Module 2: Strategic and Tactical Planning

10th April 2013|

Marianne Jahre

Content

Recap module 1 and introduction module 2 Contribute – research project on disaster relief logistics Important concepts from theory Applying the concepts in Disaster Supply Chain Design

and Management Background case task Part 1 Strategic and Tactical Planning in practice Case Task 1: Q & A

2

Before, during and after a disaster…….

3

Preparedness

Response Recovery

Most operations are handled by the countries themselves through their own governments and national organisations Logistics account for up to 60-80% of total cost ( (IFRC, 2011; van

Wassenhove 2006)

The changing context and implications for logistics/SCM

(Logistical) needs will change in line with change in location/type of disasters Preparedness is needed to improve use of funding

and cope with increased size, complexity, and scope of logistics Changing roles of (Logistics) actors with according

changes in required competence/capacity and how they work together

4

Module 2 in the course

Assessment Consolidate,

publish Needs

Module 4: Source

Module 5: Transport

Module 6: Stock

Module 7: Distribution

5

Item

s •NFI •Shelter •Food •Health •Watsan •Cash Fa

cilit

ies

& ot

her

infra

stru

ctur

e •Warehouse space •Office space •Communication/IT •Transport infrastructure

•Transport means •Equipment H

uman

reso

urce

s •Rosters of logisticians and other technical experts

•Training courses

Syst

ems

and

rela

tions

hips

•Tools •SOP, standards & plans

•Manuals •Contracts & framework agreements

•Suppliers, donors

Module 2: Strategic & Tactical Planning

Module 3 & 8: Accountability, Performance Measurement & Coordination

Module 9: Human Resource Management

Improve the effectiveness and efficiency of disaster operations by identifying ways of developing and maintaining well functioning relationships and collaboration between commercial sector providers and humanitarian organisations. The use of logistics service

providers in international humanitarian response

6 © Pictures provided by www.insidedisaster.com

Applied research project 2010-2013

Why – disaster relief logistics challenges

Planning & running good operations difficult Lack of logistics specialists & expertise Lack of systematic overview of needs & resources Lack of cooperation & scepticism between the actors Humanitarian Military Commercial Donors Host governments Commercial actors and military not seen as a sustainable

part of the humanitarian supply network Donors in general do not ‘see’ the logistics

7

© Pictures provided by www.insidedisaster.com

Challenging myths…

8

CHARACTERISTICS OF HUMANITARIAN LOGISTICS/SCM (?) SOURCES

Uncertainty in/unpredictable demand

van Wassenhove (2006); Beamon and Kotleba (2006); Oloruntuba and Gray (2006); Kovács and Spens (2007; 2010); Balcik and Beamon (2008); Lodree and Taskin (2008); Jahre and Heigh (2008); Day et al. (2009); Tomasini and van Wassenhove (2009); Stapleton et al. (2010); Salmerón and Apte (2010); Mete and Zabinsky (2010); Sheu (2010); Gatignon et al. (2010); Balcik et al. (2010); Rawls and Turnquist ( 2010); Majewski et al. (2010)

Time more important than cost in the first phase

van Wassenhove (2006); Oloruntoba and Gray (2006); Day et al. (2009); Tomasini and van Wassenhove (2009); Salmerón and Apte (2010); Banomyong and Sopadang (2010)

Lack of resources Pettit and Beresford (2005); Balcik and Beamon (2008); Jahre and Heigh (2008); Kovács and Spens (2010); Balcik et al. (2010)

Destabilized infrastructure Long and Wood (1995); Pettit and Beresford (2005); van Wassenhove (2006); Oloruntuba and Gray (2006); Kovács and Spens (2007; 2010); Kovács and Tatham (2010); Balcik et al. (2010); Rawls and Turnquist ( 2010)

Non-profit: goal is to save lives Oloruntuba and Gray (2006); Tomasini and van Wassenhove (2009); Kovács and Spens (2010); Kovács and Tatham (2010)

Many stakeholders Thomas and Kopzack (2005); van Wassenhove (2006); Oloruntuba and Gray (2006); Stapleton et al. (2010); Kovács and Tatham (2010); Balcik et al. (2010)

Uncertainty in supply van Wassenhove (2006); Oloruntuba and Gray (2006); Kovács and Spens (2007); Stapleton et al. (2010); Balcik et al. (2010); Majewski et al. (2010)

Information flow impediments and weak use of technology

Pettit and Beresford (2005); Thomas and Kopzack (2005); Oloruntuba and Gray (2006); Day et al. (2009); Banomyong and Sopadang (2010); Majewski et al. (2010)

