Challenges and the use of

performance measurements in
humanitarian supply chains

Master’s thesis within Business Administration

Authors: Daniel Willner
Stavros Zafeiridis
Tutor: Beverley Waugh

Jönköping May 2013

Acknowledgement
Foremost, we would like to express our sincere gratitude towards our thesis supervisor,
Dr Beverley Waugh for her continuous support towards our master thesis. Her valuable
assistance in the preparation and completion of this study has helped us to find and keep
the right track on our thesis. We appreciate all her time and efforts.
We would also like to thank Johan Larsson for his encouragement and insightful com-
ments during the research process.
Furthermore, we are grateful for all the humanitarian organisations and the respondents
who participated in our research. Without their contribution, this research would not
have been possible.
Lastly, we would like to thank the members of our thesis group for their comments and
constructive feedback during the seminars.

Jönköping, May 2013

Daniel Willner Stavros Zafeiridis

Master’s thesis within Business Administration
Title: Challenges and the use of performance measurements in hu-
manitarian supply chains
Authors: Daniel Willner
Stavros Zafeiridis
Tutor: Beverley Waugh
Date: May 2013
Subject terms: Supply chain management, humanitarian organisations, KPI,
key performance indicators, performance measurements,
humanitarian supply chain challenges, disaster relief

Abstract
The field of humanitarian logistics and supply chain management is increasingly the
subject of research. Even though there has been some research in the field in the past,
the necessity for more research related to the measurement of the effectiveness of hu-
manitarian supply chains is required. Humanitarian supply chain management deals not
only with natural disasters but also with man-made disasters. Thus, different types of
disasters create different challenges for humanitarian aid. Moreover, the different stages
of the disasters require different courses of action. The lack of extended research in the
field of humanitarian supply chain and logistics, the increase of the impact of disasters
as well as the differences between the commercial and the humanitarian supply chains,
make it clear that the sector should find ways to improve its efficiency. Tools and met-
rics can be used to measure and improve the efficiency of the supply chains. According
to literature there are no sophisticated measures of effectiveness for humanitarian logis-
tics and supply chains.
The purpose of this thesis is to identify the main challenges in humanitarian supply
chains and what is the role of performance measurements in humanitarian operations.
Moreover, the thesis aims to identify an appropriate model for measuring and thus, en-
hancing performance in the humanitarian supply chains.
The research strategy chosen for this study is a holistic multiple case study. The empiri-
cal data is collected through interviews. For this research in total 3 organisations’ rep-
resentatives and 2 volunteers were interviewed. The collected data have been analysed
by combining theories and previous studies in the literature.
The main findings from analysing the empirical data revealed that, depending on the
disaster phase, humanitarian organisations face different challenges in their supply
chains. By implementing appropriate performance measurements, the humanitarian or-
ganisations can limit the impact of the challenges in the supply chain operations, gain
more relevant and precise information regarding the humanitarian operations, and en-
hance supply chain coordination among different stakeholders. As an outcome, by im-
plementing appropriate performance measurement systems, the humanitarian organisa-
tions can overcome some of these challenges in their supply chains, and therefore en-
hance the overall supply chain performance.

1
Table of Contents
1 Introduction ............................................................................... 5
1.1 Background ............................................................................................5
1.2 Problem ..................................................................................................6
1.3 Purpose ..................................................................................................7
1.4 Research questions ................................................................................7
1.5 Delimitations ...........................................................................................8
1.6 Outline of the thesis ................................................................................8
2 Literature review ....................................................................... 9
2.1 Humanitarian supply chains ...................................................................9
2.1.1 Humanitarian versus commercial supply chains .....................................9
2.1.2 Actors in supply networks of humanitarian supply chains..................... 11
2.2 Relief chain coordination and challenges ............................................. 13
2.2.1 Relief chain structure and characteristics ............................................. 13
2.2.2 Disaster categorization ......................................................................... 14
2.2.3 Disaster timelines and operations ........................................................ 15
2.2.4 Challenges in disaster relief ................................................................. 16
2.3 Performance measurements in humanitarian supply chain .................. 16
2.3.1 Importance of performance measurement............................................ 17
2.3.2 Difficulties in measuring performance................................................... 17
2.3.3 Developing performance measurement systems ................................. 18
2.3.4 Performance measurement categorization ........................................... 21
2.4 Summary of the literature review .......................................................... 22
3 Methodology ............................................................................ 24
3.1 Business research ................................................................................ 24
3.2 The research topic ................................................................................ 24
3.3 The literature review ............................................................................. 24
3.4 Research approach .............................................................................. 25
3.5 Research strategy ................................................................................ 26
3.6 Sample selection .................................................................................. 27
3.7 Data collection ...................................................................................... 28
3.8 Data analysis ........................................................................................ 28
3.9 Reliability and validity ........................................................................... 29
4 Empirical study ....................................................................... 30
4.1 Interviews ............................................................................................. 30
4.1.1 Organization A ...................................................................................... 30
4.1.2 Organization B ...................................................................................... 33
4.1.3 Organization C ..................................................................................... 35
4.1.4 Volunteer A........................................................................................... 39
4.1.5 Volunteer B........................................................................................... 41
5 Analysis ................................................................................... 43
5.1 Humanitarian versus commercial supply chains ................................... 43
5.2 Challenges in humanitarian supply chains ........................................... 44
5.2.1 Pre-disaster challenges ........................................................................ 44

2
5.2.2 Disaster and post-disaster challenges .................................................. 45
5.3 Performance measurements in humanitarian supply chains ................ 47
5.3.1 Difficulties in measuring performance in humanitarian
organizations ..................................................................................................... 48
5.3.2 Performance measurement characteristics .......................................... 49
6 Conclusions ............................................................................ 52
7 Contributions........................................................................... 53
References ................................................................................... 54
Appendices .................................................................................. 59

3
Figures
Figure 1.1 A typical humanitarian supply chain...............................................................6
Figure 2.1 Commercial supply chain flows....................................................................10
Figure 2.2 Humanitarian supply chain flows..................................................................10
Figure 2.3 Actors in the supply network of humanitarian aid........................................12
Figure 2.4 Relief chain structure.....................................................................................14
Figure 3.1 Deductive and Inductive research approaches...............................................26
Figure 3.2 Research choices............................................................................................28
Figure 5.1 Challenges in humanitarian supply chains.....................................................47
Figure 5.2 Model for creating appropriate performance measurement systems for hu-
manitarian supply chains.....................................................................................50

Tables
Table 2.1 Disaster categorization and examples………………………..………..….....14
Table 2.2 Disaster timeline and operations ……………………………………………15
Table 2.3 Definition of the indicators’ criteria…………………………………………21
Table 4.1 List of interviews………………………………………………………....….30
Table 4.2 The main elements of interview 1……......……………………………….....33
Table 4.3 The main elements of interview 2…………………………………………...35
Table 4.4 The main elements of interview 3…………………………………………...39
Table 4.5 The main elements of interview 4……………………………………..…….41
Table 4.6 The main elements of interview 5…………………………………………...42
Table 5.1 Pre-disaster challenges………………………………………………………45
Table 5.2 Advantages of performance measurement in humanitarian organisations......48
Table 5.3 Barriers in measuring performance…….……………………………………49

Appendices
Appendix 1 Interview guideline…………………………………….…….……………59
Appendix 2 Key performance measures/metrics in logistics and SC environment....…60
Appendix 3 Metrics used to measure performance in SCM systems and their relations to
categories and factors......................................................................................................61

4
1 Introduction
The first chapter introduces the background, problem and purpose of this research.
Moreover, the research questions are presented, and finally the delimitations and out-
line for the thesis are discussed.

