, or overall goal of a conventional supply chain, is to maximize service level objectives while minimizing the cost necessary to achieve these objectives.” (Simchi-Levi, 2008). In other words, the objective is to ensure right type of stocks, in the demanded quantities, are in the right location, at the right time, for the right customers, in the least expensive manner. This definition of success is characterized by effectiveness and efficiency, achieving results at the lowest possible cost.
Emergency supply chains operate in a “at all cost” manner. This behavior largely stems from the urgency of the crisis. By this notion, success in an emergency supply chain is about getting results, and little else. Additionally, attempts at optimizing emergency supply chains using cost savings approaches may be largely inappropriate, and potentially as a threat to achieving effectiveness.
Due to the emphasis on results over cost savings, emergency supply chains exhibit actions that are less often found in conventional supply chains. For example, supplies are most often flown in emergency situations, as opposed to being shipped via sealift at a cheaper rate, and less-than-truckload shipments occur much more often.
With these established definitions, future posts will describe sources of complexity within emergency supply chains, and challenges these supply chains face.
About the Author:
Matt Shatzkin has been an Army logistics practitioner for 27 years, achieving the rank of Colonel and earning his Ph.D. in transportation and logistics from North Dakota State University. He is the author of the book, “Understanding the Complexity of Emergency Supply Chains.” He has executed supply chains in support of three military crisis responses, led research teams, and taught several classes on supply chain management for the Army War College and North Dakota State University.
Joint Staff (J4) Logistics, Joint Staff (J7) Joint Force Development. (2012). Operations of the Logistic Enterprise in Complex Emergencies. Washington, D.C.
Sheffi, Y. (2017). The Power of Resilience: How the Best Companies Manage the Unexpected. MIT Press.
Simchi-Levi, D., P. Kanmisky, and E. Simchi-Levi. (2008). Designing and Managing the Supply Chain. New York, NY: McGraw-Hill.
Added Note: Supply Chain Matters thanks Colonel Shatzkin for his service to his country and his contribution toward teaching logistics professionals.