Global Supply Chain and Logistics Strategies for Mitigating Adverse Effects of Natural Disasters - Coursework Example

Global Supply Chain and Logistics Strategies for Mitigating Adverse Effects of Natural Disasters Name Course Institution Lecturer Date Introduction Disaster management chain comprises of four phases including mitigation, preparedness, reaction and recovery. The mitigation phase entails the group of activities used to aid in reduction of a disaster’s impact. Preparedness operations make organizations and the community ready for a fast and effective response following the occurrence of a disaster. The aim of the reaction phase in humanitarian relief process is to quickly provide the affected people with relief, including water, food, shelter and medicine, in large scale in order to lessen death and human suffering. Recovery activities intend to restore the region that was affected by a disaster to its initial state. The effectiveness of the mitigation phase depends on the strategies that are put in place in relation to global logistics and supply chain (Ivgin 2013, p.1). This essay will discuss the various logistics and worldwide supply chain strategies that are required for mitigation of natural disasters’ adverse effects. Strategies for mitigating negative effects of natural disasters Ivgin (2013, p.2) maintains that, natural disasters are usually characterized by epicenter, occurrence time and effect. Thus, it is nearly impossible to ascertain the precise damage as well as relief requirements prior to the disaster. This makes planning of pre-disaster response difficult. However, the formulation and implementation of a number of strategies in relation to logistics and supply chain used to provide humanitarian relief after the occurrence of a natural calamity may help reduce the effects of such a calamity. Pre-positioning of necessary relief items According to Ivgin (2013, p.2), pre-positioning of essential items for relief, such as food, water, medicines, clothing and evacuation facilities, in strategic sites along with effective distribution of such items following a disaster can highly help in dealing with the situation. Decisions on relief facility location influence the performance level and relief activities’ efficiency. This is because; the locations and number of distribution points along with the stock level of relief items held in those points directly affect disaster response time and costs involved throughout the relief chain. Information on previous occurrence of disasters should be used to predict the likely timing and impact of natural disasters. Based on this prediction, relative amount of relief items should then be distributed to areas prone to such disasters. Retrofitting of transportation infrastructure and buildings Retrofitting of buildings as well as transportation infrastructure can aid in the mitigation of natural calamities’ adverse impacts. Retrofitting involves reinforcing the structures to a level that is highly resistant to natural disasters, such as earthquakes and flooding. The pre-disaster state of buildings highly determines the damage levels during a disaster, which in turn determine the needed quantity of relief items. Besides, the vulnerability of transportation infrastructure to a calamity like earthquake, will impact the network connectivity, which constitute the key determinant in effective supply of relief items to the affected regions. Consequently, retrofitting decisions made prior to a disaster to strengthen transportation networks and buildings are principally relevant to post-disaster response’s efficiency (Ivgin 2013, p.3). Accordingly, buildings located in regions that are susceptible to natural calamities, such as hurricanes and earthquakes should be constructed in such a way that they are able to withstand impact of such calamities. For instance, very tall buildings should be avoided in areas that are prone to earthquakes. This would help reduce the impact of calamities. Moreover, transportation networks connecting disaster-prone areas and the likely source of relief should be constructed or renovated to a status that is resilient to natural disasters (Ivgin 2013, p.3). Increased real-time supplies Chakravarty (2011, p.9) observes that, reducing the quantity of supplies to the site of disaster immediately after the time for repairing transportation infrastructure increases, results in an undesirable outcome in the supply chain. Reduction in supplies causes a number of the disaster victims to undergo transition from the category of “delayed supplies” to the category of “lost-life”. This leads to a trade-off amid people who die following the disaster and those who suffer due to delays in supply of relief items. Hence, real-time supplies should be increased in order to reduce the social cost that results from denial of resources to victims at the disaster area. Increased supply of relief items to people, who survive a disaster, will help reduce the number of fatalities due to the disaster by providing them with all the necessary requirements they need to stay alive, including food, water, blankets and medication. Temporary distribution facilities Drawing from Afshar and Haghani (2012, p.330), at the initial disaster response time, it is important to put up temporary distribution facilities to take, plan and transport the relief goods across the distribution system. In the formulation of mitigation plans for natural disasters, possible sites for the situation of the temporary facilities should be specified. Prior