Aung Kyaw Moe / Task 9 - Humanitarian Aid and Supply Chain

Memo
To: From: Date: RE:

Francois Damba Aung Kyaw Moe

28 May 2013

TASK 9 HUMANITARIAN AID SUPPLY CHAIN

Dear Francois, I have learnt that Bruno Bodanza is due to attend a meeting later today to discuss the potential hurricane situation and to contribute to the plans from a supply chain point of view. In this regard, I want to contribute my initial views on the likely effect the hurricane will have on the supply chain and what can be done to mitigate this so that SCILaid can continue to provide aid after the hurricane strikes. I want to manage my presentation for him in two parts: the first part concerned with the potential effects of hurricane situation on supply chain whereas the second part is dealing with how to mitigate this situation in order to continue our aids programs after the damages of the hurricane strikes.

Potential effects of hurricane situation on supply chain

A supply chain is a process that integrates, coordinates and controls the movement of materials, goods and related information; from suppliers and donors to meet beneficiary requirements in a timely manner. Generally speaking, it is rarely understood that that the logistics and supply chain element is one of the most complex and largest parts of humanitarian aid operations, especially in an emergency situation. Basically a supply chain is composed of two main components: the flow and goods and the flow of information and these two essential elements of a supply chain will be directly affected when a disaster like hurricane happens. Usually when a disaster breaks out the necessary supplies and goods may be pushed down the supply chain but, as the needs become clearer, the chain is responding to the demand placed on it by people in the field operation. This means that the good flows come first and then feedback flow of information follows. Impact on the flow of goods in SCILaid Betaland

1. The flow of goods starts with the acquiring and stocking of raw materials, most of which are to be imported rather than locally found. 2. The next step is that the manufacturers actually manufacture the finished goods in their factory and stored in their warehouses. 3. Then these goods moved into the markets managed by suppliers, both wholesalers and retailers to whom SCILaid put the purchase orders. 4. After that, the ordered goods are to be transported via sea freight or air freight to the ports of entry into Betaland and there are some procedures of customs clearance to be followed. 5. Then these officially cleared goods are carried toward the main warehouses of SCILaid HQ in Dhetra and then to the warehouses of suboffice in Chagong. Program staff manage to move these goods stored in the regional warehouses to the beneficiaries living in the refugee camps at border area. This is the general picture of the flow of goods in SCILaid Betaland supply chain. When a hurricane disaster happen in the country, the following negative impacts will crop up: The foremost area to get impact is that of transportation. Because of the extremely bad weather, there can be flights cancels and delays The in-country transportation and distribution will also be affected because of road blockage by land sliding and bridges damaged by wind and torrential water. The waterways are very dangerous to use at that time Production lines are to be stopped and delayed and the important goods are not available at that time Backward flow of goods is almost impossible to send back up the supply chain because of receiving faulty goods, too many goods being supplied, or the wrong type of goods being supplied. And transport resources are used to move and store goods, which are either not needed by beneficiaries or are not suitable to be given to them.

Impact on the Information Flow Another aspect of supply chain to be affected by the hurricane disaster is that of information flow. The important piece of information that is required is, what are the goods needed by the beneficiaries, what quantities are required, when are they required and where are they required. It is this information that will initiate the entire supply chain process. All the activities involved in the supply chain process are there to respond to this information. This information will tell us about where goods are in the chain, what is held in warehouses, and what is in transit, when goods will arrive at different points in the chain, e.g. goods arriving at ports that will need unloading and goods arriving that will need storing in a warehouse and what type of goods will be arriving at different points in the chain and do they need any special handling or storage requirements. At the time of emergency like hurricane disaster, the whole information flow can be interrupted and blocked because Electricity in the area will be cut off Telecommunication and radio transmission facilities can be destroyed Movement of staff and messages can be blocked and trapped

In this case, at the start of the relief operation in an emergency relief phase of a disaster situation, it is usual that goods may initially be pushed down the supply chain, before the actual needs of beneficiaries is fully understood and finalised. In this case information on what is being pushed down the supply chain is vital so that the movement of these goods can be planned, monitored and controlled.

