Coordinating the Relief Chain in the Chinese Context

Abstract

In the past decade, there has been an increasing number of natural disasters that led to catastrophic damage to mankind. China is one of the countries most affected by natural disasters in the world. Although logistics activities account for a large percentage of total operations in aftermath relief, they have frequently not been recognized as key levers for improving the effectiveness and efficiency of humanitarian organizations and as being crucial to operational excellence. Meanwhile, due to the large number of relief actors involved in the Chinese context, the coordination among various players becomes a very prominent challenge to cope with. Therefore, this master study aims to explore how to improve the coordination among actors in the Chinese relief chain context. This research consists of theoretical and empirical parts. In the theoretical party, this thesis explores the prospects of transferring lessons learnt from the commercial supply chain to the relief chain by finding out the existing coordination mechanisms in the commercial logistics operations. Some coordination mechanisms- i.e. Joint Procurement, Quick Response, Continuous Replenishment Program, Vendor Managed Inventory, Joint Managed Inventory, Continuous Planning, Forecasting and Replenishment and 3rd party logistics are the practiced coordination mechanisms in procurement, inventory and transportation processes together with corresponding characteristics and requirements to adopt them. Besides specific coordination mechanisms, generic lessons learnt from the commercial supply chain are also abstracted. They are Resource Sharing, Joint Decision Making and Outsourcing, which can be performed on strategic, tactical or operational levels based on the orientations of relationships among coordinating alliance. These experiences from the commercial supply chain come as a foreground for relief actors to step on. Although the objective of the relief chain and commercial supply chain remains the same i.e. delivering right amount of materials to the right places, some factors existing after major disasters distinguish the relief chain from the commercial supply chain fundamentally. These factors are 1) Urgency 2) Uncertainty 3) Complexity of operation conditions 4) Co-existence of various actors. Due to the existence of these challenging factors in disaster aftermath, the current practicing coordination mechanisms in the commercial supply chain can’t be transferred directly into the relief chain. As the application level for these coordination mechanisms are evaluated respectively in this thesis, it turns out Joint Procurement, Quick Response and 3rd party logistics are those promising mechanisms with a high level of application prospect in the relief chain. Meanwhile, the generic lessons from the commercial supply chain still hold in the relief chain and especially when they are put in practice operationally or tactically among organizations. The theoretical study provides the research a direction to further explore the reality. The Wenchuan earthquake case study is conducted to test the prospects of these coordination methods in Chinese context. Through this case study, all the specific promising coordination mechanisms are found with some changes adapted to specific situations. Some coordination initiatives that reflect the generic approaches (Resource Sharing) in commercial chain are also discovered i.e. demand information sharing and inventory capacity sharing. Meanwhile, some new coordination initiatives are invented uniquely by relief actors. They are coordination to have a complementary supply effect and coordination for the sake of legal operation. In order to better involve actors in the relief chain, the following recommendations are offered to humanitarian organizations during the preparation phase 1) Non-governmental can be incorporated into existing relief system to achieve an overall complemented effect to governmental relief 2) Build up sustainable relations with suppliers on emergency supply 3) NGOs Identify strategic alliance before emergency. During response phase, it is advisable for NGOs to 1) Spot their position in less attention areas to avoid media’s framing effect 2) Coordination by standing by when information is unclear.