Perations Research to Improve Disaster Supply Chain Management

8/8/2019 Perations Research to Improve Disaster Supply Chain Management

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PERATIONS RESEARCH TO IMPROVE

DISASTER SUPPLY CHAIN

MANAGEMENTEORMSEditors

Sample Articles

Basic Interdiction Models

Managing R&D and Risky ProjectsOperations Research to Improve Disaster Supply Chain Management

The M/G/s/s Queue

Table of Contents

Ozlem Ergun, Gonca Karakus, Pinar Keskinocak, Julie Swann, and Monica VillarrealH. Milton Stewart School of Industrial and Systems Engineering, Georgia Institute of

Technology, Atlanta, Georgia

Abstract

Disasters recently received the attention of the operations research community due to the great

potential of improving disaster-related operations through the use of analytical tools, and the

impact on people that this implies. In this introductory article, we describe the main

characteristics of disaster supply chains, and we highlight the particular issues that are facedwhen managing these supply chains. We illustrate how operations research tools can be used to

make better decisions, taking debris management operations as an example, and discuss potentialgeneral research directions in this area.

Keywords: humanitarian logistics; disasters; public sector OR

INTRODUCTION

From improving the performance of fire and police departments, optimizing the publictransportation system, programming delivery of blood to hospitals, planning housing projects,

analyzing drug policies, to improving delivery of meals to senior citizens, there are many

examples of how operations research (OR) addresses community needs (1). Public sector OR

deals with solving public interest problems through the application of analytical tools. One of thepublic sector OR application areas is humanitarian OR, which particularly deals with the

problem of delivering relief to people affected by a disaster. Hence, natural and man-made

disasters are the most common subject of attention for humanitarian OR.

There were 6637 natural disasters between 1974 and 2003 worldwide, with more than 5.1 billion

affected people, more than 182 million homeless, more than 2 million deaths, and with a reported

damage of 1.38 trillion USD (Center for Research on the Epidemiology of the Disasters


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(CRED)) (2). In 2005 alone, over 180,000 deaths and 200 billion USD economic losses haveoccurred due to disasters according to the Disaster Resource Network Humanitarian Relief

Initiative (HRI) (3). The September 11attacks (2001), tsunami in South Asia (2004), Hurricane

Katrina (2005), and earthquakes in Pakistan (2005) and Java (2006) are just some examples of

the deadliest disasters witnessed by humankind in the past few years.

The consequences of these events are enormous, not only in the short term with injuries, loss of

life, and damaged infrastructure but also in the long term with changes in social and economicconditions. Even though the occurrence of these events could not have been avoided, the impact

could have been reduced by different means including humanitarian OR. For example, adequate

warning systems could have prevented injuries and fatalities during the 2004 tsunami and help

could not reach Pakistani earthquake victims due to logistics difficulties with limitedinfrastructure. Humanitarian OR differs from other OR applications because it deals with

particularly unique and highly variable events, often in resource-poor and limited infrastructure

environments, with multiple organizations trying to work together in response activities

simultaneously. These factors increase the complexity of responding to these events.

The focus of this article is on supply chain-related issues in humanitarian operations, with a

greater focus on disasters rather than ongoing conditions. We discuss differences betweenregular supply chains (SCs) and SCs used for disaster planning and response, humanitarian

SCs. First, we describe characteristics of supply and demand of disaster SCs, followed by a

discussion on the particularities of the execution and management of these SCs. Next, an

application of OR in humanitarian operations is examined in more detail, and finally main

challenges and future research directions are presented.

OVERVIEW OF DISASTERS

Disasters can be grouped into two main categories: natural and man-made disasters. Naturaldisasters are the consequences of natural hazards that affect people, whereas man-made disastersare caused by human actions. A more detailed categorization of disasters is shown in Table 1

along with examples. Also, disasters could be categorized in predictable timing (or seasonal)

such as floods or unpredictable timing like earthquakes and predictable location such as

hurricanes or unpredictable locations like tsunamis.