Impact on the Response Time and Delivery Time In the emergency relief phase of disasters, speed of response is one of the most important factors to take care of for humanitarian aid operations. What is the most crucial thing at that time is to send the goods and aids to the beneficiaries as soon as possible. An emergency like hurricane strikes can delay Response Time (the overall time taken for goods to flow along the supply chain) and Beneficiary Delivery Time (the time from when it is identified that beneficiaries need goods, until they receive them) due to several factors as follows: Destruction of the manufacturing mechanism of supplies Scarcity of raw materials and human resources at the critical time Delay of transportation due to bad weather and road damages Destruction of Warehouses and storage facilities

Impact on Cost and Price Besides speed of the flow of goods and information in a supply chain, the other things to take care of are Right price and Minimum cost in the humanitarian aid operation. The operation of the supply chain necessitates the purchasing of goods and services. I that case, it is important to check How well these goods and services are purchased and the price that is paid for them that will impact on the cost of the aid operation. All cost of operating the supply chain including transporting and storing products is also a decisive factor and needs to measure How efficiently these activities are set up and managed will have an impact on the cost of the total supply chain process and on the cost of the aid operation. These two factors of Cost and Price of supply chain can be affected by the impending hurricane disaster in Betaland. Disruption of the major flow of goods and supply from overseas and local markets Scarcity of raw material and finished products Extra cost for wrong goods to send back and unexpected need of supplies Competition among humanitarian aids organisations to acquire the same goods Shortage of human resources and professional staff

How to Mitigate Difficulties

Immediate actions at the onset of an emergency When an emergency like hurricane happen, Supply and logistics personnel on the ground (or if there are none present, the emergency officer) should do the following things immediately: (1) Check import facilities and arrangements. There are seaports like Mugla Port and Jumna Port and Airports like that of Dhetra and Chagong, and Which seaports and airports are functioning? Which direct road and rail links are open from neighbouring countries? Which government departments will be responsible for receipt and clearance of emergency supplies? If the government is unable to function and paralysed, what other arrangements can be made? (2) Check status of existing clearing, warehousing and heavy-goods transport contracts. If none are in place, initiate action to set them up. (3) Check the availability of warehousing in key areas of operation like Naguran,

Chagong and Conila. What is available in the projected programme area, at the port and near major transport routes? It is important to be taking action early. If Betaland government is incapacitated, and SCILAID undertakes in-country logistics, contracting quickly for warehousing and transport is very important. If the hurricane strikes in a large scale, the more organizations would be involved, and the higher the pressure on transport and warehousing. Prices are likely to go up dramatically and quickly. Having too much space and capacity early on is better and cheaper than having too little later. (4) Check with other UN agencies and humanitarian organizations in the region to see whether a joint approach to the market is possible. It keeps prices down. A joint approach should also be made as early as possible, before agencies go their own way. It is critical to ascertain the capacity of other UN agencies, such as the UNFA, to support in-country logistics in situations where SCILAID capacity and expertise are limited. There are two major phases in mitigating the effects of hurricane disaster. They are (1) Preparedness phase and (2) Emergency Relief phase. [1] Preparedness Phase Supply Planning According to our local context in Betaland , the government itself has not much capacities to prepare and setting up and maintaining such national disaster mitigation and response programmes effectively. In this regard, SCILaid along with other similar humanitarian organisations should develop procedures and working practices that they can then use when this hurricane disaster occurs. In this planning for preparedness, such agenda as assessment procedures, procurement procedures and procedures for setting up temporary warehouses must be included. In terms of human resources, these organizations should be ready to recruit and train emergency staff in the organisations procedures so that they are ready to start working effectively and efficiently as soon as the organisation responds to a disaster. SCILaid and other organisations must also put in practice the Areas mapping for Betaland that are likely to require aid, these maps will provide details on infrastructure, i.e. roads, ports, communication. As part of preparedness, our humanitarian aids organizations should hold stocks of certain goods such as tent and tarpaulin sheets, ropes, essential drug kits, family kits and child protection kits, water containers and jerry cans that they know will be needed in a situation of first few days/weeks of a disaster. In terms of Stock Piling for preparedness phase, it is highly discouraged in-country stockpiling of perishable items. If no emergency occurs, unused items may become unusable. To avoid wastage, buffer stocks must form part of regular programme demand. Another option is that we should establish standby agreements with local suppliers for emergency items such as jerry cans, blankets, plastic buckets, cooking utensils and plastic mats items that are relatively common and bulky.

