MANAGING SUPPLY CHAINS FOR POST DISASTER RECOVERY

Transcription

1 MANAGING SUPPLY CHAINS FOR POST DISASTER RECOVERY Amal S. Kumarage Senior Professor Ranil S. Sugathadasa Senior Lecturer Department of Transport & Logistics Management Faculty of Engineering University of Moratuwa 23 rd October 2012 ISMM Conference Colombo

2 What is a disaster? A disaster is a serious disruption of the functioning of society, causing widespread human, material, or environmental losses that exceed the ability of the affected society to cope using only its own resources as defined by The United Nations office for Disaster Risk Reduction(UNISDR). Disasters happen when there are one or more related events resulting in a hazard meeting exposure due to vulnerability. (e.g. Nuclear explosion) This meeting may be sudden or built-up over time and also observable or expected (e.g. flooding) An event becomes a disaster when the community's capacity to cope is overwhelmed and the current status quo becomes untenable. (e.g. SARS) The situation is then declared an emergency (or crisis) and external assistance is requested.( e.g. Rescue operation of Tsunami affected 2

3 Categories of disasters Disasters are often classified according to their cause, natural or manmade. International Federations of Red Cross (IFRC) has five main categories of disasters: Natural(e.g. droughts), Hydrometeorological(e.g. floods), Technical (e.g. industrial accidents such as chemical explosions, nuclear explosions, and accidental release of some hazardous material), Geological(e.g. earthquakes) and Human related(e.g. epidemics and population movement). 3

4 What is a crisis? an unstable or crucial time or state of affairs in which a decisive change is impending; especially: one with the distinct possibility of a highly undesirable outcome. According to Merriam-Webster, defined as A crisis usually follows a disaster (e.g. tsunami) A crisis if not managed well can lead to another (possibly bigger) disaster (e.g. flooding) 4

5 Relationship between disaster and crisis- Disaster can create many crisis in both humanitarian and organizational phases

6 What is a crisis? (cont d) In a supply chain, a crisis occurs when one or more activities in the chain are interrupted (by a disaster), resulting in a major disruption of the normal flow of goods or services. Although crisis in a supply chain may be unpredictable, it may not be unexpected. The term crisis not only refers to an unexpected catastrophe, but also to the slow (or expected) build-up of environmental, political, or economic factors that act on a society's vulnerabilities. The magnitude of the effect of a crisis is based on numerous factors and varies with each occurrence.

7 Relationship between disaster and crisis- Crisis can create disasters leading to many crisis The process of making proactive decisions to avoid a reactive decision in overcoming a crisis is called crisis management.

8 Relationship between humanitarian and organizational supply chains in the post disaster recovery Supply Chains for Humanitarian Phase Supply Chains for Organizational Phase

9 Some recent examples Natural disasters, such as the earthquake in Taiwan that affected PC manufactures like Dell and Apple in 1999; Hurricane Mitch that destroyed banana plantations, thus affecting supply chains like Dole in 1998; Hurricane Floyd that flooded the Daimler-Chrysler plant in Greenville in Outbreak of mad-cow disease that caused a shortage of leather goods ineuropein2000; Outbreak of SARS that impacted the IT supply chains in Tsunami of

10 Some recent examples- Man made Man-made disasters, like the fire accident at the electronics plant in Albuquerque, New Mexico, which caused $400 million in lost sales at Ericsson; Longshoreman strikes at US ports in 2002, which caused an estimated $11 to22billioninlostsales; Terrorist actions like 9/11 that crippled transportation networks across the USA. (Sheffi, 2001; Martha and Subbakrishna 2002; Monahan et al., 2003; Norrman and Jansson, 2004; Hale and Moberg, 2005). 10

11 Supply chains for Humanitarian Phase Supply chains and logistics have a vital role to play in a crisis in order to save lives and minimize suffering. This is the Humanitarian Phase Efficiency and effectiveness of supply chain and logistics process will decide the effectiveness of short-term reactions such as relief operation and medium term reactions such as restoring infrastructure facilities including health, transport and rebuilding the disaster affected infrastructure and buildings. Flow of reliable information will ensure the flow of financial assistance which in turn will facilitate the flow of people, materials etc for effective short, and medium and long term counter measures. 11

12 Process of disaster recovery Soon after a disaster, the capital infrastructures such as roads, buildings may be destroyed and normal day to day activities may cease or be changed. Process of recovery can be divided into four stages (Hass): emergency, (for survival) restoration, (to restore to previous functional condition) reconstruction, ( to return to exact previous condition) and major reconstruction (to improve above the previous condition) This model assumes that disasters and the recovery process are ordered and known. 12

13 Process of disaster recovery (cont d) Periods: Emergency Restoration Capital Damaged or Patched Rebuilt Major Construction Stock: Destroyed (Replacement) (Commemoration, Betterment, Development) Normal Ceased or Return and Return at Improved and Activities: Changed Function Predisaster Levels Developed or Greater Maximal Reconstruction I Reconstruction II Copin ng Activity Minimal Disaster Event Time in Weeks Following Disaster Sample Completion of Search Restoration of Attain Predisaster Completion Indicators: and Rescue Major Urban Services Level of Capital of Major End of Emergency Return of Refugees Stock and Construction Shelter or Feeding Activities Projects Clearing Rubble Rubble Cleared from Main Arteries 13

14 Process of disaster recovery (cont d) Emergencyphase is continued until the search and rescue as well as feeding and shelter is completed, alongside clearing rubble from main roads. In the restoration phase, the damaged capital infrastructure will be patched to ensure the normal day to day operation as much as possible. This continued until the restoration of major urban services such as roadways, electricity, water, sanitation etc. In the reconstruction phase 1, the focus is to rebuild the infrastructure with the intention of returning to the pre disaster level or greater. In the reconstruction phase 2, major construction should be started with a proper master plan targeting improved and developed level post the disaster. 14

15 The phases of disaster recovery management (Carter,1991) Impact Response Preparedness Recovery Mitigation Development 15

16 Importance of Supply Chains in: Response and Recovery Stages Response /Relief At the time of a crisis, the response to emergencies must be timely, effective, appropriate, and well organized and as such relief supply chain and logistics can play a key role to procure, transport, receive, and distribute supplies to the site of the relief efforts. Recovery As relief activities move from the response phase to recovery and development, the supply chain moves away from a "push" strategy (where aid is supplied without waiting for demand to be accurately determined) toward a "pull" strategy (where needs determines the quantity of aid being shipped). Over the last three decades, the economic emphasis on speed and efficiency has resulted in JIT and built to order concepts in supply chains. As a result, supply chains today have become leaner and more profitable since the capital previously locked in inventory is instead available for other profitable activities). This has increased the risks in supply chains, making them more vulnerable to crisis. 16

17 Importance of Supply Chains in Preparedness Stage: Effective& efficient management of External sources- Effective and efficient management of Internal sources- Impact Response Preparedness Recovery Mitigation Development 17

18 Concluding findings 1. The supply chain should be prepared at a crisis for responding to both humanitarian and organizational recovery. 2. There must be appropriate response of the Supply Chains for both Humanitarian and Organizational recovery 3. There should be a development arising from the impact that would lead to better preparedness 18

19 Concluding findings Response: Effective and timely communication Effective coordination and collaboration Effective financial supply Monitoring, evaluation and control Using cultural advantage Recovery: Project management approach for recovery Effective change management to establish new normal situation Using cultural advantage 19

20 Concluding findings Development: Infrastructure management Responding to much more than the current disaster Effective financial supply Mitigation: Responding to much more than the current disaster 20

21 THANK YOU to avert the next disaster!!