TABLE 1. Disaster Categorization and Examples

Man-Made Natural

Slow onset Political crisis, refugee crisis Famine, drought

Sudden

onset

Terrorist attacks, chemical leaks Hurricanes, floods, earthquakes, tsunamis

No matter the type of disaster, the management of these events typically follows four sequential

stages: mitigation, preparedness, response, and recovery. Mitigation is the application of actionsto help prevent or reduce the hazards of the disaster. It differs from the other stages because it


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focuses on long-term measures for reducing or eliminating risk (4). Preparedness activities helpprepare for response once a disaster occurs. The response phase covers activities for mobilizing

emergency responders and services for the affected region. Recovery is the stabilization phase

during which restoration of the disaster area is conducted in the long term. The disaster

management timeline with the related operations can be seen in Fig. 1.

Figure 1. Disaster timeline and operations.

There has been some research on the use of OR techniques in disaster management. Altay andGreen (5) survey the literature and summarize the research in this area. Most of the papers

published deal with man-made disasters (47.6%) or general disaster operations management

(40.5%). Among the papers reviewed, 61.1% is on the pre disaster phase (mitigation andpreparedness) and mostly based on risk analysis, 23.9% on response, and only 11% aboutrecovery. More than half of the research is based on model development, followed by theory and

application development. Most of the application studies are made for the disaster phase,

whereas the theory papers mostly focus on the pre disaster phase.

SUPPLY

The primary role of a supplier in an SC is to source the required items downstream. The main

sources in a humanitarian SC are vendors and donors. Vendors can be local to the region wherethe disaster occurred or global. Donors are the sources of donations of any type (financial,

products, services, etc.).

Supplies consist of relief items, personnel/volunteers, and transportation and constructionresources, among others. Most of the supplies fall into the relief items category. Figure 2 shows a

categorization for relief items, as well as some examples. Consumable relief items require

recurrent delivery to the affected community and nonconsumable relief items require a one-timedelivery only. Nonconsumable operational relief items are required to set up an operation, while

nonoperational are required to meet the essential needs of the affected population.


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Figure 2. Relief supplies categorization and examples.

There are specific challenges related to supplies that come from in-kind donations. First, sincethe quantity and mix of the supplies depend at least to some degree on the donor, there is a high

uncertainty of what is going to be received. Moreover, the timing of these supplies might not be

appropriate: for example, consumables that arrive too early and cannot be stored for a long time

or nonconsumables that arrive after the operation was set up are wasted. There are many cases inthe recent history where donated items were not needed and were not deployed to people

affected by the disaster. Autier et al. (6) discuss the case of drug supplies after the 1988

Armenian earthquake, when at least 5000 tons of drugs and consumable medical supplies weresent by international relief operations, but only 30% were immediately usable (sorted, relevant

for the emergency situation, and easy to identify), and 20% of these supplies had to be destroyed

by the end of 1989. Unsuitable donations caused bottlenecks in the SC, making storage and

transportation processes more inefficient.

Donations place additional complications on the procurement process, since it is difficult to

define what will come from donors and what will have to be sourced from vendors. But even ifdonations are not considered, the procurement process is by itself a challenging task. Supply

availability is highly dependent on the location. Organizations often have a low visibility into

existing inventory. Control of inventory is usually given to country offices, resulting in excess

supplies in some locations and scarcity in others. The selection of suppliers during theprocurement process includes not only total cost versus quality, response time, and reliability

trade-offs but also considers less measurable factors like activating local economies by choosing

a local provider. Developing contracts with suppliers is difficult given the uncertainty of the

type, quantity and timing of items required, and the available budget. Also, there is competitionfor supply sources when there are local or international nongovernmental (nonprofit)

organizations (NGOs) sharing similar relief objectives; further there is lack of coordination

among them.

Challenges faced while sourcing from donors or vendors after the event occurs may affect supply

availability. The shortage of supplies may cause emergency response to be ineffective and result

in increased human suffering (7). Hence, it is important to develop strategies to accelerate supply


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response or deal with unpredictability of demand. One strategic initiative that has been recentlyimplemented by several humanitarian organizations is the prepositioning of inventory instead of

procurement after the fact. Prepositioning allows not only faster response but also better

procurement planning and an improvement on distribution costs; however, it requires an

additional investment before the event occurs, and funds are more difficult to obtain.

