Performance Measurement in Humanitarian Logistics

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1 Proceedings Klumpp, Mathias Abidi, Hella (Hrsg.) 2. International HumLogWorkshop Essen 24. September 2012 Performance Measurement in Humanitarian Logistics

2 2013 by MA Akademie Verlagsund Druck-Gesellschaft mbh Leimkugelstraße 6, Essen Tel Fax Das Werk einschließlich seiner Teile ist urheberrechtlich geschützt. Jede Verwertung außerhalb der engen Grenzen des Urhebergesetzes ist ohne Zustimmung der MA Akademie Verlags- und Druck- Gesellschaft mbh unzulässig und strafbar. Das gilt insbesondere für Vervielfältigungen, Übersetzungen, Mikroverfilmungen und die Einspeicherung und Verarbeitung in elektronischen Systemen. Die Wiedergabe von Gebrauchsnamen, Handelsnamen, Warenbezeichnungen usw. in diesem Werk berechtigt auch ohne besondere Kennzeichnung nicht zu der Annahme, dass solche Namen im Sinne der Warenzeichen- und Markenschutz-Gesetzgebung als frei zu betrachten wären und daher von jedermann benutzt werden dürfen. Oft handelt es sich um gesetzlich geschützte eingetragene Warenzeichen, auch wenn sie nicht als solche gekennzeichnet sind.

3 2nd International HumLogWorkshop Performance Measurement in Humanitarian Logistics Forschungsförderung (WiWeLo Projekt) durch: Förderkennzeichen: 01 C10L19D

4 2nd International HumLogWorkshop Performance Measurement in Humanitarian Logistics President s Introduction For the second time our distinguished research institute ild organized an international workshop on humanitarian logistics, this time with the specific topic of performance measurement in humanitarian logistics. This is a very promising research field and our university is glad to support this annual international meeting by experts from science, business and humanitarian practice. Presenters of the 2nd International Workshop on Humanitarian Logistics (l.t.r): Prof. Maria Besiou, Isabelle de Muyser-Boucher, Prof. Anthony Beresford, Melissa Robles, Richard van Dijk, Prof. Dorit Bölsche, Katrin Mohr, Dr. Stephen Pettit, Ira Harrvisto, Prof. Matthias Klumpp The workshop was initiated 2011 by Ms. Hella Abidi and Prof. Dr. Matthias Klumpp and is now growing into an established meeting point for international humanitarian logistics research. We are very proud of this development and will provide further support for this outstanding example of beneficial applied science for our societies in the world. Prof. Dr. Burghard Hermeier President FOM Prof. Dr. Thomas Heupel Vice-President Research FOM 2

5 2nd International HumLogWorkshop Performance Measurement in Humanitarian Logistics Editors Preface The Institute for Logistics and Service Management (FOM ild) at FOM University of Applied Sciences in Essen has organized the 2 nd International HumLogWorkshop Performance Measurement in Humanitarian Logistics on the 24 th of September 2012 in Essen, Germany. We have met different expert logistics providers (DHL, Meyer), national and international government organizations such as UN and UNICEF, private humanitarian organization (North Star Alliance) as well as international research institutes and universities like INSEAD/KLU, VU Amsterdam, Cardiff Business School, University Duisburg- Essen, University Münster, University of Applied Sciences HS Fulda and Hanken HumLog Institute Finland. All of them are important and experienced in the sector of humanitarian logistics. In our workshop they have joined us with discussions and also their experience regarding current and important subjects in humanitarian logistics in order to improve and promote the performance of long-term and short-term processes, performance measurement systems, performance measurement indicators and gaps in the area of humanitarian logistics. Finally we all hope for these contributions as well as this workshop documentation to enhance operational performance in all humanitarian and relief operations and therefore alleviate the suffering of people in need. We are also looking forward to the next 3 rd International Workshop to take place on the 23 rd of September 2013 in Essen. Prof. Dr. Matthias Klumpp Research Director ild Hella Abidi Research Assistant ild 3

6 List of content List of content 1 Introduction Thomas Heupel 4 2 Humanitarian Logistics Performance through Education Matthias Klumpp, Hella Abidi 6 3 Performance measurement and reportingin the corporate responsibility report perspectives of auditors vs. practitioners Kathrin Mohr 17 4 Tracking of In-Kind Contributions LogIK Isabelle de Muyser-Boucher 29 5 The Effect of Earmarked Funding on Fleet Management for Relief and Development Maria Besiou 36 6 Performance Measurement in Cross-Border Settings Richard van Dijk 45 7 Planning and optimizing relief systems in humanitarian logistics Abbas Al-Rafaie, Bernd Noche, Melissa Robles 60 8 Critical Success Factors in the Supply of Humanitarian Aid Stephen Petit, Anthony Beresford 72 9 Agility in Humanitarian Supply Chains David Knight, Stephen Petit, Anthony Beresford Performance measurement in humanitarian logistics Dorit Bölsche Die Veranstalter 118 Appendix: Program 2nd International HumLogWorkshop 120 4

