Distribution Network Designs in Relief Chain Management: Government’s response to Kosi Floods.
Importance of Relief Chain Management in Disaster Response
86. To evaluate the efficiency of these mechanisms with respect to its outreach to flood affected people.
87. To review and analyse the strengths and weaknesses of the adopted distribution network design for relief management with reference to strategic locations of the relief camps, during the first month of the kosi floods in 2008.
88.
89. For this objective, field data collection was guided by following questions:-
90. Was logistics given enough priority or significance during the flood response? If not:-
93. How many people could be reached by these responders for evacuation?
94. How many people could not be reached by the government responders for evacuation?
95.
96. All the research questions listed above (under subsection 1) helped in analysis of the strategies with which the LSPs handled the distribution of the relief goods at various places in Madhepura. The situation that existed during the Kosi response were then reviewed and evaluated with reference to the existing distribution network designs.
97. To suggest ways of improving disaster logistics at district level in Bihar.
98.
99.
100. As stated earlier, due to destruction of REO road at Maujma and creation of a new river at Rampur Lahi during the flood, such situations were created that provided a good base for a study pertaining to disaster and logistics.
101.
102. On the basis of severity of affected areas. This was further sub classified into:-
105. Area with no access to safe route neither safe location.
106.
107. Ward no 03, 04, 05 and 06 – Moderately affected areas with access to safe route. ( exception – some parts of ward no 05 and 06 had limited access to safer route) Shown with red boundary
108. Ward no 07, 08 and 09 – Moderately affected areas with limited access to safe route but with access to safe location. Shown with blue boundary
109.
110. Most of the areas in these wards lay between the MVC canal and the Bariyahi Dhar. Which is the new river, that was created in the floods. This river intersects the village into approximately two equal halves and it has a north south gradient. This region had three strongly built pukka houses which were used as a safer temporary shelter. These houses were
130. Delivery Flexibility (time to respond to disasters): Beamon (2008) defines delivery flexibility as the minimum response time, which is the elapsed time between the onset of disaster and the arrival time of the organisation’s first supplies to the disaster’s site.
134. Product Availability: Product availability is probability of having a product in stock when the demand arises. Due to, disasters being extremely random and uncertain events, to maintain the product availability for the affected area and population is rather challenging (as location, type and volume is uncertain), It requires a great deal of preparedness and planning.
135. The repercussions of not having the product availability can be huge. As procuring and arranging all the goods after a disaster has struck, would lead to increase in the response time which might result in increase of losses of life and property.
136. Product Variety: Product Variety is different number of products that a distribution network offers. In response to a disaster, a variety of products are required to be supplied in the affected area. This could range from ready to eat foods, bottled water, a variety of medicines, hygiene kits, tents, blankets, clothing etc. Group discussions conducted in Rampur Lahi, Madhepura revealed that Post Kosi flood, people taking rescue on MVC embankment survived on Khichdi (dal and rice cooked together) which was served once a day, for a month.
137. Customer Experience: Beamon (2008) states that aid recipient does not have the luxury of market choice for supply. Thus, the aid recipient operates in an unregulated monopoly, where the stakes associated with supplies are often life or death. Hilhorst (2002) have raised the concern that as there is no formal contract between NGOs and recipients may not have effective mechanisms for representation and often lack recourse to appeal, if their expectations are not met. All this, however, does not mean that customer experience is not important or does not have a significant part to play in success of a relief chain. A section ahead, deals with a case study which shows that how people’s refusal to accept bad relief goods have resulted in clogging of warehouses, railway godowns etc. Allthough, most of the relief goods are distributed for free, dignity of the beneficiaries should not be hurt at any cost. It is essential to ensure the beneficiaries’ satisfaction while distributing the goods to them.
138. Returnability: Returnability of relief goods which were dispatched with intentions of free distribution, would mean additional costs involved. In cases of NGOs returnability, which signifies failure of projects, might also have a negative impact on its functions in future projects as well. NGOs, which have two major bottom lines: mission effectiveness and financial sustainability (Moore, 2000; Lindenberg and Bryant 2001, p 218) would rather prefer to dump these goods on site rather than to return it to the source. Its repercussions could be clogging of the relief chain facilities, which would mean additional pressure on it.
161. Facilities and Handling: The design allows a supply chain to save on the fixed cost of facilities. This is because, all the inventories are centralized at the manufacturer’s end. Manufacturer also saves on additional warehouses as aggregation of inventories at Manufacturer’s end eliminates the need of additional warehousing space.
162. As the retailer is eliminated from the product flow, some costs on handling is also saved. However if a manufacturer is incapable to develop single unit delivery, it can have significant negative impact on handling cost and response time.
163. Product Variety: The design allows a manufacturer to maintain a high level of product variety to its customer. Drop shipping model allows a customer to choose from any of the products, a manufacturer produces, as all of these products are aggregated at manufacturer’s end.
164. Product Availability: Retailers does not hold any inventory. All the products are aggregated and stocked at manufacturer’s end. This allows a manufacturer to maintain a high level of available product
165.