1.1 Background
The field of humanitarian logistics and supply chain management has captured the at-
tention of researchers in the recent years (Kovács & Spens, 2011). Until 2005, there was
a limited amount of published articles related to the field of humanitarian logistics and
supply chain management (Altay & Green, 2006).
According to Beamon (2004), even though there has been some research in the field in
the past, the necessity for more research related to the capabilities and the measurement
of the effectiveness of humanitarian supply chains is required. Moreover, Kovács and
Spens (2007) state that most of the existing literature has little academic origin but
comes from practitioner journals. The main areas that have been researched in the past
years are related to inter-agency coordination, performance measurement, information
and communication technology in humanitarian supply chains and logistics as well as
the aspects of agility and responsiveness. The continuance of the research in those and
further fields is important (Kovács & Spens, 2011).
Furthermore, the frequency and the impact of the disasters, in combination with the ex-
tended publicity, have attracted the public attention as well as the attention of research-
ers. In parallel with the academic research, more and more conferences with a humani-
tarian logistics and supply chain management orientation have been introduced in recent
years (Kovács & Spens, 2011).
According to Mentzer, DeWitt, Keebler, Min, Nix, Smith and Zacharia (2001) a hu-
manitarian supply chain refers to the network which is created through the flow of ser-
vices, supplies, information and finances between donors, beneficiaries, suppliers and
different units of humanitarian organisations, in order to provide physical aid to benefi-
ciaries. There is no single form of humanitarian supply chain; however, a typical supply
chain could follow the sequence in Figure 1.1 (Oloruntoba & Gray, 2006).
Humanitarian supply chain management deals not only with natural disasters such as
earthquakes, floods, hurricanes, tsunamis, and epidemics, but also with man-made dis-
asters such as wars, terrorist attacks or a combination of those (Kovács & Spens, 2009).
Thus, different types of disasters create different challenges for humanitarian aid.
Moreover, the different stages of the disasters require different courses of action
(Kovács & Spens, 2007).

5
Figure 1.1 A typical humanitarian supply chain (Oloruntoba & Gray, 2006, p. 116).

According to Thomas and Kopczak (2005), there are three different categories of inter-
national aid agencies. The first category includes organizations which are operating un-
der the umbrella of the United Nations (UN), such as the World Health Organization
(WHO) and the United Nations International Children's Emergency Fund (UNICEF).
The second category includes international organizations such as the International Fed-
eration of Red Cross and Red Crescent Societies (IFRC), which operates with country
offices supporting the local governments. Finally, the third category includes Non-
governmental organizations such as CARE and World Vision. Kovács and Spens (2009)
differentiate the humanitarian organizations as: supranational aid agencies (UN agen-
cies), governmental organizations (GOs), big international non-governmental organiza-
tions (BINGOs) and one man non-governmental organizations (NGOs).
The humanitarian supply chain network does not consist only of the humanitarian or-
ganizations. There are several other stakeholders who are involved and affect the proc-
ess. According to Kovács and Spens (2007), the actors involved in the humanitarian
supply chain are donors, aid agencies, NGOs, governments, the military, logistics ser-
vice providers and suppliers. In addition to these actors, Oloruntoba and Gray (2006)
include the aid recipients (beneficiaries) and the community-based organizations as in-
volved actors. Finally, according to Van Wassenhove (2006), also both media and pub-
lic opinion influence to some extend the humanitarian supply chains.

1.2 Problem
According to Thomas and Kopczak (2005), the disaster relief sector is and will continue
to be a growing market. Not only natural disasters, but also man-made disasters are ex-
pected to increase in the next fifty years. The main reasons are the environmental pollu-
tion, the rapid urbanization and the expansion of HIV in the developing world. The
government aid for humanitarian purposes between 1990 and 2000 has doubled in real
terms from USD 2.1 billion to USD 5.9 billion (Thomas & Kopczak, 2005, p. 3). Guha-
Sapir, Santos and Borde (2013) note that after the turn of the millennium large scale
natural disasters have occurred such as the earthquake in Haiti in 2010 and the Indian
Ocean tsunami in 2004. Moreover, since December 2010 six out of 22 Arab countries
(Yemen, Syria, Tunisia, Egypt, Libya and Bahrain) have had major uprisings, which
have created significant need for disaster relief (Smith, 2012). The people who have
been killed after the turn of the millennium exceed the one million mark and more than

6
2.3 billion have been directly affected by natural disasters. Kellett and Sparks (2012, p.
1) state that between 2000 and 2009, in total 4484 natural disasters occurred and total
cost of these disasters exceeded USD 891 billion.
Apart from the increase in the frequency and effects of the disasters, there are also more
challenges that the humanitarian organization has to overcome. Thomas and Kopczak
(2005) list the main challenges and suggest strategies in order to overcome these chal-
lenges. They highlight the lack of recognition of the importance of logistics in the hu-
manitarian sector, the lack of professional staff, the inadequate use of technology, the
lack of institutional learning as well as the lack of coordination among the actors as the
main challenges (Thomas & Kopczak, 2005).
Furthermore, according to Whybark, Melnyk, Day and Davis (2010), the operational
environment of the humanitarian supply chain and the commercial supply chain differ
significantly. The commercial supply chains have to deal with somewhat predetermined
set of suppliers, manufacturing sites and predictable demand, but these terms are not the
same for the humanitarian supply chains (Cassidy, 2003). According to Balcik and
Beamon (2008), the main differences between commercial and humanitarian supply
chains are: the unpredictability of demand in terms of timing, location, type, and size,
the large amount of demand in a combination with short lead times, high stakes associ-
ated with adequate and timely delivery, as well as the lack of resources regarding sup-
ply, people, technology, transportation capacity and money.
Taking everything into consideration, the lack of extended research in the field of hu-
manitarian supply chain and logistics, the increase of the frequency and the impact of
the disasters as well as the differences between the commercial and the humanitarian
supply chains, it is clear that the sector should find ways to improve its efficiency
(Thomas & Kopczak, 2005). Tools and metrics can be used to measure and improve the
efficiency of the supply chain (Korpela & Tuominen, 1996). According to Pettit and
Beresford (2009), there are no sophisticated measures of effectiveness for humanitarian
logistics and supply chains yet. When measures such as delivery time and total logistics
cost can be measured and managed, the benefits are significant. Moreover, donors are
becoming more demanding regarding performance and impact and this increases the ne-
cessity for performance measurements and improvements in the humanitarian aid sector
(Pettit & Beresford, 2009).

1.3 Purpose
The purpose of this thesis is to identify the main challenges in today’s humanitarian
supply chains and what is the role of performance measurements in humanitarian opera-
tions. Moreover, the thesis aims to identify an appropriate model for measuring and
thus, enhancing performance in the humanitarian supply chain.

1.4 Research questions

Q1: What are the main challenges in humanitarian supply chains?
Q2: What is the role of performance measurements in the humanitarian operations?
Q3: Based on the empirical study, what would be an appropriate model for measur-
ing and thus, enhancing performance in the humanitarian supply chain?

7
1.5 Delimitations
Due to the time constraints and wide scope of the research topic, delimitations are nec-
essary. Firstly, the research concentrates on humanitarian organizations which have ac-
tivities in more than one crisis zone and are active in international supply chain coordi-
nation. Thus, small humanitarian organisations are excluded from this research. The re-
search sample is limited to three international humanitarian organizations’ offices based
in Sweden and Greece. In addition, two Swedish volunteers working in the crisis zones
have been interviewed. Finally, the authors of the thesis were obliged to sign a confi-
dentiality agreement with the participant organizations, and therefore, the names and
any other identifying information about study sites and participants had to be treated
with completely confidentiality.

1.6 Outline of the thesis

The thesis consists of seven chapters.