7 Introduction 1 Introduction Thomas Heupel Ladies and Gentlemen, a warm welcome to our second international conference on humanitarian logistics. After about a year ago on October, 10th 2011 we have debated for the first time in this context on developments and trends in the humanitarian logistics at FOM university, as dean of research I am pleased about this event for the second year. That issue is more relevant than ever, the numbers show that since 1970, there are six times more disasters on Earth. More and more people suffer from earthquakes, floods, political unrest or war and must be supplied with foodstuffs urgently, medicine, water and clothing. This is a logistical challenge in extreme conditions. Finally, in many disaster areas, the infrastructure has been destroyed or threatened by other unforeseeable events. I am particularly well this year on the international nature of this event and would like salute you as experts from agencies, universities and logistics companies around the world here in Essen at the FOM. On this international workshop we would discuss as scientists and experts about ways to make humanitarian aid and supplies to disaster areas more efficiently. The schedule for this day is filled top-class and we look forward to great contributions such as this morning on the subject: Success factors in humanitarian aid supply chains ; Agility in humanitarian aid supply chains ; How to measure quality in humanitarian operations? ; Planning and optimizing relief systems in humanitarian logistics. After lunch, it goes further with: Cooperation in procurement among organizations of the UN system at the field level ; Performance measurement in cross-border settings: The case of health services delivery in low-income settings ; Performance measurement and reporting in the corporate responsibility report - perspectives of auditors vs. practitioners ; Performance measurement in humanitarian logistics and last but not least The Effect of earmarked funding on fleet management for relief and development. And for the evening, we invite you cordially as the finale to a workshop dinner. 5

8 Humanitarian Logistics Performance through Education 2 Humanitarian Logistics Performance through Education Matthias Klumpp, Hella Abidi The purpose of this research is firstly to provide the humanitarian logistics community with an overall picture about competencies and skills in humanitarian logistics and secondly to maximize the logistics performance. The humanitarian logistics sector deals with a complex and dynamic environment like planning of transport under difficult and challenging conditions such as destroyed or impassable roads and airports as well as congested seaports or supply vulnerable beneficiaries with shelter, water, medicine and food in a short time, the humanitarian logistics staff and different humanitarian organization have a lead time of zero. Due to all these challenges there is a lack of professionalization of the logistics function in humanitarian context from an international perspective. This research elaborates practical approaches how the skills and competencies can be enhanced and developed for international education programs. An empirical survey as approach was used. Hereby a descriptive analysis provides in a comprehensive way education, skills and competencies in humanitarian logistics. The respondents are from different countries and continents as well as from different humanitarian sector e.g. humanitarian organizations; logistics service providers, military services and researchers. In general, the findings of the research paper present valuable insights of mandatory contents of education in humanitarian logistics as well as competencies and skills on different levels based on EQF (European Qualification Framework). On slide 9 the results shows the best five evaluated competencies as well as skills which are needed in the logistics in particular humanitarian logistics. Slide 10 presents the five negative evaluated competencies as well as skills such as having knowledge in legal basic (Average 2.97) creating calculations and offers (average 2.59), leading negotiations (average 2.56), planning, performing and document orders and projects (average 2.50) and finally quality management (average 2.48). These negative evaluated competencies as well as skills has to be enhanced and promoted because the humanitarian logistics staff deal with daily operative work in humanitarian logistics projects or negotiations with supply concerning goods for the beneficiaries in case of a disaster. Further quality management in humanitarian logistics is a needed competence in logistics and in particular humanitarian logistics e.g. quality management in procurement, transport, delivery, distribution and inventory management. 6

9 Humanitarian Logistics Performance through Education This research explores these and offers suggestions to improve and promote market and professional competencies and skills for the humanitarian logistics sector and to minimize their impacts by improving efficiency, working more cost-effective, finding solution in efficient way by a complex environment and humanitarian logistics management in a high quality as well as efficient. Based on the finding a first draft of Industry Qualification Framework (IQF) for the humanitarian logistics can be created as portrayed in slide 12. The IQF is subdivided in eight levels and in three subcategories namely knowledge, skills and competencies. The IQF facilitate the standardization and adaption especially for SME companies in logistics usually there are only few capacities and personnel in personnel education, therefore standards such as the IQF are useful. 7

