Improving the design and management of agile supply chains

227 Pages·2010·5.53 MB·English

by  Charles, Aurélie

TTHHÈÈSSEE
en vue de l’obtention du
DDooccttoorraatt ddee ll’’UUnniivveerrssiittéé ddee TToouulloouussee
Délivré par l’Institut National Polytechnique
Discipline ou spécialité : Systèmes Industriels
Présentée et soutenue par Aurélie Charles
Le 15 Octobre 2010
Improving the design and management of agile
supply chains: feedback and application in the
context of humanitarian aid
Jury
Luk N.Van Wassenhove (Président)
Valérie Botta-Genoulaz (Rapporteur)
Gilles Paché (Rapporteur)
Gyöngyi Kovács (Examinateur)
École doctorale : Systèmes
Unité de recherche : Centre Genie Industriel - Mines Albi
Directeur de thèse : Lionel Dupont
co-Directeur de thèse : Matthieu Lauras

RésuméCourt
Lesecteurhumanitaireafortementévoluécesdernièresannées.Ilestpousséàplusdetranspa-
renceetdoitrendredescomptesauxdonateurs.Danscecontexte,notreétudeviseàexpliciter,
mesureretaméliorerl’unedesprincipalescaractéristiquesdeschaineslogistiqueshumani-
taires:leurcapacitéàrépondrerapidementetadéquatementauxchangementsàcourtterme.
Cettecapacité,l’agilité,estfortementinfluencéeparlamanièredontleréseaulogistiqueest
conçuetdimensionné.Notresecondeproblématiqueconsistedoncàassurerunniveaudéter-
minéd’agilitéauxchaîneslogistiqueshumanitairesenlesaidantàmieuxpositionnerleurs
ressources.L’objectifestdemontrerquel’onpeutobtenirceniveaudeserviceenmaximisant
l’efficienceduréseau.Nousavonsdoncquantifié,entermedecoûts,l’impactdeplusieurs
décisionsstratégiquescommeleniveaudeservice,laproximitédesfournisseursetledegréde
centralisationduréseau.
ShortAbstract
Apushforincreasedprofessionalismduringdisasterreliefoperationshasbeenreinforced
overthelastdecade.Theuncertaintieshumanitarianorganisationshavetocopewithandthe
vitalimportanceoftheirsuccesshasincitedthemtodeveloptheirabilitytorespondquickly
andadequatelytoshort-termchanges. Thisagilitycapabilityisbecominghighlyprizedby
the private sector. Starting from a framework of supply chain agility, this thesis analyses
humanitarianmethodsanddefinesanagilitymaturitymodelaimingtomeasureandimprove
theagilitycapabilityofasupplychain. Asagilityoftendependsontheadequatebalance
betweendeliverycapacityandneeds,oursecondproblemstatementaimstodesignalogistics
networkthatcanoperateunderhighlevelsofuncertaintysothatforagivenlevelofservicein
termsofagility,efficiencyismaximized.Ourstudyquantifiestheimpactoncostsofvarious
decisions,suchasnetworkdesign,supplystrategyorlevelofservice.

