Lecture 1: Background and Introductionsupernet.isenberg.umass.edu/courses/SC-MGMT597LG-Spring16/20… · This course is based on primary source reading materials, including journal

Lecture 1: Background and Introduction

Professor Anna Nagurney

John F. Smith Memorial Professorand

Director – Virtual Center for SupernetworksIsenberg School of Management

University of MassachusettsAmherst, Massachusetts 01003

SCH-MGMT 597LGHumanitarian Logistics and Healthcare

Spring 2016c©Anna Nagurney 2016

Professor Anna Nagurney SCH-MGMT 597LG Humanitarian Logistics and Healthcare

Some Motivation Behind Offering This Course and

Course Goals

• The number of disasters is growing, as well as the number ofpeople affected by them.

• Logistics plays a central role in all phases of disastermanagement and supporting humanitarian operations.

• The fundamental task of a logistics system is to deliver theappropriate supplies, in quality condition, in the rightamounts, to the locations at the time that they areneeded.



Course Goals

However, due to the inherent nature of disasters, humanitarianlogistics is faced with unique challenges:

• the critical infrastructure, including the transportation andcommunication systems, may have been severely negativelyimpacted and their functionality compromised;

• there is a short time window in which to respond with thecritical needs products, which must be delivered in order toprevent loss of life and human suffering, and

• there may be great uncertainty due to the disruptions,among other complications.



Course Goals







Course Goals







Course Goals







Course Goals

This course covers the challenges and solutions associatedwith humanitarian logistics in emergency mitigation andpreparedness, disaster response, and recovery.

The course overviews similarities and differences betweencommercial supply chains and relief chains, introducesperformance metrics, and provides tools for the analysis anddesign of supply chains for humanitarian critical needsproducts, as well as for the coordination and teaming ofhumanitarian organizations.

It also covers such major issues as material convergence andearmarked financial funds for disasters.



Course Goals

This course is based on primary source reading materials,including journal articles, case studies, newspaper articles, andvideos.


Some Background – Definitions of Logistics

The word logistics comes from the Greek logistikos,which means “skilled in calculating,” and from medievalLatin, where logisticus means “of calculation.”

The Random House dictionary defines logistics as thebranch of military science and operations dealing withthe procurement, supply, and maintenance ofequipment, the movement of personnel, the provisionof facilities, and with related matters.



The US Department of Defense (2002) defined logistics as thescience of planning and carrying out the movement andmaintenance of forces ... those aspects of military operationsthat deal with the design and development, acquisition,storage, movement, distribution, maintenance, evacuation anddisposition of material.

There is an old military saying, which speaks volumes:

Armchair generals talk strategy. Real generals talklogistics.



To business, logistics is defined as the planning framework forthe management of material, information, financial, andservice flows and includes the increasingly complex material,informational, communication and control systems in today’sbusiness environment.


Complex Logistical Network


Supply Chains

In this course, we will use supply chains andlogistics interchangeably.


Supply Chains

According to Nagurney (2006): Supply chains are the criticalinfrastructure and backbones for the production,distribution, and consumption of goods as well as services inour globalized Network Economy.

Supply chains, in their most fundamental realization, consistof manufacturers and suppliers, distributors, retailers,and consumers at the demand markets.

Today, supply chains may span thousands of milesacross the globe, involve numerous suppliers, retailers,and consumers, and be underpinned by multimodaltransportation and telecommunication networks.


Supply Chains





Supply Chains





Examples of Commercial Supply Chains

I food and food products

I high tech products

I automotive

I energy (oil, electric power, etc.)

I clothing and toys


Supply Chains


Humanitarian and Healthcare Supply Chains

In this course, we will be focusing onhumanitarian and healthcare supply chains.


Humanitarian Relief Chains


Healthcare Supply Chains


Supply Chains

Supply chains may be characterized by decentralizeddecision-making associated with the different economicagents or by centralized decision-making.

Supply chains are, in fact, Complex Network Systems.

Hence, any formalism that seeks to model supply chainsand to provide quantifiable insights and measures mustbe a system-wide one and network-based.