The first chapter includes an introduction to the research topic, providing general infor-
mation regarding the main terms discussed in the thesis, the problem, the research ques-
tions, the purpose and the delimitations of the research.

The second chapter presents terms and concepts related to the research topic and previ-
ous research that has been conducted in the past in the same field. This chapter gives a
comparison of the humanitarian and commercial supply chains; and discusses the actors
and the challenges related to humanitarian supply chain coordination. Moreover, the is-
sues and concepts related to performance measurements in humanitarian supply chain
are discussed.

The third chapter provides information related to the research approaches, characteris-
tics, types and strategies. Moreover, this chapter presents the method that was used to
collect and analyse the data. Finally, terms of reliability and validity are presented.

The fourth chapter presents the primary data that was collected through the interviews
and humanitarian organizations’ databases.

The fifth chapter provides a thorough analysis of the collected data and their connection
with the related theory. Moreover, in this chapter the research questions are answered
and a model which summarizes the findings is presented as well.

The sixth chapter presents the conclusions of the research.

The final chapter presents the contributions and suggestions for further research.

8
2 Literature review
The purpose of this chapter is to present a literature review, which focuses on theories
and previous studies, related to humanitarian supply chains. Furthermore, the chal-
lenges in humanitarian logistics are presented including, disaster categorization, time-
lines and operations. Finally, this chapter discusses the importance and issues of per-
formance measurements in humanitarian supply chains.

2.1 Humanitarian supply chains

Mentzer et al. (2001) describe the humanitarian supply chain as the network created
through the flow of services, supplies, information and finances between donors, bene-
ficiaries, suppliers and different units of humanitarian organizations, in order to provide
physical aid to beneficiaries. In businesses in general, the supply chain links the sources
of supply (suppliers) to the owners of demand (end customers). The goal of the supply
chain is to deliver the right supplies, in the right quantities to the right location at the
right time (Shepherd & Gunter, 2006). The humanitarian supply chain usually includes
functions which do not fall directly into the field of humanitarian logistics. Tasks such
as managing relationships with donors, planning for supplies required, performing
needs assessments, and monitoring and evaluating the impact of distributed supplies, are
usually the responsibilities of non-logistics units (Howden, 2009).

2.1.1 Humanitarian versus commercial supply chains

According to Van Wassenhove (2006), in 2006, humanitarian organizations were about
15 years behind the private sector in terms of understanding the importance of using ef-
ficient supply chains and opportunities to ‘go global’. Van Wassenhove (2006) also
states that it is only recently that humanitarian organization such as Red Cross and the
World Food Programme (WFP) have started to pin-point logistics and supply chain
management as key to a relief organization.
Relief-oriented humanitarian organizations are non-profit organizations and differ from
for-profit organizations in the commercial (private) sector in terms of revenue sources,
strategic goals, stakeholders and performance measurements (Moore, 2000; Baruch &
Ramalho, 2008; Balcik & Beamon, 2008). Therefore, also there are fundamental differ-
ences in their supply chains in terms of their characteristics. These differences can be in
terms of their strategic goals, customer and demand characteristics, and environmental
factors (Balcik & Beamon, 2008).
Figure 2.1 illustrates a commercial supply chain with four functional stages which are
supply, manufacturing, distribution and consumers. In humanitarian supply chains, sup-
plies flow, similar to a commercial supply chain, through the relief chain via a series of
long-haul and short-haul shipments. The flow of the humanitarian supply chain is illus-
trated in Figure 2.2 (Balcik & Beamon, 2008). Supplies in humanitarian supply chains
typically consist of pre-positioned stocks in warehouses, supplies procured from the
suppliers, and in-kind donations. These supplies are shipped from various locations to
the port of entry, which is located near a sea- or airport. In the second step the supplies
are shipped to a central warehouse which is typically located in a larger city. At this
stage, the supplies are stored and categorised and transferred to local distribution cen-
tres. Finally, the supplies are delivered from the local distribution centres to the benefi-
ciaries (Balcik & Beamon, 2008).

9
Figure 2.1 Commercial supply chain flows (Beamon & Balcik, 2008, p. 8).

Figure 2.2 Humanitarian supply chain flows (Beamon & Balcik, 2008, p. 8).

Humanitarian supply chains may share similarities with commercial supply chains, in
terms of structure and logistics activities; however, they also differ on various levels
due to unpredictability and the dynamic and chaotic environments in which they operate
(Beamon & Balcik, 2008).

According to Nagurney (2012), in the commercial supply chain, the end user primarily
demands products, however, in the humanitarian supply chain, the demand is mainly in
supplies and people providing humanitarian assistance (Nagurney, 2012). Moreover, the
demand in commercial supply chains, compared to the humanitarian supply chains, is
relatively stable and predictable and demands occur at fixed locations in set quantities.
In humanitarian supply chains the demand is generated through random events that are
usually unpredictable in terms of timing, type, and size. (Beamon & Balcik, 2005)
Moreover, in humanitarian supply chains demands are estimated after they are needed
and based on an assessment of disaster characteristics. When it comes to inventory con-
trol, a commercial supply chain utilizes well-defined methods for determining inventory
levels which are based on lead time, demand and target customer service level. For hu-

10
manitarian supply chains, inventory control, however, is challenging due to high varia-
tions in lead times, demands and demand locations.
According to Oloruntoba and Gray (2006), unlike most commercial supply chains, the
humanitarian supply chain is often unstable. Sometimes the humanitarian supply chain
breaks down at the receiving end, but it may be unstable also at the point of origin due
to politicised donations by governments and private donors’ competitive nature of fund-
raising.
Lead times in commercial supply chains are determined by the Supplier-Manufacturer-
Distribution Center-Retailer chain (Nagurney, 2012). In humanitarian supply chains,
there is a zero (or approximately zero) time between the occurrence of the demand and
the need for it. However, the actual lead time is determined by the chain of material
flow (Beamon & Balcik, 2005; Nagurney, 2012). When it comes to distribution network
configuration in a commercial supply chain, there are existing methods for determining
the fixed locations and numbers of distribution centres. In the humanitarian supply
chain this is usually more challenging due to the nature of unknowns and “last mile con-
siderations” (Beamon & Balcik, 2005).
Furthermore, information systems in humanitarian supply chains face challenges as in-
formation is often unreliable, incomplete or non-existent. However, in commercial sup-
ply chain, information systems are typically well-defined, and utilize advanced technol-
ogy (Nagurney, 2012). Beamon and Balcik (2005), discuss the differences in perform-
ance measurement systems between commercial and humanitarian supply chains. In a
commercial supply chain the traditional focus in performance measurements is on re-
source performance metrics, such as maximising profit or minimising costs. However,
in humanitarian supply chains, the traditional focus is on output rather than resources,
such as in response time and ability to meet the needs of the disaster (Beamon & Balcik,
2005).
Also strategic goals differ between the commercial and the humanitarian supply chain.
In a commercial supply chain, often the strategic goal is to produce high quality prod-
ucts at low costs, and therefore, to maximise profitability and achieve customer satisfac-
tion. In the humanitarian supply chain, the strategic goal is not to maximise profitability
but to minimize the loss of life and alleviate suffering (Nagurney, 2012).