Being well-prepared, the organizations can respond quickly the disaster situation and then concentrate their efforts on identifying and procuring goods that will be needed after the first few days/weeks of the disaster. [2] Emergency Phase Procurement of Goods In emergencies, SCILAID uses three approaches simultaneously: 1. Supply hubs, 2. a global procurement network and 3. long-term agreements. Supply hubs are strategic stocks and delivery points in the Global market like Bobany in Homeland, telukarta in Foxland, and Kirikara in Epsilonland. Each supply hub should hold emergency stocks for 100,000 people at least. Items held at the hubs include bulky and emergency items, such as blankets, cooking sets, tarpaulins, jerry cans and insecticide-treated mosquito nets. The global procurement network is a group of SCILaid country offices that can assist SCILaid Betaland in procuring and dispatching items at short notice. Long-term agreements allow standard items to be ordered directly through certain suppliers and stipulate a minimum level of stock availability in case of emergency requirement in Betaland . Preparedness and contingency stocks SCILAID country office should have a contingency plan set up for emergencies. To be prepared Assess potential needs. Identify best sources and methods of procurement. List shipping and distribution options. List reputable local and regional suppliers and service providers, items required and stock capacity. Update information on reputable transport and distribution services, routes and capacities. Create an emergency task force and back-up team led by the head of office to be on standby at all times to assess the stock situation Identifying sources of supplies After identifying priority needs through the rough initial assessment and subsequent rapid assessment, it is necessary to identify sources of supplies as soon as possible. Important things to do Look at existing stocks from the regular country programme that could be diverted to respond to the emergency. The representative or senior programme officer must approve any diversion of the stock in consultation with the Programme Funding Office. Contact partner agencies, non-governmental organizations (NGOs) and government counterparts to identify existing stock and determine whether

it is possible to borrow from it. This avoids unnecessary duplication of effort and prevents depletion of supplies from local sources. Call neighbouring SCILAID offices to find out if stocks there can be used. Look at locally available supplies and begin local procurement if necessary.

Some Tips to consider An emergency logistics plan should be set up in coordination with other UN agencies and NGOs outlining the role of each participant. It should address all aspects of supply management, from procurement to distribution. Offshore procurement Offshore procurement means importing supplies which are not available locally. During emergencies, it should be considered only when non-standard products of suitable quality and sufficient quantity are not available on the local market. Offshore procurement of non-standard items will cause delays. In addition, the following products need to be quality-assured and can only be procured from the authorized dealers in the market;

Human vaccines Antitoxins/globulins Anti-venom Tuberculin/sensitins Auto-disable syringes Safety boxes Pharmaceuticals Micronutrients Therapeutic foods with high mineral and vitamin content, e.g., F-75 and F-100
milk High-protein biscuits HIV diagnostics Hepatitis B diagnostics Hepatitis C diagnostics

Local procurement: Some Tips for Choosing a supplier If additional suppliers are needed at the time of emergency, consider the following benchmarking points to choose local suppliers and service providers: How long has the supplier done business? How much business does the supplier do? Have other humanitarian organizations used this supplier? Is the supplier registered with the Betaland government? Who owns the supplier? Who are the major shareholders? Is the supplier a trader, importer or manufacturer? SCILAID prefers dealing with manufacturers. Where is the supplier located? Does this location have cost implications in terms of transport? What items is SCILAID planning to procure? How will they be packed? Will SCILAID need to do anything special in terms of transport arrangements? How did SCILAID find out about the supplier, and how was the supplier initially approached?

Bidding in emergencies Competitive bidding is the preferred route for all purchases. In emergencies, however, it can be waived by the General Director in Homeland or, depending on where the purchase occurs, by other officials. In the case of local procurement, competitive bidding can be waived by the Head of Country. Some Tips to consider Special service agreements follow a process similar to that of purchase orders. However, instead of being raised by the authorized supply officer, they are raised via the human resources or operations officer. These agreements are subject to the same process as purchase orders in that prospective institutions and consultants need to be found using principles of competitiveness and transparency. Contracts are subject to review by the Contracts Review Committee and to other financial thresholds. Payment conditions must be clearly indicated in the contract. Conditions of payment include: on delivery (usually used in procurement of goods); by performance milestone (usually used in turnkey and lump sum contracts); through progress payments (usually where payment is made periodically against exact performance); and advance payment (on signature of contract in advance of work). Payment in advance should be made only in exceptional circumstances and requires the approval of the comptroller in New York headquarters.

Warehousing: An overview Important things to do Two most important points are (1) identifying some suitable space in an appropriate location and (2) putting in place a basic management system for the space for disaster situation. Some Tips to consider Storage requirements are closely linked to transportation and these must be considered together in planning. Storage requirements will depend on the following: Type of supplies and materials to be stored. Type of storage facilities and services needed. Average time for which supplies are to be stored. Speed and pattern in which supplies will move in and out. Fluctuation of supply and distribution. Existing transport infrastructure. Type and foreseeable length of the emergency operation. Opportunity to share premises with other UN agencies. Identifying a suitable warehouse Selecting a warehouse space requires an accurate estimate of the size required and an evaluation of criteria that include: Site access and security. Electricity and water supply. Usable storage area. Maximum floor loading.