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19 Performance measurement and reporting in the corporate responsibility report perspectives 3 Performance measurement and reporting in the corporate responsibility report perspectives of auditors vs. practitioners Kathrin Mohr Expediting relief efforts through logistics Deutsche Post DHL, the world's leading mail and logistics company with around 470,000 employees worldwide, recognizes that its market leadership comes with a special responsibility to use its core expertise in logistics and its worldwide presence to benefit the world. In the face of this responsibility, Deutsche Post DHL has entered into a strategic disaster management partnership with the United Nations in By becoming an integrated part of this internationally established humanitarian relief system, we are able to make an effective contribution to aiding disaster victims. As part of our GoHelp program, we provide the United Nations with access to our core competency in logistics, our global network and the logistics know-how of our employees at no charge. Our activities cover all phases of disaster management: Disaster Preparedness Preventative measures at airports with Get Airports Ready for Disaster (GARD): We prepare airport personnel and staff from disaster management agencies for the logistics challenges posed by natural disasters and their aftermath. Disaster Response Our Disaster Response Teams (DRTs) offer support after a natural disaster: Our employees provide on-site logistics support on a volunteer basis at airports to ensure the successful processing and dispatch of relief supplies. DRTs can be on the ground and operational within 72 hours after being called upon by the United Nations. Recovery - Employees help employees with the relief fund We Help Each Other (WHEO): Employees can use the WHEO fund to donate money to fellow employees who are victims of natural disasters Disaster Response Teams: Quick to mobilize when disaster strikes In cooperation with the United Nations Office for the Coordination of Humanitarian Affairs (OCHA), we have established a global network of Disaster Response Teams (DRTs) consisting of over 400 specially trained DHL employees who volunteer their time to the GoHelp program. The DRT network covers nearly all parts of the world considered vulnerable to natural disasters with three strategically located teams: the Americas (Panama), Middle East/Africa (Dubai) and Asia Pacific (Singapore). When the United Nations calls on us for support, we deploy our logistics experts to the disaster site airport within 72 hours. Once on the ground, our DRTs provide critical support in the movement of relief supplies, including unloading cargo planes and conducting professional warehousing and inventory at no charge. Our teams make sure that relief supplies can be forwarded expediently to the people in need. 17

20 Performance measurement and reporting in the corporate responsibility report perspectives Reporting standards vs. practical implications In a deployment situation, the inventory management is done manually by the members of the DRT. Since relief goods do not have unified barcodes, there is currently no system available to automatically scan relief good items. On the ground, the manual system works quite well, however, when trying to put the data together after the deployment, we found there may be gaps in the reporting. Also, when handling more complex items, such as medical equipment or drugs, the manual system is too slow. This is why we are currently developing an automatic barcode and scanning system for relief goods: The goods are assessed by a DRT member, the basic data, such as weight and size of the SKU, is put into the system and a customized barcode is generated. This way the relief goods will be tracked easily and consistently during the handling in our warehouse. 18

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31 Tracking of In-Kind Contributions - LogIK 4 Tracking of In-Kind Contributions - LogIK Isabelle de Muyser-Boucher UN OCHA is the part of the United Nations Secretariat responsible for bringing together humanitarian actors to ensure a coherent response to emergencies. The mission of UN OCHA is to mobilize and coordinate effective and principled humanitarian action in partnership with national and international actors in order to alleviate human suffering in disasters and emergencies, to advocate the rights of people in need, to promote preparedness and prevention and to facilitate sustainable solutions. UN OCHA follows five core functions: 1. Humanitarian coordination 2. Humanitarian advocacy 3. Policy development 4. Management of humanitarian information 5. Humanitarian Financing The problem in the humanitarian relief sector is the unsolicited and inappropriate donations therefore UN OCHA has implemented a specific performance measurement tool to optimize emergency response capacity namely LogIK that provides an adequate and efficient data about relief flights and in-kind contributions, to complete tracking of LOG Cluster and Financial Tracking Service (FTS). The tool offer systematic and predictable information and it is connected to other important databases such as RITA, Global Mapping of Emergency Stockpiles, SUMA/LSS, Virtual Osocc, FTS. The tool offer to the humanitarian actors a variety of value added service: Supports assessment of relief situation Enables focus on in-kind contributions in short supply Advocacy for use of cluster mechanisms May support standardization of items to be donated in disasters May long-term help reduce unsolicited donations The LogIK tool provides summarized and customized reports about InKind donations in kind of shelter, nutrition, water, health and other humanitarian relief items for each affected and offers following information: The total sum in USD and tons of InKind donations Shipper The number and quality of InKind contributios Number of the arrival and in which transport mode are used for the InKind donations 29