2.1.2 Actors in supply networks of humanitarian supply chains

According to Balcik, Beamon, Krejci, Muramatsu and Ramirez (2010), humanitarian re-
lief environments involve international relief organizations, host governments, the mili-
tary, local relief organizations, and private companies, which each may have different
interests, capacity, mandates and logistics expertise. Thus, typically, no single actor has
sufficient resources to respond efficiently to a major disaster (Bui, Cho, Sankaran &
Sovereign, 2000). Balcik, et al. (2010), mention that for example over 40 countries and
400 non-governmental organizations took part in providing humanitarian aid for the
2004 Asian Tsunami zone.
Kovács and Spens (2007) list six actors that are involved in the humanitarian aid supply
network (Figure 2.3). These actors are not linked to the benefits of satisfying demand.
“Suppliers have different motivations for participating in humanitarian supply chains
and customers are not generating a voluntary demand and will hopefully not create a
‘repeat purchase’“ (Kovács & Spens, 2007, p. 107)

11
Figure 2.3 Actors in the supply network of humanitarian aid (Kovács & Spens, 2007, p. 106).

According to Long and Wood (1995), the end-user in the humanitarian supply chain has
no choice in selecting the end-product and therefore, “true demand” is not created. The
demand is rather assessed through aid agencies which are also the primary actors
through which governments channel the aid. The global actors in the humanitarian sup-
ply chain are usually the largest agencies; however, there are also many small regional
and country-specific aid agencies (Thomas & Kopczak, 2005). Many of these organiza-
tions have their own political motives for providing relief (Kovács & Spens, 2007).
Sometimes political issues might generate the need for relief operations and even make
it difficult for supplies to reach the particular region. In some crisis, such as wars, rebel
forces might even block the arrival of the supplies (Murray, 2005).
Donors are important actors in the humanitarian supply chain as they provide funding
for major relief activities. In recent years, in addition to country specific funding, indi-
vidual donors, foundations and the private sector have become important sources of
funds for aid agencies (Kovács & Spens, 2007). According to Kaatrud, Samii, and van
Wassenhove (2003), other actors in the humanitarian supply chain include the military,
host governments and neighbouring country governments, other NGOs and logistics
service providers.
The military can also be seen in many occasions as an important actor as the military
personnel can help providing assistance in the crisis zones (Özdamar, Ekinci, & Kücük-
yazici, 2004). For example, during hurricane Katrina in 2005, the military provided
critical communications, logistics and planning capabilities for the relief operations. In
addition, host governments are important actors as they own assets such as fuel depots
or warehouses. Also the host country’s logistics or regional service providers form an
important part in the relief operations as they can facilitate or constrain the operational
effectiveness of humanitarian logistics operations (Kovács & Spens, 2007). Kovács and
Spens (2007) also mention that extra-regional logistics service providers, such as DHL
are part of the humanitarian supply process as they have contributed to the international
relief efforts to deliver aid supplies to people and communities affected by the crisis.

12
2.2 Relief chain coordination and challenges
2.2.1 Relief chain structure and characteristics
The operational structure of the supply chain and characteristics of humanitarian supply
chains differ, depending on the type of the disaster and the actors involved (Balcik et al.,
2009). Figure 2.4 illustrates the typical flow of supplies in a relief chain driven by inter-
national relief organizations.
The first step of the humanitarian relief chain is the supply acquisition and procurement.
Supplies can be procured locally and/or globally. Both options have their own advan-
tages and disadvantages and they vary in terms of expected logistics costs, lead time and
supply availability. For example, the advantages of the local supplies are shorter lead
time and lower logistics costs (Balcik & Beamon, 2008). Balcik and Beamon (2008),
however, mention that factors such as strong post-disaster demand and local competi-
tion for supplies may increase the local market prices, and therefore, increase the unit
cost of local supplies. Balcik et al. (2009), mention that the challenges of global pro-
curement in the post-disaster environment arise mainly from the time-consuming proc-
esses involved such as competitive bidding and customs clearance. Moreover, transpor-
tation capacity requirements for the large quantities of bulk supplies create challenges
for global procurement.
Another source for relief supplies are in-kind (non-financial) donations, which usually
come available after a disaster occurs. These donations, however, may congest the relief
chain, particularly if unsolicited (Balcik et al. 2009).
After the supply acquisition, the supplies will be transported to distribution centres. Ac-
cording to Balcik and Beamon (2008), humanitarian organizations that purchase the re-
lief supplies in advance strategically pre-position the supplies at distribution centres.
However, only a few organizations use this strategy, due to the uncertainties related to
disaster occurrences, funding, and the costs associated with operating distribution cen-
tres. According to Balcik and Beamon (2008), pre-positioned stock may be held by re-
lief organizations at multiple intermediary levels, such as global, regional and in-
country levels. When food supplies must be brought in from the outside, they should be
obtained as close as possible to the disaster zone in order to minimize transportation re-
quirements (Long & Wood, 1995). The relief organizations, however, usually have dif-
ficulty finding secure, affordable, undamaged warehousing / storage accommodation in
areas affected by disaster (ACFID, 2007). According to Balcik et al. (2009), the trans-
portation is also a major issue for humanitarian relief operations. Post-disaster transpor-
tation, especially to get through the “last mile”, can be challenging for the humanitarian
organizations, due to the damaged infrastructure at the site, limited transportation re-
sources, and the large quantities of supplies to be imported.

13
Figure 2.4 Relief chain structure (Balcik & Beamon, 2009, p. 25).

2.2.2 Disaster categorization

Van Wassenhove (2006. p. 476), defines ‘disaster’ as ‘a disruption that physically af-
fects a system as a whole and threatens its priorities and goals.’ According to Ergun,
Karakus, Keskinocak, Swann and Villarreal (2010), disasters can be divided into two
main categories: natural and man-made disasters. “Natural disasters are the conse-
quences of natural hazards that affect people, whereas man-made disasters are caused
by human actions.” (Ergun et al., 2010, p. 2). A more detailed categorization of disas-
ters with examples is shown in Table 2.1.
Natural disasters include both ‘slow onset’ disasters such as starvation and drought and
‘sudden onset’ such as earthquakes and tsunamis. Moreover, some disasters are cyclical
in nature such as hurricanes (Van Wassenhove, 2006). Disasters can also be categorized
in predictable timing such as floods or unpredictable timing such as earthquakes and
predictable location hurricanes or unpredictable locations such as tsunamis (Ergun et al.,
2010). Oloruntoba and Gray (2006), argue that in order to respond to a sudden-onset
disaster, organizations must obtain agile supply chains, and therefore focus on response
times. Slow-onset disasters, however, enable organizations to focus on cost efficiencies.
According to Rony Brauman, the former Director of Médecins Sans Frontiéres (MSF)
France, from 1982–1994, 97% of operations were devoted to the man-made disasters
such as a terrorist attack and political or refugee crises (Van Wassenhove, 2006). Van
Wassenhove (2006) excludes wars from man-made disasters and keeps them in a cate-
gory of their own since most humanitarian organizations do not get involved while the
fighting continues.

Table 2.1 Disaster categorization and examples (Ergun et al., 2010. p. 1)

Man-Made Natural
Slow onset Political crisis, refugee crisis Famine, drought
Sudden onset Terrorist attacks, chemical Hurricanes, floods, earth-
leaks quakes, tsunamis

14
2.2.3 Disaster timelines and operations
No matter the type of disaster, managing these events typically involves four sequential
stages presented in Table 2.2: mitigation, preparedness, response, and recovery (How-
den, 2009). According to the Asian Development Bank (2004), there is usually overlap
between the activities from different phases during the humanitarian operation, and a
transition phase can be considered between response and recovery phase. Humanitarian
supply chains must provide supplies for the beneficiaries in these phases (Kovacs &
Spens, 2007).
Mitigation is the set of actions, which help to prevent or reduce the hazards of the disas-
ter. It differs from other phases as it focuses on long-term measures for reducing or
eliminating risk (Ergun et al., 2010). The mitigation also involves steps which aim to
increase the resilience of communities to natural hazards in order to reduce the impact
of disasters they cause. Depending on the vulnerability of the community, these may in-
clude activities such as constructing dams and reinforcing buildings against hurricanes.
Implementing these activities requires humanitarian organizations to have logistics sup-
port, however, not on a scale as large as in the other phases (Howden, 2009).
The preparedness phase involves actions required in building the capacity to respond to
a disaster (Howden, 2009). Preparedness activities help the humanitarian organizations
to respond once disaster occurs (Ergun et al., 2010). These include working with com-
munities to ensure they know evacuation options, pre-positioning emergency response
supplies and building organizational capacity to respond to disaster. These activities are
implemented prior to the onset of a crisis. The supplies at this phase are usually less var-
ied, as they are specific life supporting items, such as food, water and medical supplies
(Howden, 2009). The humanitarian organizations must ensure that they have trained
staff and systems and processes needed to support the staff (Kovács & Spens, 2007).