In summary, the supply process in a humanitarian SC is different from regular SCs. Supply in

regular SCs follows a standardized order fulfillment process, while in the case of disasters aportion of supplies comes from voluntary donations. Also, since humanitarian SCs are often in

resource-poor environments, supply may be especially variable. Greater certainty on the supply

quantity, location and time; longer relationships with suppliers; and information about the

suppliers available at the location of interest before decisions are made allow better procurementcontracts for normal SCs. Finally, when common supply deals with routine events and not a one-

time disaster event, developing a procurement expertise is easier.

DEMAND

The customers in a disaster SC include the population at the affected area, as well as

intermediate customers at local or global storage facilities. Their needs change significantly

according to disaster types and the phases in the disaster timeline. In the pre disaster phase,protection-based items such as batteries and flashlights are highly demanded both by the people

and local stores for preparation, while immediately after the disaster, the high demand changes to

first response items such as drugs, medicine, food, water, and shelter. Long-term recovery itemssuch as infrastructure repair and construction equipment are among the items needed during the

post disaster period.

The demand patterns are also different in each phase. The pre disaster stage consists of planning

processes that are mostly based on forecasts, so the demand is not certain. Once a disaster hits,demand becomes complex: high and quickly changing, but more certain based on the reportedneeds that are sent eventually by the assessment team in the disaster area. During the post

disaster period, demand again stabilizes and becomes more predictable with the real data from

the region. Overall, demand structure of disasters is complicated and challenging because of thehigh unpredictability of its three main dimensions: time, location, and magnitude. Also, disaster

demand has other drivers related to those dimensions such as population characteristics,

economy, political conditions; these factors are also complex to formulate.

Dependency of demand in disasters on these hard-to-measure factors and its high uncertainty arethe main differences from the demand in regular SCs. Unlike logisticians in the private sector,

humanitarian workers are always faced with the unknown: when, where, what, how much, wherefrom, and how many times; in short, the basic parameters needed for an efficient SC setup arehighly uncertain (8). Disaster demand forecasting is also difficult due to the lack of historical

data. Even though there do exist some databases from the past experiences prepared by both

NGOs and governments such as the EMDAT: Emergency Events Database by the Center forResearch on the Epidemiology of Disasters (9), they are occasionally inadequate because of

inconsistent and/or insufficient data collection and reporting problems. Additionally, disasters

are unique even if they occur in the exact same location, since other factors such as population


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structure or economic conditions could have changed since the previous occurrence. Hence,

historical data is not always very useful for predicting future demand.

DISASTER SUPPLY CHAINS

SCs link the sources of supply (suppliers) to the owners of demand (end customers). In atypical humanitarian SC, governments and NGOs are the primary parties involved. Governments

hold the main power with the control they have over political and economical conditions and

directly affect SC processes with their decisions. After the 2004 tsunami, for instance, the Indiangovernment did not invite international aid agencies to participate at all in the first 60 days of the

relief effort, and functioned during that period with the local sources of supplies (10). Donors,

military, and the media are the other significant players in the humanitarian SCs.

Disaster Supply Chain Management

SC management is the process ofplanning and controlling the operations of the SC by

coordinating the different parties involved in the process of fulfilling customer demandefficiently.

Coordination and management of disaster SCs has challenging problems. The supply network ishuge and complicated with numerous players (donors, NGOs, government, military, and

suppliers), and it is hard to coordinate all of them along with all the items that need to be

delivered. Despite the different cultural, political, geographical, and historical differences amongthem, collaboration and specialization of the tasks between NGOs, military, government, and

private business are increasingly needed in the humanitarian SCs (8). Despite being experienced

and aware of the key points in humanitarian SCs, people in charge of logistics and SCmanagement in most NGOs or other humanitarian organizations are not often specialized in this

area; thus, they are not experts in the tools for solving the problems that might occur during theoperations. There could also be domestic barriers such as the need of excessive paper work and

specific policies of the region that may cause additional delays, as well as external complications

due to foreign relations.

Use of technology is essential in managing SC operations and maintaining coordination, but the

organizations usually do not use specific software or other technology tools for SC management.The case study written for the El Salvador earthquake in 2001 (11) focuses on coordinating the

logistics and SC operations using humanitarian relief supplies management software called

SUMA. SUMAs objective is to develop a standardized methodology and operational capacityat the national or regional level to manage relief supplies and equipment efficiently (12). The

implementation of this software allowed the identification of urgent needs, helped preventunsolicited donations that could upset the system, and created reports with centralizedinformation to inform the population about the development of the operations, building visibility

and transparency through the SC.