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38 The Effect of Earmarket Funding on Fleet Management for Relief and Development 5 The Effect of Earmarked Funding on Fleet Management for Relief and Development Maria Besiou In general optimization models in humanitarian logistics in the past have been using standard models without the required match with the specific situation of humanitarian relief operations. For example the special accountability of humanitarian organizations towards governments, donors and other third party co-operation partners was mainly neglected and standard supply chain or stakeholder models were applied. This research shows that with the simulation of this specific situation for the operational question of fleet management and sourcing many insights can be gained and applied to relief operations. Whereas standard assumptions from literature outline an advantage for centrally planned and isolated executed operations, humanitarian practice shows options for decentralization as well as simultaneous operations with earmarked funding (relief and development). And whereas literature assumes centralized decision systems to combine low cost with low service levels and vice versa for decentralized systems, the daily practice in humanitarian logistics talks about worse service levels in decentralized systems. Therefore the described model is based on system dynamics methodology in order to shed light on this specific question. The research model assumes development and relief operations in three different but neighboring countries and a time horizon of 150 years in order to reach stable final situations. Besides the centralized and decentralized model also a hybrid model of fleet sourcing decision making is applied. The following results can be obtained from the model: The combination of development and relief operations brings sever challenges to humanitarian organizations but can make sense and should be analyzed further in the future. In most simulation cases more decentralization brings lower service levels due to important restrictions in humanitarian operations. The donors funding may also (earmarked) contribute to further problems in service levels and efficient response to development and relief tasks as e.g. the number of donors in one target area decreases service levels in fleet management decisions according to the model simulation. Similar models should be extended to other operational tasks and areas as well as restrictions as these simulations may yield important knowledge in the form of rules of thumb for the practical decisions in the field. 36

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47 Performance Measurement in Cross-Border Settings 6 Performance Measurement in Cross-Border Settings Richard van Dijk Background for the important humanitarian work of North Star Alliance is the recognition that viruses and diseases in Africa mainly spread via transport corridors. Especially truck drivers are prone to catching such diseases due to their transport routes and their working conditions with long working hours and less physical activity (e.g. coronary heart diseases, type 2 diabetes, cancer, HIV, STI, malaria and tuberculosis). Therefore an effective restriction to these diseases and challenges to economic growth in African regions should be addressing the transport corridors themselves and therefore North Star Alliance is putting up roadside wellness centers in order to support truck drivers, sex workers and community members alike. Today after several evolvement steps the initiative is operating 25 such centers in 10 African countries and provides support and counseling for up to 200,000 persons annually (2011). The networking objective is to establish altogether 100 centers until 2015 this would enable the initiative to reach out to about 85 % or all Sub-Saharan truck drivers. Though the settings provide a lot of setbacks and restraints (resources, mobile target population, cross-border setting with different regulations) the initiative is starting to be recognized as important and positive by the people. Even more challenges sometimes arise from the multi-stakeholder setting as public health authorities enter turf fights with individual health and occupational health institutions about North Star Alliance activities. Therefore the initiative has set out three layers of activity for different people to reach in order to avoid adverse effects by rejection from only the disease-struck groups: In the first level, all moving persons along transport corridors are provided with non-medical services and research/counseling. Second obvious clients with specific needs and requests receive primary and occupational health services. And third patients with open diseases receive treatment and pharmaceuticals addressing these open diseases. According to this specific mission the initiative has established a COMETS data system providing data along disease patters and treatments as well as patient tracking across borders and country specific protocols and medication. This is the core and backbone of the distributed services among different countries as without an accurate patient history of the travelling patient no professional service can be administered. Furthermore the database is also used for improvement options and also network extensions, e.g. as input data for a POLARIS transport corridor simulation identifying the next promising locations for wellness centers in Africa along transport routes. 45

48 Performance Measurement in Cross-Border Settings Altogether these specifics of North Star Alliance show tremendous potential for benchmarking and improvement comparing this strategic and information-backed concept with other development and relief institutions. Many extensions and also co-operations e.g. in transportation and stock-keeping seem interesting for other institutions together with this initiative. 46