Complexity; lack of control Pettit and Beresford (2005); van Wassenhove (2006); Kovács and Spens (2007; 2010); Balcik et al. (2010)

Volatile political climate Long and Wood (1995); van Wassenhove (2006); Balcik et al. (2010)

Donor accountability and transparency

Thomas and Kopzack (2005); van Wassenhove (2006); Jahre and Heigh (2008); Stapleton et al. (2010); Balcik et al. (2010); Majewski et al. (2010)

Lack of institutional learning Thomas and Kopzack (2005); van Wassenhove (2006); Day et al. (2009); Kovács and Tatham (2010); Oloruntoba (2010)

(Source: Everywhere et al. 2011)

How - deliverables

Tools for improving practice and learning; teaching cases & exercises new business models & concepts Publications academic & practitioner journals Workshops & seminars PhD. , master- & bachelor theses

9

Logistics research

competence BI*, MIT**

Disaster response

competence Everywhere*,

GEG**

Commercial logistics

competence/ physical assets

WW*

Donors Responding

agencies IFRC**

Host government & beneficiaries

Military

* Research Consortium and co-funders ** Reference Group

(Beyond) engaged scholarship http://www.youtube.com/watch?v=jjhjUEciNVU

11

Contribute sub-projects

Case Study IFRC:

Strategy Develop-ment and

Use of HLDF

prototype

Case Study Every-where:

Strategy Develop-

ment

Case Study WWL:

Commer-cial

Strategy Analysis

Simulation Study: Use of vessels in disaster prepared-ness and response

Fleet manage-

ment: Out-

sourcing

Tactical Tool: Using

the Forecasting Tool to Plan Response

Case Study

Ethiopia: Procure-ment of

Transport Services

Development & delivery master course in disaster relief logistics

Mapping Project: Mapping the Main actors involved in disaster relief

Development of Humanitarian Logistics Demand Forecasting Tool Prototype

Martin Christopher

13

Q1: While agility is one, there are also other interesting

concepts – what are they and how can they relate to humanitarian logistics?

14

Supply Chain Efficiency not enough

Great Supply Chains are

Agile

Great Supply

Chains are Adaptable

Great Supply

Chains are Aligned

Source: Lee, 2004

The Triple-A Supply Chain - Agility

Objective Methods

Respond to short-term changes in demand or supply quickly; handle external disruptions smoothly

Information flow Collaborative supplier

relationships Postponement Buffers Logistics system or partner Contingency plans

Source: Lee, 2004

The Triple-A Supply Chain - Adaptability

Objective Methods

Adjust supply chain’s design to meet structural shifts in markets; modify supply network to strategies, products , and technologies

Monitor economies Use intermediaries Needs of ultimate consumers Flexible product designs Technology/product life cycles

Source: Lee, 2004

The Triple-A Supply Chain - Alignment

Objective Methods

Create incentives for better performance

Information/knowledge exchange Clear roles, tasks,

responsibilities Share risks, costs, and gains

Source: Lee, 2004

Preparedness

Response Recovery

Q2: Which of these can we view as the Permanent and which as the Temporary Supply Chains/Networks and why?

Supply Chain Management – Three components

Strategic Planning - Design

• Setting up a flow of goods and services with related flows of information and money to bridge demand and supply by designing a physical network of facilities and appropriate cooperation between key supply chain members

Tactical and Operational Planning

- Manage

• Using the network in a way that best balances efficiency against responsiveness by applying a variety of techniques for planning and performing the processes needed to match supply and demand across the supply chain.

Measurement

• Developing and implementing metrics that track the performance of the supply chain for the purpose of taking corrective actions.

Project Task - Case Part 1 With basis in the logistics strategy and structure of IFRC as described in Jahre 2008 (1st strategic change) you are to discuss alternatives for their 2nd strategic change using the information from Module 2 and the LOG2015-document. This should include an analysis of Factors that are dictating or will influence future development (Majewski et al.

2008 and lecture in Module 1) Options that are available to the IFRC (e.g. outsourcing of logistics,

centralisation of sourcing, warehousing, postponement, etc.) Risk and benefits of these alternatives compared to the choice they have

made and; What is your recommendation

You are requested to use the compulsory literature and lectures in the course to solve the case, but you can also use additional articles/reports.