Table 2.2 Disaster timeline and operations (Ergun et al., 2010. p. 3)

The response phase occurs immediately after the disaster, and it focuses primarily on
saving lives and preventing further damage (Howden, 2009). It covers activities in-
volved in mobilizing emergency responders and services for the affected region (Ergun
et al., 2010). During the response phase the operations are most reliant on logistics as

15
they distribute food, medical supplies and other necessities to the people affected by the
disaster. Therefore, the lives are dependent on the speed of logistics activities. Depend-
ing on the scale of the disaster, the response phase may last from days to months (How-
den, 2009).
Recovery is the last phase in disaster management and it involves aiding communities
and helping them to return to the prior disaster conditions. The recovery phase can also
be called a stabilization phase during which restoration of the disaster area is conducted
(Ergun et al., 2010). These activities include distributing supplies for livelihood build-
ing, training people, reconstructing houses, buildings and infrastructure. The recovery
phase may take a period of months to years (Howden, 2009).

2.2.4 Challenges in disaster relief

Balcik and Beamon (2008, p. 102), identify the main and crucial characteristics in hu-
manitarian aid and logistics, which are:
- Unpredictability of demand, in terms of timing, location, type, and size;
- Suddenness of the occurrence of demand in large amounts but with short lead
times for a wide variety of supplies;
- High stakes associated with the timeliness of deliveries; and
- Lack of resources in terms of supply, people, technology, transportation capac-
ity, and money.
The causes, effects and scale of disasters vary largely, and therefore, also the organiza-
tions involved in delivering aid – as well as the challenges they create for the supply
chain (Kovacs & Spens, 2009). According to Fenton (2003), many factors contribute in
creating difficulties in disaster relief. These include the inherently chaotic post-disaster
relief environment, the lack of sufficient resources and infrastructure and the variety of
actors involved in the disaster relief.
The disaster relief efforts are characterized by uncertainty and complexity and therefore,
they need to be properly managed in order to implement better responses. Thus, disaster
management is a key factor for successful disaster relief execution, and it begins with
strategic process design (Tomasini & Van Wassenhove, 2009).

2.3 Performance measurements in humanitarian supply chain

The field of performance measurements and metrics, at an organizational level, has been
the focus of many researchers and practitioners especially in the previous years (Gun-
asekarana, Patel & McGaughey, 2004). According to Poister (2003), performance
measures are objective, quantitative indicators of various aspects of the performance.
On the other hand, performance measurement indicates the process of defining, observ-
ing and using these measures. Neely, Gregory and Plats (1995, p. 1229) define perform-
ance measurement as “the process of quantifying the effectiveness and efficiency of an
action”. Effectiveness is the level to which the customers’ “needs” are covered. Effi-
ciency is how economically these requirements have been covered. A performance
measurement system is an overall set of metrics which are used in order to quantify ef-
fectiveness and efficiency. Metrics are consolidated, in quantitative data that measure

16
the efficiency and performance of an organization and provide information regarding
important issues (Schulz & Heigh, 2009).

2.3.1 Importance of performance measurement

Performance measurement and metrics are essential for organizations since they con-
tribute to setting objectives and evaluating performance (Gunasekarana et al., 2004).
Metrics are necessary to measure operations and gauge improvements. In general, met-
rics are consolidated, quantitative data that inform of important business related issues
(Vahrenkamp & Siepermann, 2005).
Furthermore, the importance of performance measurements cannot be underestimated
since they affect the organization at strategic, tactical, operational and control level.
Moreover, performance measurements not only contribute to setting objectives and
evaluating performance but also to determining future plans and actions (Gunasekarana
et al., 2004). Shepherd and Gunter (2006) state that measuring the performance of the
supply chain can contribute to better understanding of the supply chain and increase its
overall performance. According to Lambert and Pohlen (2001), a well-designed system
of supply chain metrics can increase the chances of success. Moreover, the control of
the processes in the supply chain, which can be achieved through measurement, can in-
crease the performance of the supply chain (Gunasekarana et al., 2004).
One of the key weaknesses of the performance used many organizations is that they tra-
ditionally have adopted a narrow, or uni-dimensional, focus. (Neely, Mills, Platts, Rich-
ards, Gregory, Bourne & Kennerley, 2000). According to Lambert and Pohlem (2001),
there are several reasons that increase the need for supply chain metrics. There is a lack
of measurement systems that capture the entire supply chain. Furthermore, the complex-
ity of the supply chain as well as the significant differences that exist among different
supply chains in different organizations and the increase of competition, as well as the
need for differentiation of the supply chain in order to obtain competitive advantage, are
some reasons that increase the need for supply chain metrics.
As discussed previously, humanitarian supply chains differ from the commercial supply
chains. However, there are some aspects that can be shared in both types of supply
chains. They can include for example the use of performance measurements (Van Was-
senhove, 2006). Poister (2003), states that performance measurements are essential in
the non-profit organization since they can contribute to better decisions, improve the
performance and provide accountability. According to Beamon and Balcik (2008), ef-
fective performance measurement systems can assist humanitarian relief supply chains
in their decisions, to improve their efficiency and effectiveness, and increase the ac-
countability and transparency of their response in disaster situations. Furthermore, the
increase in the level of information sharing among humanitarian organizations and the
various stakeholders as well as the limited amount of resources has increased the neces-
sity for performance measurements in the humanitarian sector (Lindenberg & Bryant,
2001).

2.3.2 Difficulties in measuring performance

In the business sector there is a vast number of different indicators for measuring per-
formance (Gunasekaran & Kobu, 2007; Griffis, Goldsby, Cooper & Closs, 2007). How-
ever, the most difficult part is to select and adopt the most appropriate for the specific
situation and the specific organization. According to Gunasekarana et al. (2004), even

17
though the literature provides a great number of different frameworks related to per-
formance measurements in the supply chain, the practical implementation of them in a
supply chain environment is limited. Moreover, empirical analysis and case studies in
the field of performance measurements in a supply chain environment is also limited.
According to Beamon (1999), the complexity of the performance measurement systems
in the supply chain makes the selection process more difficult. Shepherd and Günter
(2006, p. 274) state that “the complexity of supply chains makes collating and delineat-
ing performance metrics an onerous task.” The level of complexity of the supply chain
is based on the number of echelons and the number of facilities in each echelon (Bea-
mon, 1999). The great number of different performance measurement systems makes
the selection process very difficult.
Furthermore, apart from the difficulties mentioned above, the development of a per-
formance measurement system in an organization is one of the most difficult challenges.
The organization should develop the system based on the metrics that are the most im-
portant for the organization and coordinate them. Moreover, issues such as what should
be measured, how often, by whom and how often the system should be re-evaluated
should also be taken into consideration (Gunasekarana et al., 2004).