plans regarding the temporary facilities facilitate faster response and supply of relief items after the occurrence of a disaster. Additionally, in logistics coordination during disasters, such facilities ensure maximum coverage of the affected region and reduced delays in supply delivery activities. Nonetheless, the number of temporary facilities is usually limited due to personnel and equipment constraints. Management of limited transportation capacity Afshar and Haghani (2012, p.330) assert that, transportation capacities are usually limited during the initial hours or even days following a disaster. Thus, it is important to ensure the optimal use of any available fleet at all time. Shortages of vehicles are normal in emergency activities, thus mitigation models ought to include methods of monitoring any empty trucks so as to assign them new operations after every delivery. Different modes of transportation may be used to aid in emergency response logistics. Accordingly, coordination and collaboration amid transportation modes is crucial for effective management of response activities, as well as the provision of a seamless supply of relief items to the respective recipients. Inter-modal supply of items is anticipated to occur in certain facilities but, may experience some transfer delays and capacity constraints (Afshar & Haghani 2012, p.330). Wohlgemuth, Oloruntobaand Clausen (2012, p.269) further maintain that, scheduling and routing of vehicles in responding to natural disasters is very important. Several vehicles may be used to respond to large-scale calamities. The routings of every individual vehicle should be kept track of. It is also required to put in place a comprehensive schedule for picking up and delivering relief items by every vehicle in every transportation mode. Nevertheless, the routings of vehicles in disaster cases are somehow different from normal vehicle routings. They are not obliged to make a tour and go back to the initial depot; they can be assigned new routes as necessary. They should carry out varied collection and delivery of different items amid various points of the transportation network as demands and supplies arise. Fairness and equity among relief recipients It is important to consider fairness and equity among the recipients of aid. Depending on the victims’ geographical dispersion and resources availability over time as well as space, favouring the needs of a given group of recipients over another is easy. Although some differences are unavoidable, the ideal model is to allocate the aid items fairly and evenly among the disaster victims. Procedures and models with objective functions that are general are vulnerable to despise the level-of-service and equity requirements so as to achieve a better arithmetic solution. Therefore, it is crucial to have in place controls and procedures that hinder any form of discrimination amid disaster victims where possible (Afshar & Haghani 2012, p.330). Afshar and Haghani (2012, p.330) further observe that, the constraint of equity amid populations might be defined ultimately, and over relief items. It is inappropriate to fulfil all the needs of some victims on time, while other victims fail to get any relief until very late. Such delays may extend the impacts of disasters on those affected. The available aid commodities should be distributed fairly among all victims although they may be not adequate for everybody at the present situation. For instance, it is inappropriate to supply all the water that is available to a single group and supply all the food available to a different group. The limited transportation capacity resources and calamity relief commodities should be fairly shared. Use of integrated information systems According to Park, Hong and Roh (2013, p.82), natural disasters do not only interfere with supply chains, but succeeding problems may also severely impact the supply chains. The use of integrated information systems to communicate with other members within the supply chain enables faster information sharing. This in turn enables a firm to flexibly and quickly respond to disruptions caused by a disaster, hence reducing the level of adverse effects. For example, following the recent tsunami, nuclear disaster and earthquake in Japan, Sangyo was in a position to successfully manage the challenges posed by the disasters. This is because; it had previously been operating both local and international factories through integrated information systems, which synchronized coordination among the factories. Moreover, Zyuden, a large vehicle and generator manufacturer in Japan, established another manufacturing technology through the integration of information systems. Through such technology it was able to pick up its manufacturing process shortly as well as speed up recovery after the disasters (Park, Hong, & Roh 2013, p.82). Extension of international manufacturing network Drawing from Park, Hong and Roh (2013), extending a company’s manufacturing network to other regions or countries helps a company to enjoy different benefits that different markets have to offer, such as low costs of production and logistics and market proximity. Most importantly, such a strategy enables a company to disperse the likely risks in the supply chain among the various manufacturing units. For instance, after Japan was hit by the earthquake, Iryou, a manufacturer of medical devices spread its international manufacturing system to the US and Japan due to low logistics overhead and market proximity. It also