22

Introduction to the IFRC

23

International Committee of the Red Cross “ICRC”

International Federation of Red Cross and Red Crescent Societies

“International Federation”

National Red Cross and Red Crescent Societies “National Societies”

• Secretariat provides support to and linkages between 187 member National Societies

• Provides international coordination services in response to large-scale disasters and health emergencies

• Provides international representation, resource mobilization and advocacy

• Supports capacity building of the National Societies

IFRC 1st strategic change – case study methodology

Multitude of sources systematic interviews documents and archival material technical artefacts (e.g. physical structures, product catalogues and ICT systems)

Pre-structured case outline, case study protocol, semi-structured interview guide, case study database 30 interviews+ Denmark, England, Scotland, Canada, India, Bangladesh, Sweden, Finland, Norway,

USA, New Zealand, Italy, Netherlands, Germany, Khasakstan, Albania, Jamaica, Australia…..

A new setting….. DREF, ERU, FACT, DMU, DMIS, FOS, HLS, LRMD, NGO, TBC, OCHA, PNS, ONS,

RLU, RDRT, ICRC, IFRC, GIK, MOBTAB, NS, PPG, VCI, Watsan…..

Source: Jahre, 2008

The shopping list.. IFRC does not focus on food –

World’s Food Programme (WFP) is the expert in handling such items In addition to ’basic relief items’ they

must handle all equipment they need for themselves as well as their specialities, for example: ERU – Emergency Relief Units Logistics, IT/Telecom, Relief, Field

Hospitals, Basic Health Care, and Water and Sanitation units

A fleet of more than 1000 vehicles used by IFRC-staff

Basic relief items

Family tents

Blankets

Tarpaulins

Mosquito nets

Hygiene parcels

Kitchen sets

Jerry cans

Buckets

Emergency health kits

Cholera kits

Water/sanitation kits

13th January 2010 ‘An earthquake of a magnitude of 7 (Mw) (reference: United States Geological Survey), struck the Haitian coast on 12 January at 17:00 hours rocking the capital and generating a tsunami alert in Haiti and neighboring countries. ..

…..request from the Haitian National Red Cross Society for immediate support to deliver lifesaving assistance in the following sectors: non-food relief items, shelter, emergency health and water and sanitation..’

(www.ifrc.org)

Alert. Haiti EQ. Pls reprt avlblty of Logs, IT/Tlcom, 2x Rlf, Mobile BHC, Rap Res Hosp & 2x W/S M15 to +41792173344 & eru@ifrc.org. French speakers needed - 13 Jan @ 01:09

D: Haiti: NORWEGIAN RC / CANADIAN RC pls. deploy 1 Health Rapid Deployment Hosp ERU TO PORT OF PRINCE. Norwegian RC Leadership, Thank you - 13 Jan @ 12:45

‘in a few minutes you will receive a voice message from the Norwegian Red cross. You can listen to the message again by calling 23….If you MUST contact us please only use the email address …@redcross.no. We do not have the capacity to reply to individual phone calls. Thanks.’

The hospital was sent from Norway on the 14th January, starting its operation in Port-Au-Prince on the 16th

Use of standards and modular design

Ward and Nursing Station

Field Sinks

DRUG MODULE RED PANTONE 485U

MEDICAL RENEWABLES GREEN PANTONE 359U

ICU AND WARDS, MEDICAL EQUIPMENT GREEN PANTONE 340U

OPD / REGISTRATION ORANGE PANTONE 151U

DIAGNOSTIC RENEWABLES GREY PANTONE 428U

DIAGNOSTIC EQUIPMENT GREY PANTONE 430U

ADMINISTRATION RENEWABLES PURPLE PANTONE 515U

OPERATING THEATRE YELLOW PANTONE 102U

ANCILLARY SERVICES PURPLE PANTONE 513U

POWER SUPPLY BROWN PANTONE 471U

SHELTER BROWN PANTONE 471U

WATER AND SANITATION BLUE PANTONE 305U

STAFF QUARTER WHITE PANTONE

TRIAGE AND FIRST AID (no colour defined) WHITE PANTONE until new colour is defined

MCH / DELIVERY BLUE PANTONE 286U

START UP BOXES WHITE PANTONE RED PANTONE 485U

Color Codes

Emergency Catalogue

Heat and light

Nursing Module

From 2006…

HQ GVA responsible for: The global logistics strategy Standardisation of processes Standard specifications of products

and services Develop logistics capabilities to

disseminate throughout the organisation Funding models, monitoring

measurements and reporting systems IT-systems, competence and

capacity

The 3 RLUs: Have their own physical stocks

of ’unmarked basic relief items’ Cover one specific geographical

area each Have the operative responsibility

for operations within their geographical area Develop local/regional logistics

competence Develop frame agreements with

local/regional suppliers

The change from ...

