When Disaster Strikes, United Supply Chain Efforts Can Enhance Relief Work
STANFORD GRADUATE SCHOOL OF BUSINESS—With the aftermath of Hurricane Katrina fresh on everyone's mind, members of humanitarian relief organizations, along with corporate and academic supply chain management experts, recently gathered at the Stanford Graduate School of Business to exchange ideas and best practices aimed at improving the effectiveness of major international disaster efforts.
The one-day "Effective Disruption Management—seminar held on Sept. 8 was co-sponsored by the Stanford Global Supply Chain Management Forum and the Center for Social Innovation at Stanford Graduate School of Business, Fritz Institute, and the MIT Center for Transportation and Logistics." We are proud to provide a platform for business leaders and humanitarian agencies to work together toward the common goal of saving lives, protecting employees, ensuring the availability of natural resources, and securing the continuity of supplies anywhere on the planet,—said Stanford Business School Professor Hau Lee, who directs the Stanford Global Supply Chain Management Forum.
The seminar's sessions highlighted the importance of agility, proactive planning, visibility, partnerships, and performance management. Speakers included representatives from Cisco, MIT, Tuck School of Business at Dartmouth College, General Motors, International Rescue Committee, Intel, CARE Canada, Mercy Corps, Philips Semiconductor, and TNT NV (Amsterdam). "Developing the management skills necessary to deliver rapid assistance under the most difficult circumstances imaginable is of major importance to the world community,—said Yossi Sheffi, director of the Center for Transportation and Logistics at MIT and author of the forthcoming book The Resilient Enterprise (MIT Press).
The time to help is before anything happens, stressed Lynn Fritz, director general of Fritz Institute, an organization dedicated to leveraging private and academic sector expertise to develop operational solutions for humanitarian aid groups. We know where disasters are prone to strike—cyclones in Bangladesh, hurricanes in Florida and the Caribbean, earthquakes in Northern California, for example. With even a rudimentary level of planning in advance, local regions can do a great deal to lessen the effects of any disruptive event. The key to good disaster management, said Fritz, is empowering local agencies and organizations through appropriate funding and, ideally, through coordination of expertise from the business, academic, medical, governmental, and humanitarian communities.
Offering lessons from his work as director of global emergency operations with the international relief agency Mercy Corps, Randy Martin reiterated to attendees the importance of creating local field networks capable of springing into action within 72 hours in key areas of the world vulnerable not only to disasters but to the exacerbating effects of political unrest, poverty, and disease. "By pulling together a team where and when it was needed, we were able to mobilize $4 million worth of aid within three months of the December 2004 tsunami in Asia,—Martin said of his organization. "We were punching well above our weight."
Yet Gail Neudorf, emergency coordinator of CARE Canada, also spoke of maddening challenges that relief agencies face when confronted with a crisis. Having non-taxable status as an NGO, for example, means being jettisoned to the bottom of the priority list when working with most governments, lamented Neudorf. "This makes it a hassle when we're trying to get emergency goods out,—she said. "We also work in countries where the freight forwarding system is expensive."
Sometimes, Martin noted, organizations must weigh and measure the possible harm to local cultures and communities resulting from donated supplies. "After the tsunami,—he said, "Mercy Corps had an offer for 33,000 pairs of stylish Western sandals for people in Sri Lanka. Our program people reminded us that sandal making was an important cottage industry in Sri Lanka, and that if we dropped fancy sandals there we might ruin the local economy. We decided not to accept them and were proud of that decision—but somebody else did."
Several presenters spoke about logistical planning in the business sector, which has long been involved in perfecting supply chain management and which, in recent years, has taken a serious approach to risk management. Adele Martz, a director of corporate risk management at General Motors, discussed efforts she has led to help her company mitigate risks, from natural disasters to economic ones. GM has established, for example, weather monitoring systems, preemptive evacuation procedures for people and hard-to-replace equipment, backup supplier networks, and regular emergency drills—as well as plans to invest in future technologies less vulnerable to the vagaries of the oil market.
The program has been put to the test numerous times at GM locations around the world. "In 2004, for example, a hurricane in Oklahoma demolished our assembly plant,—she said. "There were 1,200 people and not one person was hurt because we had practiced evacuation plans a month prior.—Moreover, the plant was up and running in record time because the company provisioned for relief employees not affected by the disaster to take over the rebuilding process.
Leslie Lam of Cisco Systems similarly outlined her organization's efforts to embed risk management into company culture. Lam emphasized that Cisco has partnered closely with contractors to ensure controls and backups are in place to mitigate any disruption to supply lines.
Several corporate leaders who have been involved directly in transferring knowledge, skills, and resources to humanitarian aid agencies also shared their experiences. Among them was Ludo Oelrich, director of TNT's "Moving the World— program, an effort dedicated to helping the United Nations World Food Programme enhance its emergency operations. Jon Olson, manager of global transportation and logistical outsourcing with Intel, and John Rickard, director of logistics at International Rescue Committee, discussed the collaboration between their organizations to help strengthen IRC's supply chain.