Ancillary facilities (offices, cold rooms, etc.). Fire protection. Available handling equipment.
Some Tips to consider ~Ensure that conditions are suited to the supplies stored. ~The country office carries responsibility for losses that occur while commodities are in SCILAID-operated warehouses. ~Incoming emergency supplies should be stored in safe and secure conditions. ~Drawing on local knowledge, warehouse managers should select warehousing that is secure from natural disaster, animals and theft. ~Always ensure that proper storage and accounting procedures are implemented. ~Warehouse space should be obtained free of charge whenever possible. Managing a warehouse Where the country office establishes its own warehouse(s), a standard management system should be put in place to cover inventory control, monitoring, reporting and storage facilities. A warehouse can be managed electronically with the help of an inventory software programme or manually with the help of stock cards. It is essential that management and handling are properly documented. Some Tips to consider ~Ensure that stock is stored so that it is safe and easily retrieved for distribution. ~For assistance and guidance on all storage safety and warehouse management systems, contact the chief, Warehouse and Logistics Centre, Supply Division in Homeland. ~Store high-value items securely. ~Proper management and supervision of handling personnel is essential to prevent petty theft and pilfering or unintentional loss or damage to goods. Transport: An overview When a hurricane strikes Betaland and generates the emergency situations, what likely to happen is that the reliability of inland transport may be affected by poor physical infrastructure, unstable security conditions and the lack of fuel or spare parts. That will severely affect the major means of in-country transportation. Important factors to think about In this scenario, we should take into account the following important factors and action points: Estimated travel times and deadlines. The terrain between port of entry (or the origin of supplies) and destination. Expected weather conditions during transportation. Weight/volume ratio of supplies: For example, are they light and bulky or heavy and small? Quantity and packaging of supplies. Frequency of deliveries. Available transport options. The prospect of combining transport to as many locations as possible. The transport capacities of other UN agencies, NGOs and government entities, and the prospects of using existing transport services on a cost-sharing basis.

Local availability of fuel and spare parts.

Methods of transportation When selecting transport modes, some major areas to consider are the volume of supplies that can be transported, the speed of transportation and the cost that are all interrelated. Each should be considered as Road transport If the hurricane disaster happen in Betaland, SCILAID should frequently utilizes road transport. In that case, our Country office should have up-to-date information on road infrastructure, including distances and road conditions at different times of year and under different circumstances. Air Transport Air transport is faster than other means of transportation but it is costly and there are so many restrictions and limitations for this mode of transportation. But some fragile and expensive items if they are not very bulky should be transported by air. It can send the supplies to the very remote areas like hilly regions. Waterway Transport This mode of transport is good for heavy and sturdy items transportation, but the problem of this mode of transport is that it take more time than other means of transportation despite its low cost. So we should not use this means of transport for the emergency situation except sending some preposition materials ahead of the disaster happening. Security in Transportation Applying basic, standardized security measures can guarantee that the goods will arrive at their destination safely. Some Tips to consider Vehicles should never be loaded beyond their capacity and, in difficult terrain, should carry less than the maximum load. In an open vehicle, the load must be secured under plastic or canvas. When carrying items that are longer than the vehicles tray, the protruding segment should be marked with a red handkerchief or flag that can be seen clearly by other drivers. Planning Ahead for transportation Even for an emergency situation, a good planning for transportation will help us a lot for in country distribution. In this regard, when planning transportation, be aware of the following important points: 1. Weight restrictions on roads and bridges; routes that are impassable at certain times of the year; routes that may have been closed or destroyed. 2. The capacity of available rail links and the time delays usually involved. 3. The possibility of water transport at different times of the year, including depth restrictions. 4. Fuel depots, stock availability, type of fuel and fuel dispensing equipment. 5. The possibility of using helicopters belonging to the government, other UN agencies and NGOs. Maintaining Good Flow of Information

As far as we know, the good flow of information is the very key to successful supply chain in any situation. Even in a hurricane disaster situation, we need to keep and maintain our information flow steady and continuous. The following important points are to be done to maintain the good flow of information: Maintain the communications tools such as VHF Radio handsets and telephone in a good and workable condition Maintain and follow a schedule of communication between refugee camps, field offices and Head Office Establish a report-back system and check it to be followed thoroughly Use government channels and express mail facility if they are feasible Use UN agencies mail pouch services whenever available

Best Regards, Aung Kyaw Moe Logistics Officer Sub-Office (SCILaid Betaland)

SUPPLY AND LOGISTICS