Indeed, such crucial issues as the stability and resiliency ofsupply chains, as well as their adaptability and responsivenessto events in a global environment of increasing risk anduncertainty can only be rigorously examined from the view ofsupply chains as network systems.


Supply Chains






Supply Chains






Supply Chains






Multilevel Network Structure of the Supply Chain

Logistical Network

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A. Nagurney, K. Ke, J. Cruz, K. Hancock, and F. Southworth, 2002. Dynamics of supply chains: A multilevel

(logistical/informational/financial) network perspective, Environment and Planning B 29, 795-818.


Characteristics of Supply Chains Today

I large-scale nature and complexity of network topology;

I congestion, which leads to nonlinearities;

I alternative behavior of users of the networks, whichmay lead to paradoxical phenomena;

I possibly conflicting criteria associated withoptimization;

I interactions among the underlying networksthemselves, such as the Internet with electric powernetworks, financial networks, and transportation andlogistical networks;

I recognition of their fragility and vulnerability;

I policies surrounding them may have major impacts notonly economically, but also socially, politically, andsecurity-wise.


What is Humanitarian Logistics?

The Fritz Institute working with senior logisticians came upwith the following definition since there was a clear need: it isthe process of planning, implementing and controlling theefficient, cost-effective flow of and storage of goods andmaterials as well as related information, from point of origin topoint of consumption for the purpose of meeting the endbeneficiary’s requirements (Thomas and Mizushima (2005)).

For humanitarians, logistics consists of the processesand systems involved in mobilizing people, resources,skills and knowledge to help vulnerable people affectedby disaster (Van Wassenhove (2006)).



The Fritz Institute working with senior logisticians came upwith the following definition since there was a clear need: it isthe process of planning, implementing and controlling theefficient, cost-effective flow of and storage of goods andmaterials as well as related information, from point of origin topoint of consumption for the purpose of meeting the endbeneficiary’s requirements (Thomas and Mizushima (2005)).

For humanitarians, logistics consists of the processesand systems involved in mobilizing people, resources,skills and knowledge to help vulnerable people affectedby disaster (Van Wassenhove (2006)).



Disaster relief (and associated cost) is approximately80% logistics; hence, more transparent, efficient, andeffective logistics operations and supply chain management indisasters cannot only save lives but enables betterpreparedness for natural as well as man-made disasters.

Moreover, donors, who pledge millions in aid andgoods, see the impact of the aid.



Disaster relief (and associated cost) is approximately80% logistics; hence, more transparent, efficient, andeffective logistics operations and supply chain management indisasters cannot only save lives but enables betterpreparedness for natural as well as man-made disasters.

Moreover, donors, who pledge millions in aid andgoods, see the impact of the aid.


Humanitarian Sector Funding Flows

Source: A. Thomas and L. R. Kopczak, 2005. From logistics to supply chain management: The path forward inthe humanitarian sector, Fritz Institute. DAC report on the sector.


What is a Disaster?

As noted in the Fragile Networks: Identifying Vulnerabilitiesand Synergies in an Uncertain World book by Nagurney andQiang (2009): The Emergency Events Database (2008)defines a disaster as an event that fits at least one of thefollowing criteria:

1). 10 or more people killed;

2). 100 or more people affected;

3). results in a declaration of a state of emergency;

4). results in calls for international assistance.


What is a Disaster?







What is a Disaster?







What is a Disaster?







What is a Disaster?







What is a Disaster?

According to the Federal Emergency Management Agency(FEMA) (1992), a catastrophe disaster is an event that:

• results in large numbers of deaths and injuries;

• causes extensive damage or destruction of facilities thatprovide and sustain human needs; produces an overwhelmingdemand on state and local response resources andmechanisms;

• causes a severe long-term effect on general economicactivity;

• and severely affects state, local, and private-sectorcapabilities to begin and sustain response activities.


What is a Disaster?







What is a Disaster?







What is a Disaster?







What is a Disaster?







What is a Disaster?