Contents
Contents v
Introduction ix
I HumanitarianSupplyChains 1
1 DisasterManagement:factsandrecentchanges 3
1.1 Guidingthread1-Howandwhydisastermanagementdiffersfromonecrisisto
another . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.2 Yogyakartaearthquake2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.3 Guidingthread2-Lessonslearntfrompastoperations. . . . . . . . . . . . . . . 11
1.4 Latestchangesindisastermanagement . . . . . . . . . . . . . . . . . . . . . . . . 14
2 Salientfeaturesofhumanitariansupplychains 21
2.1 Thehumanitarianoperationlifecycle . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.2 Humanitarianspace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.3 Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.4 Categoriesofflowsmanaged . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.5 Fundingprocess. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.6 Dynamics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.7 Uncertainty,complexity-Definitionsandimportanceinourspecificcontext . 26
2.8 Differenceswiththeprivatesector . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.9 DifficultiesoftheHSC-Theproblemofcoordination . . . . . . . . . . . . . . . 28
3 Literaturereviewandresearchstatements 37
3.1 Anew,attractiveareaofresearch . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.2 Overviewofresearchtypes,contributionsandmethodologies . . . . . . . . . . 38
3.3 Reviewssortedbyscopeofstudy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.4 PublicationsofNGOs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.5 Analysisandconclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.6 Ourproblemstatements:agilityandsupply-chaindesign . . . . . . . . . . . . . 44
v
II SupplyChainAgility 47
IntroductionandResearchQuestions 49
4 Howshouldsupplychainagilitybedefined? 51
4.1 Agility,Resilience,Adaptability:whatarethedifferences? . . . . . . . . . . . . . 51
4.2 Agilityversusleagility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.3 Definitionofsupplychainagilityanditsperformancedimensions . . . . . . . . 53
5 Howshouldsupplychainagilitybeassessed? 57
5.1 Whyassessingagility? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.2 Existingapproachesforassessingthecapabilitylevelofasystem . . . . . . . . . 58
5.3 Existingmodelstoassessagility:fuzzylogic . . . . . . . . . . . . . . . . . . . . . 60
5.4 Conclusion:constructionofaspecificmodel,butwithoutreinventingthewheel 61
6 Humanitariansupplychains:theexperienceofuncertainties 63
6.1 Scopeofourstudy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
6.2 CaseStudy:Humanitarianmethodstoachievesupplychainagility . . . . . . . 63
7 Supplychainagilityassessmentmodel 67
7.1 Metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
7.2 Assessmentgrids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
7.3 Assessmentmethod . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
7.4 GuidingThread3AssessingsupplychainagilityduringJogjakarta’soperations 73
7.5 Apracticaltooltofacilitatetheassessment . . . . . . . . . . . . . . . . . . . . . . 74
ConclusionandPerspectives 77
III SupplyChainNetworkDesign 79
Introduction 81
8 Overviewofactuallogisticsnetworks 83
8.1 TheUnitedNationsHumanitarianResponseDepot. . . . . . . . . . . . . . . . . 83
8.2 SituationattheIFRC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
8.3 Aggregatedviewofexistingpre-positionedresourcesyoucanfindinvarious
organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
8.4 Scopeofourstudy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
vi
Contents
9 Motivationstodecentralizesupplychains 91
9.1 Whichmotivationstopre-positionresourcesonalocallevel . . . . . . . . . . . 91
9.2 Whatwecanandcannottakeintoaccount . . . . . . . . . . . . . . . . . . . . . . 93
10 Mathematicalmodelsasdecision-supportsystem 97
10.1 Ontheneedofaspecificdecision-supportsystemtooptimizethelogisticnetwork 97
10.2 Existingstudiesinliterature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
10.3 Inourcase,howtomodeltheproblem? . . . . . . . . . . . . . . . . . . . . . . . 99
10.4 Overview-Whatarewedoingexactly? . . . . . . . . . . . . . . . . . . . . . . . . 100
11 Whatisthedemand? 103
11.1 Whatisthedemand?Howtomodelit?Generalthoughts . . . . . . . . . . . . . 103
11.2 Pastdisastersandtrends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
11.3 Influencingfactors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
11.4 Buildingtheestimationstobeusedasentrydataforouroptimizationmodel . 111
12 Ouroptimizationmodel-Hypothesis,NotationsandModel 113
12.1 EndusersandProducts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
12.2 Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
12.3 Potentialwarehouses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
12.4 Objectivefunctionandconstraints. . . . . . . . . . . . . . . . . . . . . . . . . . . 118
12.5 Notationsandmodel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
13 Analysis 123
13.1 Whichnetworkconfigurationandsupplystrategy? . . . . . . . . . . . . . . . . . 125
13.2 Discussionsonnetworkdesign,withouttakingexistingnetworksintoconsidera-
tion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
13.3 Networkdesigntakingintoaccountexistingnetwork . . . . . . . . . . . . . . . . 133
13.4 Sizeofcontingencystockandsizeofwarehouses . . . . . . . . . . . . . . . . . . 138
13.5 Reliabilityandsensitivityanalysis . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
13.6 Managementsummary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
14 Choiceofthecountrywithintheregion 149
14.1 Takingintoaccountfieldrealities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
14.2 Choosingtheapproach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