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Original Centralized Supply Chain

Emergency

= Stock

Geneva HQ

Supplier

Target Population

NS / Donor

Source: Heigh, 2006

The change to…

32

New Regional Supply Chain

RLU Region Stocks or framework

Panama RLU

Dubai RLU

Kuala Lumpur RLU

Geneva HQ

= Stock

Emergency

RLU Supplier

NS / Donor s

Target Population

Source: Heigh, 2006

The result from strategic change 1

Better, Faster, Cheaper

Indonesia Tsunami

04/05

Pakistan Earthquake

05/06

Yogyakarta Earthquake

06/07

Myanmar Cyclone

08 Families receiving full package by 2 months 0 0 42,911 47,723

Days to activate the supply chain from start of disaster 18 10 3 5

Cost to deliver relief package per family at 2 months (CHF) - 824 142 268

Source: Kuckow, 2006; Jahre and Heigh, 2008

(© ICRC)

Some results…

Better preparedness: Less GIK, more local focus (preparedness, competence,

suppliers), more time for strategy development Yogyakarta-operation: More successful regarding lead-times (how fast they mobilised

and how fast they could deliver support to beneficiaries) and cost

Nias off the coast of Sumatra: Re-housing project based on setting up a supply chain for

housing modules was undertaken for less cost and more complete than similar commercial offers.

Source: Jahre and Heigh, 2008

Q3: How will you characterise what IFRC did in the 1st

strategic change concerning pull/push & postponement?

35

Push/pull combining postponement with speculation Manufacturing and time-based postponement by changing the sequence of labelling and thus delaying changes in identifying

basic relief items delaying procurement of culturally sensitive items until they are needed in a

specific operation

Manufacturing and time-based speculation by procuring greater volumes of items to stock up three RLUs before they are

needed forwarding items to RLUs before they are ordered by a specific operation

Speculation of stocks to increase preparedness combined with

postponement of labelling to increase flexibility in a response Preparedness, i.e. the regional concept, gives advantages in the

temporary supply chain that outweigh the cost in the permanent structure

Source: Jahre and Heigh 2008

The Humanitarian Logistics Demand Forecast

A demand forecasting tool to estimate the required logistics capacity for international humanitarian response with: 1. A one year demand forecast 2. A demand forecast for any given operation

on an as needed basis

WH

AT

Provides visibility on what is likely to happen. Data can be taken to forecast: 1. The global demand for material response 2. The initial and on-going demand for material

response in any given disaster type in any given region

PUR

POSE

Compared to prevailing practice; use forecast rather

than actual needs in the first phase

Compared to prevailing theory; historical data is available and can be used to develop such

forecasts

‘PREDICTING THE

UNPREDICTABLE’

Data by disaster type, region, response phase and actor

38 What

Families affected

Disaster type

Regions

Actors

Items

Logistics Services

Weight

Cost

Volume Humanitarian Logistics Demand Forecast

Data on items and services segmented by

40

Disaster types

• Drought/famine • Flood/hurricane • Volcano/earthquake • Other

Zones

• Africa • Americas • Asia • Europe • Middle-East and

North Africa

Emergency (1-3) months

Initial recovery (3-6) months

Recovery (6-12) months

Actors

• Humanitarian • Military • Commercial • Donors

Type of items and services

Items Initial items: jerry can, kits (hygiene, shelter repair), kitchen set, mosquito net, tent, tarpaulin,

sleeping mat

Food items: cereals, pulses, oil

Local procurement items: baby kit, bed sheets, buckets, food parcel, hurricane lamp, soap, mattress, kerosene stove

Shelter items: prefab house, roofing sheets, timber pack, nails, tarpaulins, local shelter

Cash vouchers In-kind and cash donations Services International and local transport, Storage, Procurement

41 Approach

What can the HLI be used for?

42 Use

What/Who Humanitarian Commercial Donors Research & Training

Governments

Preparedness Knowing where to preposition goods & other resources

Market analysis to offer better items and services

Knowing where and who to fund for better preparedness

More relevant research, better access to data and tools for training

Contingency planning

Response Plan and start initial response while allowing time for appropriate needs assessment

Better and quicker basis for appeals and accountability Coordination

43

‘Predicting the Unpredictable’ - who can and would want to use the HLI?

Humanitarian Organizations

Governments Militaries

Private Companies Donors

Educational and Research Institutions

Who

Customised temporary supply chain secures

speed, capacity, quality & cost.