From these definitions, we see that although disasters mayhave different meanings, depending on the specific domain,they have one thing in common: they have a catastrophiceffect on human lives and a region’s or even a nation’sresources.


Classification of Disasters

Classification of Disasters

L.N. Van Wassenhove, 2006. Blackett Memorial Lecture: Humanitarian aid logistics: supply chain management inhigh gear, Journal of the Operational Research Society 57, 475-489.


Examples of Recent Disasters

• The Indian Ocean earthquake and (Indonesian) tsunami onDecember 26, 2004 resulted in over 230,000 deaths in 14countries;

• Hurricane Katrina, August 23, 2005, with over 1,800 peopledying in the hurricane and subsequent floods;

• Cyclone Nargis hit Burma on May 2, 2008 and resulted inover 138,000 fatalities;

• The Sichuan earthquake on May 12, 2008 was reported tohave caused about 68,000 deaths;

• The Haiti earthquake that struck on January 12, 2010 withgovernment reporting over 300,000 deaths and the Chileanone on February 27, 2010 with over 500 losing their lives;

• The triple (earthquake/tsunami/nuclear) disaster in Japanon March 11, 2011 with a death toll over 18,000.










































The Triple Disaster in Japan on March 11, 2011

The world reeled from the aftereffects of the triple disaster inJapan with disruptions in the high tech, automotive, and evenfood industries with potential additional ramifications becauseof the radiation continuing to this day.


Superstorm Sandy

Superstorm Sandy struck the northeastern US and beyond onOctober 29, 2012. It killed at least 125 people in the UnitedStates, including 54 in Haiti. Sandy is being blamed for about$62 billion in damage and other losses in the US, the vastmajority in New York and New Jersey a number that couldincrease. It was the second-costliest storm in US historyafter 2005’s Hurricane Katrina, which caused $128 billionin damage in inflation-adjusted dollars. Sandy caused at least$315 million in damage in the Caribbean.


Haiyan Typhoon in the Philippines

Typhoon Haiyan was a very powerful tropical cyclone thatdevastated portions of Southeast Asia, especially thePhilippines, on November 8, 2013. It is the deadliestPhilippine typhoon on record, killing at least 6,190 people inthat country alone. Haiyan was also the strongest stormrecorded at landfall. As of January 2014, bodies are still beingfound. The overall economic losses from Typhoon Haiyantotaled $10 billion.


Video and Commentary of Devastation Wreaked by

Hurricane Katrina and the Aftermath

URL is http://www.youtube.com/watch?v=pvoEiBnpCc8

Click on underlined text:Images of Devastation of Hurricane Katrina in August 2005


http://www.youtube.com/watch?v=pvoEiBnpCc8

The Haitian and Chilean Earthquakes


Graphic Video of the Aftermath of the Haiti

Earthquake from The New York Times

URL ishttp://video.nytimes.com/video/2011/01/09/world/americas/1248069541193/surviving-the-haiti-earthquake.html

Click on underlined text:Graphic Video of the Aftermath of the Haiti Earthquake from The New York Times


http://video.nytimes.com/video/2011/01/09/world/americas/1248069541193/surviving-the-haiti-earthquake.html

H1N1 (Swine) Flu

As of May 2, 2010, worldwide,more than 214 countries andoverseas territories orcommunities have reportedlaboratory confirmed cases ofpandemic influenza H1N12009, including over 18,001deaths (www.who.int).

Parts of the globe experiencedserious flu vaccine shortages,both seasonal and H1N1(swine) ones, in late 2009.


The Impact of Disasters

Disasters have brought an unprecedented impact on humanlives in the 21st century and the number of disasters isgrowing. From January to October 2005, an estimated97,490 people were killed in disasters globally; 88,117of them because of natural disasters.

Frequency of disasters [Source: Emergency Events Database

(2008)]



The number of disasters is increasing globally, as is thenumber of people affected by disasters. At the same time, withthe advent of increasing globalization, viruses are spreadingmore quickly and creating new challenges for medical andhealth professionals, researchers, and government officials.