14.3 Selectingthecriteriaandgatheringdata . . . . . . . . . . . . . . . . . . . . . . . 152
14.4 Aggregatingtheparameters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
14.5 Analysisandcomparisonwithothermethods . . . . . . . . . . . . . . . . . . . . 159
vii
Conclusion 163
SummaryinFrench 165
Appendix 177
A Supplychainagility-Assessmentmodel 179
B Warehouselocationonaregionallevel-Dataset 185
C Warehouselocationonalocallevel-Dataset 193
Bibliography 203
viii
Introduction
Motivations and background
Thehumanitariansectorhasbeenconfrontedwithmanychangesoverthelasttenyears.On
theonehand,thecrisisprofileisevolvingtowardmoresmall-andmedium-sizeddisasters,so
therearemoreoperationsallovertheworld.Ontheotherhand,donorsarepledgingmillions
indonationsinaneconomiccontextthatimposesrationalisation(seefigure1). Therefore,
they are asking for more accountability and transparency and have less tolerance for the
fire-fighting mentality that characterised most humanitarian operations in the past. As a
consequence,disasterreliefneedsmorestructure;ithastobecomemoreresults-orientedto
avoiddirectfrictionwiththeprivatesector.Thefirststepofourworkconsistsintheformal
characterisationofhumanitariansupplychainsinordertocomprehendtheirspecificitiesand
needs.
500 14000
d
e 450
port 400 12000
ber of disasters re 112233050505000000 million US$14680000000000000
m 2000
u 50
N
0 0
1987 1997 2007 1999 2010
(a)Evolutionofthenumberofnaturaldisasters[Hoy+07] (b)EvolutionoffundinginmillionUS$[UNO10]
Figure1:Naturaldisasters,factsandtrends
Humanitarianorganisationsoftenhavetoquicklyimplementcomplexsupplychainsunder
highlevelsofuncertaintyregardingdemandandsupplyaswellastheenvironment, thus
becomingspecialistsatbeingagile. Startingfromaframeworkofsupplychainagility,the
secondpartofthisthesisanalyseshumanitarianmethodsanddefinesanagilitymaturity
modelaimedatmeasuring,improvingandtransferringtheagilitycapabilitiesofhumanitarian
orcommercialsupplychains.
Workingontheclarificationofwhatexactlyenableshumanitarianstobereactiveandeffective
wouldbenefitboththeprivatesectorandhumanitarians.Indeed,manyauthorsagreeonthe
importanceofagility. Kiddgoesevenasfarasassertingthatagilityis“thefuturebusiness
systemthatwillreplacethemassproductionbusinessesoftoday”[Kid95].Havingalogical,
ix
objective, robust and reproducible method for assessing supply chain agility is therefore
becomingofprimeimportanceforbothcommercialandhumanitariansectors.Firstofall,it
wouldenableandencourageinternalreflection.Secondly,itwouldprovideorganisationswith
acommondiscussiontoolthatcanbeusedtoofferproofoftheircompetitiveadvantage.This
isobviouslytruefortheprivatesector,butitisalsovalidforhumanitarians,whocoulduse
thisapproachasevidenceoftheirgoodagilitylevel.
Suchatoolwouldalsoprovidesupplychainmanagerswitheffectivewaysofcollaborating
withotherstakeholders, thusfacilitatingbenchmarkingandcross-learning. Eventually, it
wouldleadtobettermeasurementofperformancelevels,improvedmanagementskillsand
abilities,andincreasedfacilitationofknowledgemanagement,whichisnotonlyapathtoward
self-improvement,butalsoarequirementformeetingdonors’expectations.
Asagilityoftendependsontheadequatebalancebetweendeliverycapacityandneeds,our
secondproblemstatementaimstodesignahumanitarianlogisticsnetworksothatforagiven
levelofserviceintermsofagility,efficiencyismaximised.Thethirdpartofthisthesistherefore
quantifiestheimpactoncostsofvariousdecisions,suchasnetworkcentrality,supplystrategy
orlevelofservice.
For this purpose, we have developed a mixed integer linear programme to give the best
locationsforpositioninghumanitarianresources,namelyreliefitemsandmaterialmeansof
transportationsuchasvehicles.Theobjectivefunctionoftheprogrammeistominimisethe
costsoftheresponse.Theeffectivenessandresponsivenessoftheresponseareconsidered
asconstraints.Inotherwords,theprogrammedetermineswhichsupplychaindesignwould
enableanorganizationtomeetitstargetedlevelofserviceatalessercost.Thepracticalresult
fororganizationsisaquantifiedanalysisforknowinghowmanywarehousesshouldbeopened,
whyandwhere. Wealsoconductedasensitivityanalysisofvariousparametersinorderto
clarifywhichdecisionsimpactthecostsoftheresponse.Wethereforevariedtheinputsand
constraintsofthemodeltoanalysethedifferencebetweenacentralisedoradecentralised
network,betweenglobalorlocalsupplystrategies,andtoquantifytheeffectsofahighlevelof
serviceintermsofcosts.
Theserunsweremadeataregionallevel;thatistosay,wedividedtheworldinto21regions,
eachonebeingapproximatelythesamesizeasAustralia.Onceweknewwhichregionsshould
hostawarehouse, wejumpedtoalocallevelandusedaprincipalcomponentanalysisto
definerelevantindicators,suchasaccessibility,telecommunications,corruptionandthelevel
ofsecurity.Theseindicatorswerethenweightedfollowingadesignofexperimentandusedto
findthebestlocation,thistimeatacountry-widelevel.Thislocalanalysiswasdrivenbyfield
specificities,asnohumanitarianorganisationwouldwillinglybuildawarehouseinanunsafe
orinaccessiblearea.
Workingontheconfigurationanddimensioningofalogisticsnetworkunderdemand,supply
andenvironmentaluncertaintieswouldbenefitbothhumanitariansandtheprivatesector.
Theincreasedvolatilityofdemand,supplyandtheenvironmentarebecomingacommon
concernformostbusinesslines,fromthefashionindustrytohumanitarianaid.Thisthesis
proposesamethodfordesigningasupplychainundersuchuncertainconditions. Forhu-
manitariansitwouldprovideanoptimisationoftheirstocklocationandasaresult,afast
andadequateresponseatalessercost. Thisisanareaofresearchthatmanyhumanitarian
organisations,suchastheInternationalFederationoftheRedCrossandRedCrescentSo-
cieties(IFRC),WorldVisionInternationalortheFrenchRedCrossrecogniseasoneoftheir
majorissues.Wehavethereforedesignedourstudyonthebasisofinputanddiscussionswith
humanitarianpractitioners.OurmodelfitsthespecificationsgivenbytheIFRCandprovidesa
x