Finally, goals and performance metrics of humanitarian and regular SCs differ notably. Unlike

the humanitarian SCs, which do not have any profit targets and rely heavily on volunteers anddonors, in regular SCs, stakeholders are the owners of the chain. A company has to improve its


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profits and aims for making more money. It is easier to prove success using profit data in privateSCs, but how to prove success is not clear for humanitarian SCs because cash flow data may not

fully explain results. Nevertheless, the numerous models based on minimizing cost (or

equivalently, maximizing profit) for building efficient SCs can be applied to the humanitarianSCs directly or with modifications. One example is an integrated multiobjective SC model that

uses fill rate, cost, and flexibility as measurement factors for simultaneous strategic andoperational SC planning (13). Lodree and Taskin (14) work on stochastic production/inventorycontrol models for recovery planning, specifically for hurricanes, to determine how long to

postpone decision making to optimize the trade-off between logistics cost efficiency and

hurricane forecast accuracy.

Disaster Supply Chain Execution

The execution or delivery process in an SC consists of bringing supply and demand together.

Delivery could mean different things at each disaster stage, such as setting up temporary

warehouses or shelters during the pre-event stage or delivering relief to affected people during

the response stage.

Distribution operations within a disaster framework are very challenging. Owing to the

complexity of the sourcing process and the uncertainty of demand, there could be a big gapbetween supply and demand in terms of mix, quantity, timing, and location, and matching them

becomes a hard task (15,16). Handling expertise becomes more challenging due to the large span

of relief items and the use ofad hoc warehouses. Transportation infrastructure is highlydependent on the location; it may be damaged or disrupted and suffer from dynamically

changing conditions. Additionally, communication infrastructure may be disrupted. Because of

the sudden onset of most disasters, problems associated with inadequate distribution planning are

common, including high expediting costs, choice of wrong transportation mode and/or provider,

bottlenecks in the port of entry, and incomplete execution. Hence, preparation during the pre-event stage is vital, and strategies such as the use of staging areas for prepositioning and

distribution of relief supplies (17) help overcome the difficulties in getting the right supplies to

the right people, at the right time, at the right place.

Humanitarian SC delivery operations may have different targets than for-profit SCs. Usually,

there is a trade-off between cost and responsiveness of the delivery process. In the case ofdisaster SCs, responsiveness concerns human welfare, and it has a higher priority compared to

operational cost than regular SCs. Since every human life is equally valuable, fairness is a

particularly important criterion for disaster SCs, and their responsiveness should not be based to

the social or economical condition of the affected people.

AN ILLUSTRATIVE EXAMPLEDEBRIS MANAGEMENT OPERATIONS

Depending on the nature and severity of the disaster, and the characteristics of the affected area,

there could be massive amounts of debris. The resources required to collect the debris might be

limited, debris could be blocking roads and obstructing aid supply, and some types of waste canendanger community health and safety; therefore, resources have to be allocated adequately to

speed up the debris collection and disposal process, while minimizing its impact. Debris


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collection becomes a complex logistics issue, and a debris management plan should bedeveloped in advance addressing each disaster stage. Figure 3 shows the main elements of such a

plan based on the guidelines of the Federal Emergency Management Agency (FEMA) of the

United States (18). While a management plan answers the question of what to do, OR answers

the question of how to do it most efficiently and effectively (19).

Figure 3. Elements of debris collection management plan.

During the pre-event stage, forecasts are made to predict the quantities and location of debrisprior to disasters. Debris forecasts are used to plan for the resources, to design debrismanagement sites for temporary storage, and to develop adequate strategies for debris final

disposal. An adequate debris forecast that considers the type and extent of the potential disaster

and historical data is essential for effective preparedness. During the resource planning, debriscollection authorities may realize that existing forces and equipment will not be sufficient and

some services must be outsourced. Choosing both the right contract (unit price, lump sum, time-

and-materials, etc.) and the right contractor is fundamental for controlling the costs, quality, andavailability of the procured services. Finally, a facility location model could be used to select

among potential debris management sites, such that the use of these locations expedites the

collection process, while minimizing additional costs.