Between 2000 and 2004, the average annual number ofdisasters was 55% higher than in the period 1994 through1999, with 33% more humans affected in the former periodthan in the latter (cf. Balcik and Beamon (2008) andNagurney and Qiang (2009)).


Natural Disasters (1975–2008)


The Impacts of Disasters in 2013

The most expensive disasters globally in 2013 hit FirstWorld nations, but the ones that cost the most livesstruck developing countries.

German insurer Munich Re, in its annual report on disasters,noted in January 2014, that about 20,000 people died innatural disasters in 2013, about twice as many as in 2012.Most of the deaths resulted from Typhoon Haiyan that hit thePhilippines, Vietnam, and China in November with a loss ofabout 6,100 lives. This was followed by floods in India thatkilled about 5,500 people in June.

Insurance losses will likely be low, Munich Re said,because fewer people and businesses there carryinsurance.


The Impacts of Disasters in 2013

In contrast, flooding in central Europe in May and June 2013topped the list of global economic damage last year at morethan $15 billion, with the insurance industry paying $3 billionin claims. The most costly event for insurers in 2013 werehailstorms that struck southern Germany in July, damaginghundreds of thousands of cars and buildings and resulting in$3.7 billion in insurance payouts.

Interestingly, both the $125 billion global economicdamage caused by natural catastrophes in 2013 and the$31 billion in claims paid by insurers were below theaverage of the last 10 years of $184 billion and $56billion, respectively, according to Munich Re.


The Ebola Crisis in West Africa

The Ebola epidemic (2014-2015) in West Africa was thelargest outbreak of Ebola. According to the World HealthOrganization, as of December, 2015, the death toll was about11,000, impacting Liberia, Guinea, and Sierra Leone.Image thanks to cnn.com.


The Ebola Crisis in West Africa

Image thanks to The Economist.


Debbie Wilson Worked with Doctors Without

Borders in Liberia for 6 Weeks in Fall 2014

She spoke on the importance of logistics in February 2015 inthis course.Link to Debbie Wilson’s slides from her lecture


http://supernet.isenberg.umass.edu/courses/SC-MGMT597LG-Spring15/Wilsonlecture.pdf

The 2015-2016 Refugee Crisis


The 2015-2016 Refugee Crisis



Although the average number of disasters has been increasingannually over the past decade the average percentage ofneeds met by different sectors in the period 2000through 2005 identifies significant shortfalls.

According to Development Initiatives (2006), based on data inthe Financial Tracking System of the Office for theCoordination of Humanitarian Affairs, from 2000-2005, theaverage needs met by different sectors in the case ofdisasters were:

I 79% by the food sector;I 37% of the health needs;I 35% of the water and sanitation needs;I 28% of the shelter and non-food items, andI 24% of the economic recovery and infrastructure needs.


Disaster Response

Disaster response may be at the local/regional, national, orinternational levels (Van Wassenhove and Pedraza Martinez(2012)).

Typically, the immediate response to disasters comes fromlocal systems. These systems are comprised of governmentalagencies NGOs (non-governmental agencies) with localrepresentation, National Societies of Red Cross and RedCrescent with local branches, the army, fire and policedepartments, and other civil agencies.


Disaster Response

Disaster response may be at the local/regional, national, orinternational levels (Van Wassenhove and Pedraza Martinez(2012)).

Typically, the immediate response to disasters comes fromlocal systems. These systems are comprised of governmentalagencies NGOs (non-governmental agencies) with localrepresentation, National Societies of Red Cross and RedCrescent with local branches, the army, fire and policedepartments, and other civil agencies.


Disaster Response

When the local response system is overwhelmed by the size ofthe disaster, the national system is activated.

If the national system does not have the capability/capacity torespond and the affected country approves it, the internationalsystem is activated.


Disaster Response

When the local response system is overwhelmed by the size ofthe disaster, the national system is activated.

If the national system does not have the capability/capacity torespond and the affected country approves it, the internationalsystem is activated.


Disaster Response

The international disaster response system is organized inclusters (food, health, shelter) and is coordinated by theOCHA – the United Nations Office for the Coordination ofHumanitarian Affairs.

