A Tidal Wave of Problems

By Larry Dignan  |  Posted 2005-01-17 Email Print this article Print
 
 
 
 
 
 
 

Getting supplies to the tsunami victims is a challenge for relief agencies' supply chains when cows are blocking the landing strip and roads don't exist.

United Parcel Service can't land its 747s and 757s near the Indonesia and Sri Lanka tsunami disaster areas because its planes are too large for the runways. Gifts In Kind International coordinates aid requests from charities in an Excel spreadsheet. UNICEF had jets up in the air with supplies within 24 hours of the first reports of the devastation along coastal regions, but was hampered by a lack of roads leading to the most affected areas.

Welcome to supply chain planning on the fly. The information systems underpinning shipments of food, water and plastic sheeting consist of lots of paperwork, locals able to navigate rough terrain as well as customs agents, phone calls and word of mouth. Getting supplies anywhere is an accomplishment.

"A lack of logistics capacity continues to constrain relief efforts," the U.S. Agency for International Development said in a Jan. 5 report.

By that time, the Dec. 26 tsunamis that hit coastal areas in Sri Lanka, Indonesia, Malaysia, India and Thailand had claimed more than 150,000 lives. But logistics, or the lack of them, means it could take three days or more for supplies to reach Bandeh Aceh, Indonesia, a remote tourist area more than 1,100 miles northwest of Jakarta.

"We'd like to think we could just FedEx supplies somewhere, but how do you do that when there are cows on the landing strip and there's no infrastructure to speak of?" says Jeff Towers, vice president for marketing and development for UNICEF. "Given the challenges, three days ain't bad."

Here are vignettes from three cogs in the relief supply chain.

UNICEF

In the initial stages of the disaster, UNICEF mobilized its distribution warehouse in Copenhagen. The warehouse stores the goods needed in most global hot spots: water, medicine, chlorination tablets, tents, blankets and protein biscuits for malnourished children.

"We manage that inventory and ship it out promptly because those items are needed in every disaster," Towers says. "Other necessary goods are acquired locally."

According to Andre Spatz, the agency's chief information officer, the supplies are bar coded when they arrive at the warehouse to account for location, type of goods and expiration dates; these factors dictate the order in which shipments are picked and packed. UNICEF uses SAP's R/3 resource planning program to keep track of inventory and manage the distribution center.

With its information systems, Spatz said in an e-mail interview that UNICEF can automatically replenish inventory and track supplies to the destination country. Once the supplies reach the destination point, the agency's local offices forward goods.

Data on shipments to tsunami relief zones is then compiled into SAP to spit out forecasts for future demand. If there's a comparable tsunami in the future, the agency will know how much to send based on previous shipments to relief areas. For now, planning how much supply to send is based on demand from the field. For instance, there are no electronic ties for a UNICEF official on the ground to procure goods directly from the supply chain. Requests for supplies are largely handled via phone.

Gifts In Kind International

The charity, which funnels corporate product donations to relief groups, is on the front lines of coordinating donations. Its partner charities-Save the Children Federation and Catholic Charities USA, to name a few-are at ground zero of the tsunami devastation.

CEO Susan Corrigan's first mission was to collect information from the partner charities on location. Gifts In Kind then had the information it needed to distribute donations from the likes of Avon, Gillette and Unilever to nonprofits in Sri Lanka and Indonesia. The challenge for Gifts In Kind was speed. For example, the charity had weeks to line up donations for the Florida hurricane relief effort last year. The tsunami was a total surprise.

The information system of choice for Gifts In Kind? An Excel spreadsheet. Gathering the information is largely a manual exercise. Using its list of nonprofit partners, Gifts In Kind queried charities via e-mail and phone to determine which groups were at the disaster site. Once that list was compiled, surveys were distributed via e-mail and fax to get a need assessment. Corrigan's staffers and volunteers also took phone calls from charities in the affected geographies.

From there, donations and relief groups were matched. Water and medicine were given first priority, according to Corrigan. Personal-care products, like those provided by Gillette and Avon, will go out in a second wave of flights. "Early on, you only want to send what they need," Corrigan says.

While Corrigan acknowledges Excel isn't the most advanced technology, it serves her organization's needs at least for early coordination efforts. As she puts it: "That's our database."

UPS

UPS is Gifts In Kind's overseas shipping partner. Gifts In Kind sorts out what's needed, whether it be water, medical supplies or shampoo, and manually inputs data from its spreadsheet to a private-label Web site operated by UPS so the logistics giant can deliver it.

For UPS, the focus sounds almost sounds counterintuitive-concentrate on what not to take first.

Weeding out donations is everything in the early relief effort, says John Flick, director of public relations for UPS International. "We won't handle anything we can't get directly to the regions affected," Flick says, adding that UPS has refused to ship heavy clothing (conditions in Sri Lanka are tropical) and laptops (no electricity).

Bottom line: If a shipment doesn't include a desalination machine, water, body bags, tents and blankets, it isn't going to be picked up.

The tsunami effort has shown the limits of UPS' global network, bar-code scanning at multiple locations and real-time information tracking. When there's little infrastructure such as roads and electricity, technology only goes so far.

Why can't goods get to tsunami-hit areas overnight? UPS' planes are too large for local airports, local customs agents aren't hooked into the UPS network, and the company has had to look for other means of transportation to deliver shipments to the hardest-hit areas.

Instead of landing in Jakarta or Colombo (the capital of Sri Lanka), UPS has had to fly goods to Hong Kong, Seoul and Singapore, a United Nations staging area. "Our planes are either too large for the airports, or we'd send planes and never get them out of there," Flick points out.

UPS' systems provide enough information for the company to divert planes to the best locations, but once they land, systems lose visibility. To get goods from its hub airports to ones in Indonesia and Sri Lanka, it has to charter planes from local companies or consider ocean shipping, which takes longer but may be more reliable for locations such as Bandeh Aceh. Deliveries aren't scanned beyond that handoff.

Another issue: customs documentation. UPS has the ability to send customs information on shipments electronically or via fax with a host of Asian governments, but not governments reeling from the tsunami. And if UPS charters flights with outside companies to deliver goods, it often means handing over paperwork.

Once a shipment makes it to the local airports, there are a bevy of difficulties in the last mile. Roads are destroyed, fuel is tight in Indonesia for trucks, and local government officials are ill equipped to handle big logistics projects. UPS has donated $3 million for in-kind services and engineers to help relief organizations build some kind of workable supply chain.

"Let's face it. The best supply chains are planned," Flick says. "Have our information systems helped? Yes. Have we lost visibility going the last mile? Yes. At this point, though, it's not about tracking whether a shipment is on time. It's about whether it gets there at all."



 
 
 
 
Business Editor
ldignan@ziffdavisenterprise.com
Larry formerly served as the East Coast news editor and Finance Editor at CNET News.com. Prior to that, he was editor of Ziff Davis Inter@ctive Investor, which was, according to Barron's, a Top-10 financial site in the late 1990s. Larry has covered the technology and financial services industry since 1995, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism.
 
 
 
 
 
 

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