A local supply chain to cope with diversity as response

develops

An existing (permanent)

supply chain to cope with the

demand after a disaster

IFRC 2nd strategic change - Importance of strategic and tactical planning Strategic Planning Allows organisations to plan

and implement permanent supply chains Limits unpredictability and

therefore cost in response, i.e. temporary supply chains

Tactical Planning Allows organisations to

combine push and pull in a specific operation Increases relevance while

reducing cost in the response, i.e. temporary supply chain

IFRC Strategic Planning Mechanism Context

Organisation objectives

Organisation delivery

Logistics activity

Setting

Demand analysis

Internal needs

External trends

Options LOG2015

• Vision • GLS role • GLS objectives • GLS targets • Method

Implement

Global

Zonal

Unit

Individual

Annual plan forecast , budget, objectives, review

46

Strategic Planning Example IFRC Logistics 2015

Purpose Strategic objectives

Planned activity

Forecast

Composition 4 year plan

• Services • Demand • Resources • Budget • Enablers

GLS 4 Year LTPF

Utilisation

ZLU

6 Month cycle,

GLS 4 Year LTPF

GLS 4 Year LTPF

Plan

Check

Do Act

Global

Basis

Activity

Technical modelling

Experience

47

Organisations Strategic Objectives Vision 2020

Strategic Aim 1

Save lives, protect livelihoods, and

strengthen recovery from disasters and

crises

Strategic Aim 2

Enable healthy and safe living

Strategic Aim 3

Promote social inclusion and a culture

of non-violence and peace

Enabling Action 2 Pursue humanitarian diplomacy to prevent and

reduce vulnerability in a globalized world

Enabling Action 3 Function effectively as the IFRC

Enabling Action 1 Build strong National Red Cross and Red Crescent Societies

48

Internal and External Considerations External Internal

Optimizing services in

humanitarian logistics

49

Market Analysis

50

Options – future of IFRC Logistics

Objective Set 1

Capacity Building

Objective Set

2 Provide services internally (Fed+NS)

Objective Set 3

Provide services to

others

Option Advantage Risk Objective 1 Reduced investment Values compromised Objective 1+2 Some influence Some investment Objective 1+2+3

Increased influence Increased investment

Steady state No investment Unsustainable 51

Solution

Objective 1 Capacity Building

Activities

Objective 2 RCRC Ops Support

Activities

Objective 3 External Services

Activities

Training Measurement Family packs Local procurement Shelter packs Procurement Fleet Air support

NS Development Training Manuals Measurement

Family packs Shelter packs Procurement

Service volume

calculation based on last 5 year

average

4 year resource plan

4 year service plan

4 year budget

IFRC Tactical Planning Mechanism

Distribute & Impact

Deliver & Report

Sourcing Plan

Assess Market

Response Proposal

Distribute Plan

Type

Plan and Call Off

OK?

Delivery System

OK?

Delivery Plan

OK?

OK?

Beneficiary ID

Items Sourcing

OK?

Programme Logistics

no

no

no

items

no

no

yes

cash

yes

yes

yes

yes

Reconcile

Design

Source

Deliver

Tactical Planning Example

Haiti Earthquake 2010 – design

58 ne

eds

time Relief Recovery

Recovery

International Supply Chain

Local supply chain E

quip

men

t M

ater

ials

E

xper

tise

Tactical Planning Example

Haiti Earthquake 2010 – source

Sourcing Approach

Mob table + pipeline

Requisition placed

Source

Supplier Identified

Warehouse

Call forward

Warehouse

Requisition filled

Warehouse

Supplier identified

Supplier Identified

Consolidation

Mob table + pipeline

Santo Domingo Cell

Haiti Logistics Team

Panama Logistics Cell

LocalSanto Domingo

Panama

Logic consolidated information

LogicLogic

Logic

1

3

2

Inbound

Consolidation

Outbound

IFRC Logistics

"We can now predict what will be needed in the first four weeks of a disaster until we get feedback from

teams on the ground,.."

(Olsen, Head GLS, IFRC, 19th October 2011).

61

STUDENT TASK With basis in the logistics strategy and structure of IFRC as described in Jahre 2008 (1st strategic change) you are to discuss alternatives for their 2nd strategic change using the information from Module 2 and the LOG2015-document. This should include an analysis of Factors that are dictating or will influence future development (Majewski et al.

2008 and lecture in Module 1) Options that are available to the IFRC (e.g. outsourcing of logistics,

centralisation of sourcing, warehousing, postponement, etc.) Risk and benefits of these alternatives compared to the choice they have

made and; What is your recommendation

You are requested to use the compulsory literature and lectures in the course to solve the case, but you can also use additional articles/reports.

62