The response, as a whole, should be led by the nationalgovernment of the hosting country, with respect for thenational sovereignty (Van Wassenhove and Pedraza Martinez(2012)).


Disaster Response

The international disaster response system is organized inclusters (food, health, shelter) and is coordinated by theOCHA – the United Nations Office for the Coordination ofHumanitarian Affairs.

The response, as a whole, should be led by the nationalgovernment of the hosting country, with respect for thenational sovereignty (Van Wassenhove and Pedraza Martinez(2012)).


Humanitarian Supply Chains

The ultimate humanitarian supply chain has to be able torespond to multiple interventions on a global scale as quicklyas possible, and within a short time-frame.

Therefore, such supply chains need to be multiple,global, dynamic and temporary.

L. N. Van Wassenhove, 2006. Blackett Memorial Lecture: Humanitarian aid logistics: supply chain management in

high gear, Journal of the Operational Research Society 57, 475-489.



Due to the enormous impact of disasters, disastermanagement and humanitarian logistics have becometopics that are drawing attention from researchers invarious disciplines.

Practitioners and researchers are working more closely togetherto learn from one another and to push knowledge in thisgrowing and very challenging field forward.


Bellagio Conference on Humanitarian Logistics

See:http://supernet.isenberg.umass.edu/hlogistics/hlogistics.html



In this course, we will be covering the foundations ofhumanitarian logistics and healthcare supply chains with afocus not only on qualitative analysis and conceptualstudies but also on quantitative methods and analyticaltools.

The course will use both primary and secondary sourcesand will also feature experienced practitioners who willshare their knowledge.

In addition, videos in which experts share the state-of-the-artof supply chain management and humanitarian logistics intimes of disasters (and post) will also be viewed.


References

⇒ B. Balcik and B. Beamon, 2008. Facility location in humanitarianrelief, International Journal of Logistics: Research and Applications11, 101-121.

⇒ Department of Defense (2002), Dictionary of Military andAssociated terms, University Press of the Pacific, USA.

⇒ Development Initiatives, 2006. Global humanitarian assistance 2006report. http://www.globalhumanitarianassistance.org/pdfdownloads/GHA%202006.pdf

Accessed on January 5, 2009.

⇒ Emergency Events Database, 2008. Center for Research on theEpidemiology of Disasters, Catholic University of Louvain, Belgium.http://www.emdat.be/ Accessed on December 15, 2008.

⇒ Federal Emergency Management Agency, 1992. Federal responseplan. FEMA Publication 229.


References

⇒ A. Nagurney, 2006. Supply Chain Network Economics: Dynamics ofPrices, Flows, and Profits, Edward Elgar Publishing, Cheltenham,England.

⇒ A. Nagurney, K. Ke, J. Cruz, K. Hancock, and F. Southworth,2002. Dynamics of supply chains: A multilevel(logistical/informational/financial) network perspective,Environment and Planning B 29, 795-818.

⇒ A. Nagurney and Q. Qiang, 2009. Fragile Networks: IdentifyingVulnerabilities and Synergies in an Uncertain World, John Wiley &Sons, Hoboken, New Jersey.

⇒ A. Thomas and L. R. Kopczak, 2005. From logistics to supplychain management: The path forward in the humanitarian sector,Fritz Institute.

⇒ A. Thomas and M. Mizushima, 2005. Logistics training: necessityor luxury? Forced Migration Review 22, 60-61.


References

⇒ L. N. Van Wassenhove, 2006. Blackett Memorial Lecture:Humanitarian aid logistics: supply chain management in high gear,Journal of the Operational Research Society 57, 475-489.

⇒ L. Van Wassenhove and A. J. Pedraza Martinez, 2012. Using ORto adapt supply chain management best practices to humanitarianlogistics, International Transactions in Operational Research 19,307-322.


Documents

Lecture 1: Background and Introductionsupernet.isenberg.umass.edu/courses/SC-MGMT597LG-Spring16/20… · This course is based on primary source reading materials, including journal