2.3.3 Developing performance measurement systems

Managers in different industries are trying to improve the performance of their supply
chains. Techniques such as Just-In-Time (JIT), Total Quality Management (TQM),
Lean production and Enterprise Resources Planning (ERP) have been implemented in
order to manage the supply chain in a more efficient way. Additionally, another way to
manage the supply chain in a more efficient way is through measurements (Gun-
asekarana et al., 2004).
In the literature there are several ways in which to create performance measurement sys-
tems (Neely et al., 2000; Chou, 2004; Wolk, Dholakia, & Kreitz, 2009; Lambert & Poh-
lem, 2001; Schulz & Heigh, 2009; Beamon & Balcik 2008). However, in the humanitar-
ian relief supply chain there are very few examples of implementation of performance
measurements. Most of them are existing tools that are used in the commercial supply
chain and are adopted for the humanitarian organization.
For this research the authors have decided to present Lambert and Pohlem’s (2001)
seven step framework and Schulz and Heigh’s (2009) four step framework. The authors
believe that these chosen frameworks are relevant for this research as they complement
each other and both include elements that can be utilized in humanitarian supply chains.
Seven step framework
Lambert and Pohlem (2001) suggest a seven step framework to create supply chain met-
rics. The framework consists of seven steps and it is based on the link-by-link approach
from the point of origin to the point of consumption in order to maximize the overall
value for the stakeholders.

18
The seven steps are presented below:
1st step: Map the whole supply chain. It should be identified from the point of origin to
the point of consumption with all the possible linkages.
2nd step: Use the customer relationship management and the supplier relationship man-
agement processes in order to analyse each link.
3rd step: Develop profit and loss (P&L) statements to assess the effect of relationship to
the profitability.
4th step: Realign supply chain processes in order to achieve performance objectives.
5th step: Align non-financial performance measures that connect the individual behav-
iour with the supply chain objectives and the financial goals.
6th step: Compare the stakeholders’ value with the objectives and revise the perform-
ance measure if it is necessary.
7th step: Replicate the steps in each link in the supply chain.
In the first step, managers can use the map to identify the different companies and the
linkages with the supply chain. Lambert and Pohlem (2001) state that the key supply
chain linkages are the most critical to the success and therefore, the focus should be on
managing the dyads that have the greatest potential for increasing profitability and de-
veloping competitive advantage.
The use of Customer Relationship Management (CRM) processes helps the organiza-
tion to define how to manage relationships with customers. Through these processes,
key customers are identified and the company work with these accounts to tailor prod-
ucts and services that meet their requirements. Thus, the CRM processes create value by
working with the customers to improve performance.
The development of customer and supplier profit and loss statements, on the other hand
helps the organization to identify how the relationship affects profitability for both
firms.
According to Lambert and Pohlem (2001), profits and losses provide the best measure
of supply chain performance and it can be used to align performance across processes
and between firms. Based on the P&L statements, the organizations should realign their
supply chain processes, in order to achieve performance objectives.
The P&L statements, however, are not alone sufficient to effect improvements in supply
chain performance. It is important to implement supply chain performance metrics also
in the lowest level in the organization. For example, even though, a warehouseman may
not be able to identify how much efficient picking or picking accuracy affects the share-
holder value or profitability, they can focus on reducing order time and errors.
In the last two steps in the framework, Lambert and Pohlem (2001), compare the share-
holder value and market capitalization across firms and replicate these at every link in
the supply chain. Overall performance is determined by the increase in market capitali-
zation for each firm in the supply chain.

19
Four step framework
Complementary to Lambert and Pohlem, Schulz and Heigh (2009) state that in the hu-
manitarian sector the tool must stay as simple as possible. Only the most important key
data should be collected and the collection process should be easy to implement and
fast. Moreover, since the staff in the humanitarian sector comes from a different knowl-
edge background, the necessity for training should stay as low as possible. In coordina-
tion with the Logistics and Resource Mobilization Department (LRMD) of the Interna-
tional Federation of Red Cross (IFRC) they created the Development Indicator Tool
(DIT) which aims to provide a continuing performance improvement of their logistics
units.
The first step is to identify the most important indicators. In that step a categorization of
the indicators might be necessary. For instance different indicators can be categorized in
indicators for customer service, financial control, process adherence and innovation and
learning.
The second step is the improvement of the tool based on the feedback. Questions are
asked such as are the indicators clear to everyone, do they provide the desired informa-
tion, and is the data collected easily. Based on the feedback improvements might be
necessary.
The third step is to pilot the tool. After implementation and the appropriate improve-
ments the final definition and calculation method of every single indicator should be
approved and the final tool should be defined.
The fourth step is the continuing review and training regarding the tool and the indica-
tors. Moreover, different situations might need different indicators. Thus the continuing
improvement of the tool is necessary.
In order for the performance measurement tool to be successful, the indicators should
fulfil some requirements. Schulz and Heigh (2009) list the most important criteria that
can make an indicator successful. The first requirement is validity. The indicators
should present the real performance drivers. Moreover, the information that the indica-
tor provides should be relevant. Cardinality is another aspect which indicates that the
indicator should cover a wide range of key issues. Several indicators are always used if
only one cannot cover the specific issue (completeness). The indicator should allow the
inter-organizational and intra-organizational comparisons. The data that have been used
should be always available in the existing system (compatibility). Finally, a comparison
between cost and benefit of the indicators should be made, in order to identify if the ex-
isting indicator is efficient or not.
The description of the requirements that indicators should have are presented in Table
2.3.

20
Table 2.3 Definition of the indicators’ criteria (Caplice & Sfeffi, 1994).

Criterion Description
Validity The metric accurately captures the events and activities being measured
and controls for any exogenous factors.
Robustness The metric is interpreted similarly by the users, is comparable across
the time, location and organizations and it is repeatable.
Usefulness The metric is readily understandable by the decision maker and pro-
vides a guide for action to be taken.
Integration The metric includes all the relevant aspects of the process and promotes
coordination across functions and divisions.
Economy The benefits of using the metric outweigh the costs of data collection,
analysis and reporting.
Compatibility The metric is compatible with the existing information, material, and
cash flows and systems in the organization
Level of Detail The metric provides a sufficient degree of granularity or aggregation for
the user.
Behavioral The metric minimizes incentives for counter-productive acts or game-
Soundness playing and is presented in a useful form.

Thus, using the appropriate methodology to create a performance measurement system

and taking into consideration the specifications for the indicators, increase the chance to
create a successful tool. The objective of the tool is to improve the performance of the
logistics activities. The indicators are aiming to highlight areas or projects with major
direct or indirect impacts on the business performance. Moreover, the tool measures the
same set of indicators in each regional logistics unit, which makes it possible to com-
pare their scores and exchange ideas or experiences on how to improve certain proce-
dures. The scores can be used for management reports and discussions and be reflected
in strategic decisions. The tool can also enhance transparency between donors and the
humanitarian organizations and it can also become part of unique selling proposition to
donors. In general, the tool should stay simple. Data collection and tool handling should
be very easy, convenient and consume as little time as possible. Furthermore, only key
data should be collected (Schultz & Heigh, 2009)

2.3.4 Performance measurement categorization

The literature provides a great number of different metrics and tools for measuring per-
formance. However, as already mentioned there are several issues that do not allow the
implementation of a specific tool in different situations.
Gunasekaran and Kobu (2007) list key performance metrics in the logistics and supply
chain environment (Appendix 2). These metrics are evaluated through to seven different
features which are: balance score perspectives, components of performance measure-
ments, location of measures in supply chain links, decision level, financial base, meas-
urement base and traditional versus modern.
According to Gunasekaran and Kobu (2007), the internal business process and the cus-
tomer related KPI play a significant role in supply the chain environment. The most
widely used performance measurement is financial performance which represents a key
factor of the KPI. This indicates for example that cost plays a major role in supply chain
environment. However, nonfinancial performance measures are important for measuring
the operational performance. Innovation and process improvement is also defined as one