166. Information: A retailer forms an important link, between the manufacturer and customer. As the retailer does not hold any inventory, a strong information mechanism is required to disseminate correct information about the product availability to the customers and demands to the manufacturer.
167. Response Time: Due to the increased outbound distances, response time is usually high.
168. Order Visibility: It is very important and at the same time very difficult to ensure order visibility. Order tracking is difficult as requires complete integration of information system at both the retailer and the manufacturer.
172. Transportation: Transportation cost is less than the cost involved in manufacturer storage designs. Intermediate warehouse decreases the outbound distance. Although, inbound distance is increased, more economic mode of transportation can be employed for inbound shipments. Hence the overall transportation cost goes down.
173.
174. Customer Experience: The design allows achieving better customer satisfaction as it facilitates single delivery in less response time.
175. Order Visibility: As a single shipment reaches the customer from the warehouse, involving one stage of the supply chain, the design offers better order visibility.
176.
177. Facilities and Handling: Facilities and Handling cost is also high as compared to the manufacturer designs as this design prevents aggregation of products at one place.
180. This network requires higher response time. However, if a product is stored at pick up sites response time is substantially reduced. Transportation cost is usually lower as more economic mode for transport can be selected for the inbound distance (Manufacturer to the pickup sites). The network requires heavy investment in the infrastructure for information which is necessary not only to aggregate demand, but also to maintain order visibility.
181. Retail storage with customer pickupInventory is stored locally at retail stored locally at retail stores. Customers place their order and collect it from the store itself. Product is delivered almost immediately. Mainataining product availability requires heavy expenses and product variety is also least as compared to all the other designs discussed earlier.<br />Analysis<br />Dynamics of a disaster is such, that it would be illogical to use any of these distribution network designs in its totality. These designs have been framed for commercial supply chain which has significant differences when compared to the relief chain. Adoption of any of these designs for a relief chain is neither recommended nor desired. Infact, arriving at a distribution network design for a disaster response is a herculean task, as there are so many uncertainities in terms of magnitude, location, type etc. No two disaster will be same in its characteristic. Hence applicability of designing a distribution network prior to disaster will always be questioned. But one thing that goes strongly in favor of it is that a distribution network design for a disaster prone area which is constructed after extensive planning enhances the preparedness level manifolds. This is crucial for an effective disaster response. The analysis of these designs is done with a purpose to study those aspects which would hold significant merit if incorporated in any distribution network designed for a humanitarian relief chain.<br />While analyzing the applicability of drop shipping model in a disaster situation, a crucial point which emerges, is that the outbound distance is large. As a result, the model performs low in response time. As discussed earlier, response time is of extreme importance in a relief chain. Thus, the model apparently seems to be inapplicable in a disaster situation, however, not in every case. Unlike a supply chain, donors in a relief chain can be located at any distance from the site of the disaster. Infact, during the critical phase of a disaster, the greatest help comes from the local community, from and around the affected area. This pattern is seen in more or less every disasters as logically, considering the time and distance, local responders are also the first responders during the critical phase. List of NGOs that were involved disaster response in the first months during the 2008 Kosi flood and later the 2010 Leh flashflood as shown in the appendix, substantiates the fact. <br />Evaluating the model in a critical time period and for donors at shorter outbound distance from the beneficiaries/affected area, might yield interesting outputs. In the critical time period when outside help has not arrived, donors from within and around the affected area play a key role in relief work. This model can be applied successfully for this small group of donors and for a small period of the critical phase of the disaster. The diagrammatic representation is given below:-<br /> Fig 13 Distribution Network Design in Humaniatrian Logistics for local Donors<br />Due to shorter outbound distance, Response time is low. Coordinating agency plays a key role in information flow between the beneficiaries and the donors. The coordinating agency also plays an important regulation which ensures distribution as per the needs of the community and capacity of the donors. Product availability might suffice basic needs of the community for a very short period of time. That depends on the size of beneficiaries, level of disaster and help that is generated by the local donors. However, the model can ensure equitable distribution of aid generated by the local donors, through an effective coordinating agency. The model can be applied only to a small fraction of donors and in a critical phase only.<br />The Manufacturer storage with direct shipping and In-transit merge, is an improvement of direct shipping. The concept of In-transit merge can be useful in a disaster relief chain. Disaster creates sudden demand for numerous products, like, ready to eat food, bottled water, medicines, Utensils, tarpaulin, blankets, bedding, soaps, sanitary napkins etc. Various organisations prepare their relief kit and distribute it in the affected region. Most of the time, the relief kit contain several common products. As a result there is a large number of aid duplication in the time of delivery.<br />In 2010, Leh flashflood, more than 50 organisations came with their aid in the first month after the disaster. 16 organisations, distributed, blankets in leh town. Other severely affected regions like Ney, Lehdho, Skindyang, Khaltsi, and Wanla were not covered at all, even by a single organisation. As a result, in some parts, families received more than 05-06 blankets, whereas, in other parts fa