During the response stage, having access to injured people and to critical facilities such ashospitals or police stations is crucial. Roads and streets that are essential for the emergency

operations might be obstructed, and debris must be removed to facilitate rescue efforts. A

network model can determine how resources should be allocated and which roads should becleared first. Such a model takes into account the priority of the facilities to be connected in

order to maximize the supplied relief, as well as the available quantity of workforce and

equipment.


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The longest phase of the debris collection process occurs during the recovery stage of a disaster,once emergency and other major routes are cleared from debris. After the disaster, community

residents begin to take debris to public rights-of-way, and this debris along with what was left

after the response stage has to be collected. Debris such as white goods (containing refrigerantsand other regulated machine fluids) and hazardous waste has to be handled with special care due

to environmental and health safety impact. Scheduling and routing models for the debriscollection resources can be developed to minimize the impact of the remaining debris whileusing the available resources efficiently to reduce costs. A model of this nature assigns each

resource to loading tasks at the debris sites and unloading tasks at the debris management sites.

After the debris is collected, it may go through some reduce or recycle processes, and then be

taken to its final destination. Deciding the best policies to follow for each debris type is not atrivial problem when different constraints such as environmental regulations, available

capacities, and budget are taken into account. A mathematical model can help the decision maker

to find an optimal trade-off of cost and environmental impact.

CHALLENGES AND FUTURE RESEARCH DIRECTIONS

The use of OR techniques for disaster preparedness and response can help improve the efficiency

and effectiveness of processes extensively. The challenges defined in this paper about theparticular structure of disaster SCs demonstrate their differences from regular SCs. Since disaster

SC management is a newly emerging research area, there are many problems to be solved and

new directions to be discovered for future research beyond the limited literature so far.

Most of the current research on disaster operations management focuses on the pre-event phase,

which covers planning, mitigation, and preparedness processes. There is limited research in

recovery planning phases. Furthermore, when a specific problem within a disaster context is

modeled, the model usually focuses on one specific stage (pre-event, response, and post-event).

However, there is an undeniable interaction between the decisions made at different stages, thatis, what is done today affects what can be done tomorrow. Therefore, more comprehensive

models integrating multiple disaster stages are needed.

One of the main characteristics of disaster SCs is the presence of multiple stakeholders (NGOs,governments, local authorities, etc.). In this multifunctional environment, each of these players

might have different objectives and priorities, leading to potential conflicts and inefficiencies inoperations. Also, the best decision for each stakeholder alone is not the same when the entire SC

is considered, that is, inefficiencies exist when individual incentives are not aligned. To handle

the system as a whole, hierarchical planning, multiobjective models, centralized/decentralizedsystem trade-offs, standard procedures, information sharing platforms, collaboration

mechanisms, and incentive models need to be developed and analyzed.

When dealing with disasters, the human factor is always present. Even the best model that

reflects the real conditions does not provide the perfect solution for disasters unless it takes

human factors into account. Therefore, there is a need to incorporate behavioral aspects into themathematical models. For example, in order to design an effective evacuation model, the model

should be able to predict and incorporate the different reactions and attitudes of the people. There

is a limited amount of work connecting mathematical representation and behavioral dynamics


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(20), and this multidisciplinary approach has a high potential for more efficient solutions for

disaster SCs.

Finally, there is need for models that fully describe a disaster SC system within stochastic,

dynamic, and adaptive settings. A stochastic model would be able to capture the high uncertainty

in demand, supply, and delivery in these SCs. Even though there is some work done modelingdisaster and emergency-related problems under uncertainty, many of the models in the literature

are deterministic. Incorporating the dynamics of the choices made during each time period iscrucial because of the strong interactions of these decisions. The proposed models should also be

adaptive to incorporate new information when a change occurs. In a disaster framework,

information is usually limited at the beginning, and as time passes, more and more accurate

information becomes available. The model should capture and make use of the new pieces of

information.

Disaster SC management is a rising area of OR, which has the potential to make a significant

impact on the society. Defining the systems accurately and developing models that fit the

structure of disasters are essential for applying OR techniques in disasters applications.

Acknowledgments

We gratefully acknowledge support of our work from the Harold R. and Mary Anne Nash Junior

Faculty Endowment Fund and the Focused Research Program Grant from the College of

Engineering at Georgia Tech.

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