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62 Planning and optimizing relief systems in humanitarian logistics 7 Planning and optimizing relief systems in humanitarian logistics Abbas Al-Refaie, Bernd Noche, Melissa Robles The specific situation in disaster areas by flooding, earthquake or other natural disasters usually hinders relief operations very much this being one of the main problems and also differences compared to traditional models in commercial logistics, which can only in exceptional cases be used for humanitarian logistics. Therefore this research contribution shows the elements and features of an integrated planning and optimization system specially designed for humanitarian logistics in an international cooperation of the University of Duisburg-Essen (Prof. Dr.-Ing. Noche) and the University of Jordan (Prof. Dr.-Ing. Al-Refaie). In comparison to commercial logistics, on the humanitarian scene the demand has its origins at unknown locations, at unknown times and its sizes is difficult to forecast. Another challenge is that in humanitarian logistics a fair distribution of relief items is an important decision criteria as the human condition of the affected ones should be respected. Despite of the urgent situation, the relief deployment should be optimized to guarantee lower logistic costs as this allows the allocation of the resources for the purchasing of the relief items itself. Short delivery times are important criteria as well to save lives. The presented transportation model is designed to fit exactly to these requirements of emergency and relief situations. It was tested with data from the 2010 Haiti earthquake and delivers a better (fairer) distribution of donations to different disaster areas. The mathematical model has three optimization criteria (cost minimization, delivery time minimization and credibility maximization), three network elements (donor countries, collection points and devastated locations) as well as two pattern schemes deployed (4 donation periods; 4 recovery periods). Especially the modeling of decreasing the credibility as the delivery time increases with a degressive function can be seen as a new research contribution in this context. This implies an interesting steering mechanism for model solver processes as there is an intrinsic motivation to deliver relief goods as soon as possible. The model was tested with the donor countries Austria, Mexico, Spain, Lebanon, Germany and Canada for the specific locations of Port-au-Prince, Gressier and Jacmel devastated in the Haiti earthquake Data has been taken from the UNOCHA, IFRC and WFP offices regarding the donations and also deliveries to Haiti. Results for earliest and also cost-optimal delivery times show that dependency on credibility levels is quite high. This could be a precursor for further modeling as well as the option of relief managers to determine the weight of this credibility and therefore delivery time effect for each individual disaster. 60

63 Planning and optimizing relief systems in humanitarian logistics Altogether the model shows a very promising as efficient allocation regarding the humanitarian logistics-specific question of delivery time (equal human lives, equal credibility of relief organizations) versus delivery cost in disaster cases. Therefore this approach should further be enhanced and tested in live-disaster situations. And furthermore it should be integrated in as many government and non-government, military and non-military contexts and simulation endeavors in order to enhance the level of abstraction and also training for site managers in operational logistics situation in the field worldwide. 61

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74 Critical Success Factors in the Supply of Humanitarian Aid 8 Critical Success Factors in the Supply of Humanitarian Aid Stephen Petit, Anthony Beresford Dear ladies and gentlemen, welcome to my presentation with the topic critical success factors in the supply of humanitarian aid. Four points are on the agenda. We will start with a short introduction, then the backgrounds and the CSFs in humanitarian logistics and we will end with a conclusion. Aims of humanitarian logistics are to identify critical factors to the success of humanitarian aid supply chains, variables within those factors which contribute to their effectiveness and access how such factors can assist agencies in improving strategy and response. Humanitarian logistics is often the largest and most complex element of relief operations. In practice and science we need requirements for a clear understanding of problems and issues. In context to crises situations it is uncertainty difficult. To solving problems the understanding factors are crucial. The Hurricane Katrina or the Indian Ocean tsunami illustrates that the perception of actual delivery systems failure in Humanitarian logistics. The theoretical understanding of humanitarian supply chains is little development and the diverse natures of humanitarian community have not fully understood this. Further backgrounds are that the crisis response is short term, establishment of supply chains takes place under high stress conditions and we have to answer the question to consideration of alternative approaches. But the research is poorly funded or not funded at all. Many logistics processes are similar to commercial logistics but it is often not possible to transfer the business to humanitarian logistics processes. The major differences are: Funding Employment Location Instability Lack of logistics knowledge Other problems are the lack of technical knowledge in humanitarian organizations and the insufficient experienced logisticians. A literature review illustrates the keys like (a) strategic planning, (b) Inventory Management, (c) Transport Planning, (d) Capacity Planning, (e) Information Management, (f) Human Resource Management, (g) Continuous Improvement, (h) Collaboration and (i) Technology Utilization. 72

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