extended its system to the Philippines to enjoy low costs of production. After the natural calamities hit Japan, the company increased its production abroad, hence distributed the possible risks in the supply chains across the three markets. Besides, Kenki, a Japanese construction equipment manufacturer focused on acquiring parts for commodity and routine products through global outsourcing. However, it placed its strategic preferences more on local suppliers of parts for immediate technological support and damage assistance to recover fast from the disasters (Park, Hong, & Roh 2013, p.32). Incorporation of uncertainty in the supply chain Uncertainty is rampant in supplying relief goods, which impedes the distribution of such goods. From a study carried by Torre, Dolinskaya and Smilowitz (2012, p.92), proper prioritization of goods is important. Sometimes, fast delivery of relief items is not delayed because of resource scarcity, but by the use of resources to supply wrong kinds of relief goods. Delays also result from disorganized warehouses, holding of relief goods at the port and difficulties in establishing means of transport to the country in need of aid. Supply chain uncertainties can also result from loss of relief items at various points within the supply chain. Moreover, demand for relief goods can fluctuate due to reasons, such as recipients moving to other regions with better relief, and disease outbreak owing to poor shelter at the affected area. In order to mitigate the impact level of disasters, all these uncertainties ought to be integrated in the supply chain models and logistics plans. This will be made possible because possible alternatives in case of a given uncertainty will be already in place for responding to the situation (Torre, Dolinskaya, & Smilowitz 2012, p.92). Maintenance of a reserve stock level Ozguven and Ozbay (2013, p.172) observe that, in planning for disasters, the most crucial issue is focussing on the maintenance of a reserve stock capacity as a safeguard for the critical supplies following a disaster. In the aftermath of Hurricane Katrina, the absence of an effective inventory control system for humanitarian relief led to major adverse effects on the victims. This is because; the victims’ survival needs were not met effectively in the shelters subsequent to the event. In Haiti, over 3 million individuals needed emergency supplies, while 350,000 people in Japan became homeless and lived in shelters after the two shattering earthquakes. The inefficient control and underutilization of desperately wanted resources may put the welfare and health of survivors of natural disasters at stake. Therefore, an inventory management model for humanitarian relief should be developed and analyzed before a natural catastrophe occurs. Such as a model will mitigate the effects of such a catastrophe by determining the level of safety stock that will check potential disruptions at the least cost. On-line response to disaster Determining safety stocks in advance only is not adequate for stochastic disaster situations. On top of being set for a catastrophe, on-line response at the time of disaster or recovery period after the disaster is crucial as well. This is due to the fact that, the preliminary planning strategy may not effectively capture stochastic actual situations. This may result from conditions, such as drastic change of survivors’ needs during the relief operations, and decline in supply level or increase in consumption leading to scarcity of resources for the production of new products. Failure of the preliminary planning strategy may also result from destroyed transportation systems, which may not be in a position to sustain emergency commodities’ flow to shelters. As a result, an inventory management model for responding to disasters should incorporate an on-line functional strategy to lessen effects of these unexpected disruptions, or even to immediately manage the situation at hand. Instantaneous management of disaster preparedness operations will show the real performance of mitigation, response and recovery processes following a disaster (Ozguven & Ozbay 2013). In order to have an effective emergency management structure, the off-line production and planning policies ought to be incorporated with an on-line strategy for inventory management. This will help in accounting for the anticipations of varying demand for essential supplies, such as water, medical supplies and food, and transportation network’s disruptions during catastrophe relief period (Ozguven & Ozbay 2013, p.172). Management of operational risk in maritime supply chain According to Yang (2011, p.392), management of risks involved in maritime supply chain involves making and implementing decisions for lessening negative impacts of accidental losses. Managing the risk relating to container security helps to store physical goods and property of service providers in the maritime supply channel in order to lessen the present as well as future exposure to risk. Shipping firms, forwarders, shipping agencies, customs brokers, and service providers of global logistics ought to formulate a matching system that is able to cross-check data that is entered during export activities. This would help avoid operational risks relating to data entry errors. Ensuring the entry of the correct data, especially in relation to the type of goods being shipped, may facilitate prevention of disasters as well as fast and appropriate response in time of disaster. For instance, in transporting high-risk