Abstract

Humanitarian supply chains are complex and dynamic systems as they operate in uncertainty and involve many different stakeholders. In times of growing needs, scarce resources and major shocks such as the COVID-19 pandemic, humanitarian organizations are under immense pressure to find new and different ways of working. This particularly applies to the way organizations manage their supply chains. There is a widely spread assumption, that the supply chain is the most costly component in a relief response and that supply chain preparedness investments have a positive impact on the response operation. However, in reality, little empirical evidence exists on the actual supply chain cost structures of humanitarian organizations. Furthermore, there is a lack of fact-based knowledge on the impact of preparedness investments. To address those gaps we conducted the very first documentation and analysis of supply chain costs in the humanitarian context. Ultimately, the findings re-confirm that a small saving percentage of supply chain expenses will free up large amounts of funds to help more people in need. In a second step, we focused on how the performance of humanitarian operations can be enhanced by investing in supply chain preparedness. Based on four extensive case studies and existing literature, we developed a system dynamics model that reflects the operational reality of humanitarian organizations in the form of their centralized, hybrid and decentralized settings. The model provides an integrated supply chain view and measures the operational performance in regards to response cost, delivery lead time and local social impact. Furthermore, we studied the impact of preparedness investments to enhance operational excellence in the supply chain and deliver more humanitarian assistance with the limited resources available. Finally, we used our model to run a resilience analysis on the impact of major shocks to assess the vulnerability of humanitarian supply chains. We find that preparedness investments can significantly improve operational performance across all settings under study but have only limited potential to protect supply chains from major disruptions.