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Hungry for a New Solution

6/7/2012

Supply chain management remains an obstacle to disaster relief

The world hunger problem is not going to go away.

UNICEF, as part of a worldwide initiative to combat hunger in emerging countries, adopted the use of a ready-to-use therapeutic food (RUTF). The biggest challenge proved to be supply chain management. A team of researchers led by Jay Swaminathan and Wendell Gilland, professors of operations, technology and innovation management at UNC Kenan-Flagler, came to the rescue.

The Financial Times published their “Case Study: Getting Food to Disaster Victims,” which summarizes the key findings of the study that helped UNICEF radically change the distribution strategy of the RUTF in the Horn of Africa.

Hungry

“Things we take for granted in the developed world – roads, warehouses, logistics, clearance processes – you can’t take for granted in emerging countries,” Swaminathan said. “And with the regulations and barriers between countries, sometimes you can’t trans-ship products even between neighboring countries.”

The study quantified the level of shortage as demand for RUTF rose exponentially and showed UNICEF how much it had to expand its supply base. Uncertainty is a key factor that contributes to supply chain challenges. Weather patterns, such as extended drought, can cause demand swings; so can political events, in emerging countries.

Transportation times varied wildly. Many issues that pose minor problems in developed countries can totally derail the system in an emerging country. Heavy rain might delay a flight in some parts of the world but could wash out a road in an emerging country, forcing the supply chain to find another route or means of transport.

Swaminathan generally recommends local sourcing as a way to increase supply chain efficiency. But in emerging countries, that can be very difficult.

“Getting startup funding for small businesses, getting the right quality machinery to do the work and getting an uninterrupted supply of raw materials of sufficient quality are challenges,” he said. Nonprofi ts face the additional obstacle of having to rely on funding for almost every link in the system. Variance in the amount and timing of funding schedules severely hampers supply chain productivity. Most recently, he and his doctoral student Karthik Natarajan have quantified how funding flows impact operational effectiveness in humanitarian settings.

Swaminathan’s recommendations for diversifying UNICEF’s supply base, improving its demand forecasting systems and broadening its approach to obtaining and managing funding have saved UNICEF millions of dollars over the past three years. “Still, more resources, more attention and more studies are needed to make a major dent in combating hunger,” Swaminathan said.

Jay Swaminathan is the GlaxoSmithKline Distinguished Professor of operations, technology, and innovation management and faculty director of UNC-CIBER at UNC Kenan-Flagler.

Wendell Gilland is an associate professor of operations, technology and innovation management at UNC Kenan-Flagler.

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