goods, such as poisonous or flammable gases, having the correct information can help faster response in case of fire or leakage since data on precaution measures is likely to be included in the shipment documents. This would in turn reduce the level of damage resulting from such incidents (Yang 2011, p.392). Yang (2011, p.392) further says that, maritime staff education and training should also be reinforced so as to reduce the possibility of mistakes. This would facilitate appropriate handling of goods as well as timely and effective response to disasters during shipment or at ports, such as bomb blasts, fires, and sinking of vessels, all of which would mitigate the disasters’ adverse effects. Supply chain’s geographical dispersion A supply chain’s geographical dispersion is an important factor to consider in efforts to mitigate natural disasters’ adverse effects. Geographical dispersion encompasses geographical locations of suppliers, distributors, customers and production facilities. Long distances augment the probability of transport disruptions and may lessen flexibility situations involving great market instability. Organizations should ensure a fit amid its logistics, supply chain structure and integration capabilities (Trkman & McCormack 2009, p.253). This is supported by Fitrianto and Hadi (2012, p.430) who observes that, management of supply chain is critical in order to ensure profitability along with continuity in business operations. Hence, all entities involved in the supply chain ought to be integrated in order to sustain performance and to lessen the effects of risk. Integration would help avoid delays of supplies in case of a disaster. Suppliers of emergency goods, such as fire extinguishing equipment and services, food and water should be within a reasonable distance from the affected area. Single sourcing Trkman and McCormack (2009, p.253) argue that, the level of single sourcing significantly influences the risk level faced by a supply chain. Special attention ought to be given to suppliers who constitute a sole source of essential components or materials. A relatively undependable single-source supplier creates a greater risk compared to a case of multiple sourcing. Single sourcing should only be used with highly reliable suppliers. Otherwise, multiple suppliers for essential goods are recommended to avoid huge losses that may result from supplier’s failure to supply items during natural disasters, such as fires in plants or destruction of transportation or electricity networks in case of earthquakes or floods. Conclusion There are four phases in the disaster management chain namely mitigation, preparedness, reaction and recovery. Effective implementation of several logistics and global supply chain strategies can help mitigate the adverse effects associated with natural disasters. The first strategy relates to pre-positioning of necessary relief items in strategic sites accompanied by effective distribution of the items. Other strategies include, retrofitting transportation infrastructure and buildings to a highly resistant state, increasing real-time supplies of relief commodities, and putting up temporary distribution facilities for relief goods. Moreover, adverse effects resulting from natural disasters can be minimized through optimal use of the available transportation vehicles, equitable distribution of relief goods among recipients, use of integrated information systems and extension of international manufacturing network. Incorporation of uncertainty in the supply chain, maintenance of a reserve stock level, integration of on-line response to disaster, and correct data entry and staff education and training in maritime operations can also help mitigate the adverse effects. Lastly, natural disasters’ adverse effects can be mitigated by using suppliers from reasonable proximities and using single-sourcing only with very reliable suppliers. Reference List Afshar, A & Haghani, A 2012, Modeling integrated supply chain logistics in real-time large-scale disaster relief operations, Socio-Economic Planning Sciences, 46 (2012), 327-338. Chakravarty, AK 2011, A contingent plan for disaster response, International Journal of Production Economics, 134 (2011), 3-15. Fitrianto, AR & Hadi, S 2012, Supply Chain Risk Management in Shrimp Industry Before and During Mud Volcano Disaster: An Initial Concept, Procedia - Social and Behavioral Sciences, 65 (2012), 427 – 435. Ivgin, M 2013, The Decision‐Making Models for Relief Asset Management and Interaction With Disaster Mitigation, International Journal of Disaster Risk Reduction, 8 (5), 1-20. Ozguven, EE & Ozbay, K 2013, A secure and efficient inventory management system for disasters, Transportation Research Part C, 29 (2013), 171-196. Park, Y, Hong, P & Roh, JJ 2013, Supply chain lessons from the catastrophic natural disaster in Japan, Business Horizons, 56 (2013), 75-85. Torre, LE, Dolinskaya, IS & Smilowitz, KR 2012, Disaster relief routing: Integrating research and practice, Socio-Economic Planning Sciences, 46 (2012), 88-97. Trkman, P & McCormack, K 2009, Supply chain risk in turbulent environments—A conceptual model for managing supply chain network risk, International Journal of Production Economics, 119 (2009), 247–258. Wohlgemuth, S, Oloruntoba, R & Clausen, U 2012, Dynamic vehicle routing with anticipation in disaster relief, Socio-Economic Planning Sciences, 46 (2012), 261-271. Yang, YC 2011, Risk management of Taiwan’s maritime supply chain security, Safety Science, 49 (2011), 382–393. Read More