21
of the performance measures for supply chain systems. According the Gunasekaran and
Kobu (2007) it is possible that many companies either do not measure or researchers
have ignored these areas for measuring the performance. However, innovation and
process improvement measures may have significant influence for overall performance.
From the perspective of components of performance measures, time and productivity
have significant weight in measuring the performance. However, innovation and process
improvement measures may have significant influence for overall performance. In the
location of performance measurements along the supply chain the performance of plan-
ning and product design can constitutes half of the KPIs.
Neely et al. (1995) identify in the literature several tools for measuring performance
such as the Balanced Scorecard, the performance measurement matrix, the performance
measurement questionnaires, criteria for measurement system design, and computer
aided manufacturing approaches. Moreover, Gunasekarana et al. (2004) suggest the bal-
ance between financial and non-financial metrics in the different stages of the supply
chain (plan, source, make, deliver) and consider their effect on the different decision
levels of the organization (strategic, tactical, operational).
According to Shepherd and Günter (2006), there have been a few attempts for the sys-
tematic collation of the measures for the supply chain performance. Most of them are
existing measures that are categorized in different ways. Performance measures have
been categorized as financial or non-financial, quantitative or qualitative, based on what
they measure, cost, quality, resources, flexibility as well as the level of the organization
that they are implemented, strategic, tactical or operational.

2.4 Summary of the literature review

In order to understand the fundamental differences between humanitarian and commer-
cial supply chains, a comparison between humanitarian and commercial supply chains
has been presented. Balcik and Beamon (2008) and Nagurney (2012) discuss that these
differences can be in terms of their strategic goals, customer and demand characteristics,
and environmental factors. Humanitarian supply chains may share similarities with
other supply chains, in terms of structure and logistics activities; however, also differ on
various levels due to unpredictability, and the dynamic and chaotic environment, in
which they operate.
According to Balcik et al. (2009), humanitarian relief environments involve interna-
tional relief organizations, host governments, the military, local relief organizations, and
private companies, which each may have different interests, capacity, mandates and lo-
gistics expertise. Bui et al. (2000) also states that no single actor has sufficient resources
to respond efficiently to a major disaster.
Relief chain structure can be divided into four stages. These are supply chain acquisi-
tion, transportation, pre-positioning/warehousing, transportation and last mile (local dis-
tribution). The operational structure and characteristics of humanitarian supply chains
differ, depending on the type of the disaster and the actors involved (Balcik et al.,
2009).
Van Wassenhove (2006, p. 476), defines “disaster’ as ‘a disruption that physically af-
fects a system as a whole and threatens its priorities and goals“. According to Ergun et
al. (2010), disasters can be divided into two main categories: natural and man-made dis-

22
asters. “Natural disasters are the consequences of natural hazards that affect people,
whereas man-made disasters are caused by human actions” (Ergun et al., 2010, p. 2).
Moreover, according to Ergun et al. (2010), disasters can be divided into slow onset and
sudden onset disasters.
No matter the type of disaster, managing these events typically involves four sequential
stages: mitigation, preparedness, response, and recovery (Howden, 2009). There is usu-
ally overlap between the activities from different phases during the humanitarian opera-
tion, and a transition phase can be considered between response and recovery phase
(Asian Development Bank, 2004). According to Kovacs and Spens (2007), humanitar-
ian supply chains must provide supplies for the beneficiaries in these phases. Balcik and
Beamon (2008) identify the main and crucial characteristics in humanitarian aid and lo-
gistics, which are unpredictability of demand, suddenness of the occurrence of demand,
high stakes and lack of resources.
Neely, Gregory and Plats (1995, p. 1229) define performance measurement as “the
process of quantifying the effectiveness and efficiency of an action”. Performance
measurement and metrics are essential for organizations since they contribute to setting
objectives and evaluating performance (Gunasekarana et al., 2004). The metrics are
necessary in order to measure standardized operations and gauge improvements. In gen-
eral, metrics are consolidated, quantitative data that inform stakeholders of important
business related issues (Vahrenkamp & Siepermann, 2005).
Measuring performance in humanitarian supply chain involves several challenges. Both
in the commercial and humanitarian supply chain, the complexity of the performance
measurement systems, makes the selection process more difficult. Research related to
performance measurement systems in supply chains is one of the newer areas of supply
chain management research (Beamon, 1999). Moreover, the development of a perform-
ance measurement system in an organization is one of the most difficult challenges. Ac-
cording to Gunasekarana et al. (2004), the organization should develop the system
based on the metrics that are the most important for the organization and coordinate
them.
In the literature, there are several ways in which to create performance measurement
systems. For this research, the authors have decided to choose the Lambert and Pohlem
(2001) seven step framework and the Schulz and Heigh (2009) four step framework in
order to describe the development of supply chain metrics. The authors believe that
these chosen frameworks are relevant for this research as they are complementary and
both include elements that can be utilized in humanitarian supply chains.

23
3 Methodology
In this chapter the methodology of the research is presented. The fundamental princi-
ples of business research as well as the stages that were used to finalize the purpose of
the thesis are presented. Moreover, the research strategy and the data collection tech-
niques that were used to collect the data are discussed as well. Finally, the trustworthi-
ness of the research is also discussed in terms of validity and reliability.

3.1 Business research

According to Saunders, Lewis and Thornhill (2009), the terms method and methodology
are not always so clear. They state that the term methodology indicates the theory under
which the research is conducted. On the other hand, the term method indicates the tech-
niques and the tools that are used for the collection and the analysis of the data. The
tools and techniques such as observation, interviews, statistical or non-statistical analy-
sis are discussed later on this chapter.
The term ‘research’ is used to express the idea or the concept which is derived from
those sources (Walliman, 2005). Walliman (2005) identifies three characteristics of re-
search. There should be a clear purpose, and the data should be collected and then inter-
preted systematically.
Business research is the application of the scientific method in search of the truth about
business phenomena (Zikmund, Babin, Carr, & Griffin, 2010). Saunders et al. (2009)
define research as something that people undertake in order to find out things in a sys-
tematic way, thereby increasing their knowledge. Ghauri and Grønhaug (2005), mention
that there are two important phrases in the above definition. The first one is the “sys-
tematic way” which indicates that the research is based on logical relationships and not
just on beliefs. The second one is “to find out things” which indicates that there might
exist multiple purposes for the research. Based on the above, business research can be
defined as the systematic research to find out things in business (Saunders et al.,
2009).The research for this thesis can be classified as business research.

3.2 The research topic

According to Saunders et al. (2009), the first stage after deciding to conduct research is
to formulate and clarify the research topic. The stage of formulating the research topic is
probably the most time consuming (Saunders & Lewis, 1997). However, if the re-
searchers do not spend the appropriate time to formulate a good research topic then they
have fewer possibilities to achieve successful research (Raimond, 1993).
The research topic of the thesis has been formulated after a brainstorming process, per-
sonal experience and knowledge, and a thorough review of the existing literature.
Moreover, aspects such as the time limitations, the financial resources and the personal
capabilities and knowledge of the authors have been taken into consideration in order to
formulate an achievable, realistic, timely and interesting research.

3.3 The literature review

The next stage after formulating the research topic is to critically review the existing lit-
erature (Saunders et al., 2009). Sharp, Peters and Howard (2002), state that the literature
review should be undertaken in two phases. Firstly, in order to help the researcher to

24
generate and formulate the main ideas regarding the research topic. Secondly to criti-
cally review the existing literature and try to identify related theories, models and gaps
related to the research topic. According to Jankowicz (2005), a critical literature review
should be a description and a critical analysis of what has been written by other authors
related to the specific research topic. The related theories and models for the specific re-
search topic of the thesis have been presented in the previous chapter.
According to Saunders et al. (2009), the literature sources are divided in primary, sec-
ondary and tertiary. Primary sources are reports, theses, company’s reports, confer-
ences, and some government publications. Secondary sources are journals, books and
newspapers. Tertiary sources are indexes, abstracts, catalogues, encyclopaedias and dic-
tionaries. The primary sources are more detailed compared to the other types of sources.
For the specific research of this thesis and its literature review, primary, secondary as
well as tertiary resources have been used.
Moreover, according to Bell (2005), it is necessary to identify some main criteria before
reviewing the literature sources. Criteria such as the published language, the published
year, the ranking of the journals, the number of citations of the source, as well as the
relevance with the topic should be identified before starting the literature review. For
this specific research English was the language criterion. The literature research of this
thesis was focused mainly in sources published after 2000 in order to have a more up to
date point of view and due to the recent nature of research in this field. However, some
important sources that have been published earlier than 2000 cannot be ignored. The
number of the citations was also another criterion for the sources selection process.
However, since the topic is current, the available sources with high citations are limited.
Finally, the key words relevant to the topic such as ‘humanitarian performance meas-
urements’, ‘humanitarian challenges’, and ‘KPIs in humanitarian sector’ were used for
this research.

3.4 Research approach

After formulating the topic with a clear purpose for the research and finding the appro-
priate information, theories and models in the existing literature, the next stage is to de-
cide on the research approach that will be implemented (Saunders et al., 2009). There
are two different approaches according to Saunders et al. (2009); the deductive and the
inductive approach.
In the deductive approach the researcher formulates a theory which is to be tested. The
deductive approach is usually used in the natural sciences, since there are basic princi-
ples and laws for the explanation of a phenomenon and the theories can be tested based
on those principles (Collis & Hussey, 2003). According to Robson (2002) there are five
stages in the deductive approach. First the researcher should formulate a hypothesis
which is a testable proposition. The next stage is to express the hypothesis in opera-
tional terms. Then the hypothesis should be tested and the results examined. Finally
modifications in the theory should be made if it is necessary based on the results.
The inductive approach on the other hand is the reverse process. The researcher creates
a theory based on the observations and the results of the research. The inductive ap-
proach is more suitable for exploring and understanding a phenomenon. In contrast with
the deductive approach which is mainly used in natural science, the inductive approach
is used more in social sciences. There are several arguments in favour of and against

25
every approach, however this is not the purpose of the thesis and these arguments will
not be presented. Finally, according to Saunders et al. (2009), a combination of the two
approaches can be used as well. The Figure 3.1 presents the two different approaches.
In the specific research for this thesis, the authors start with an existing theory as a
background. However, the purpose of the research is not to test these theories but to use
them as foundations for the research. Moreover, no hypothesis is created or tested. Fur-
thermore, after the analysis of the data some suggestions and a model are formulated.
Thus, it can be stated that the research contains both inductive and deductive elements.

Figure 3.1 Deductive and Inductive research approaches (Vignali & Zundel, 2003, p. 208).

3.5 Research strategy

According to Saunders et al. (2009) the main research strategies are: experiment, sur-
vey, case study, action research, grounded theory, ethnography and archival research.
Some of the mentioned strategies belong clearly to the deductive approach and some
others to the inductive. However, it should be mentioned that no strategy is superior or
inferior to any other. The best strategy can be defined only in parallel with the research
topic and the research questions. Moreover, the existing knowledge on a topic, the time
limitations and the available resources should be taken into consideration as well before
selecting a research strategy.
Based on the above, the authors decided to follow the case study strategy. Robson
(2002) states that case study is a strategy for doing research which involves an empirical
investigation of a particular contemporary phenomenon within its real life context using
multiple sources of evidence. Yin (2003) distinguishes different case study strategies.
Based on the number of the cases the strategy can be characterized as single case if only

26
one case is researched or multi case if more cases are researched. The second dimension
of distinction is based on the unit of analysis. If a case concerns one organization as a
whole then it is a holistic case study. On the other hand, if more aspects of the organiza-
tion are under research then the case study is characterized as embedded.
The research strategy for the specific thesis is a holistic multiple case study, since the
authors conducted research with various organizations, and concern them as whole
units.

3.6 Sample selection

According to Kothari (2004, p.152), sampling is the process of “obtaining information
about an entire population by examining only a part of it.” In every research, whatever
the research questions and the objectives are, sampling should be taken into considera-
tion. In some types of research, collecting data from the entire population is possible.
However, in business research this is not so easy since there are the restrictions of time,
money and information access. Thus, a representative sample is necessary for the re-
search in order to generalize the results for the entire population (Saunders et al., 2009).
The sampling is a good alternative of census when it is impracticable to research the en-
tire population, when there are budget and time constraints and when the results should
be interpreted quickly.
According to Saunders et al. (2009), there are two different types of sampling. The first
one is defined as probability or representative sampling and the second type as non-
probability or judgmental sampling. In the representative sampling the probability of
each case to be selected is known and equal in each case. Representative sampling al-
lows statistical generalization based on the sample. Representative sampling is com-
monly used is surveys and experiment researches. On the other hand, in non-probability
or judgmental sampling the probability of case selection from the entire population is
unknown and it is impossible to make generalizations based on statistical analysis.
However, generalization could exist in a different way than statistics.
In the specific research a non-probability sampling was used. Furthermore, the sampling
technique used is the purposive sample selection. The purposive or judgmental tech-
nique allows the researchers to decide the sample that they believe can provide the most
appropriate information in order to answer their research questions.
The authors contacted several international organizations and asked them to participate
in the research process. However, due to their time constraints and work overload most
of them replied negatively. Only three organizations replied positively and they ex-
pressed their willingness to participate in the research. Based on the sensitivity of the
topic, the authors had to sign a confidentiality agreement with the organizations, and
therefore the names of the participants and the organizations will not be revealed.
Apart from the international organizations, volunteers working in the crisis zones were
selected as part of the respondents, as the authors believe it is important to collect in-
formation from their perspective as well. According to Red Cross (2011), volunteers
can offer value in humanitarian work in three categories, which are economic value, so-
cial value and value for the communities. They can contribute in the research by sharing
their experience and thereby offer valuable information regarding the challenges faced
in the fields.

27
3.7 Data collection
According to Saunders et al. (2009), there are two different types of data, quantitative
and qualitative. The terms qualitative and quantitative data are commonly used in busi-
ness research. A simple way to distinguish these two categories is that the quantitative
data are numeric data and the qualitative are not. Based on the type of data, the data col-
lection technique as well as the data analysis process are different. Qualitative data are
usually collected through interviews, observations and focus groups. On the other hand,
quantitative data are usually collected through surveys and questionnaires. Moreover,
the analysis technique is also determined based on the type of data. For qualitative data,
processes such as summarizing, categorizing and unitizing data are most common and
appropriate. On the other hand, for quantitative data, statistics and graphs are some
processes for analysing the data. If only one collection and analysis technique is used
then it is characterized as mono method. If there is a combination of them then it is
characterized as multi method (Saunders et al., 2009). The Figure 3.2 below presents the
different research choices.

Figure 3.2 Research choices (Saunders et al., 2009, p. 152).

In the specific research for this thesis a mono method is used and qualitative data was
collected through interviews. According to Saunders et al. (2009), interviews can be
categorized in various ways such as structured and standardized or they may be infor-
mal and un-standardized. Based on the level of formality and the structure, interviews
can be categorized as: structured, semi-structured and unstructured. Semi-structured in-
terviews were used for the data collection of the thesis. A list of questions was used as
an interview guide; however when the authors needed more information about topic ad-
ditional exploratory questions were asked as well. The semi-structured interviews is ap-
propriate for better understanding of a topic and at the same time to help the interview-
ers to stay on the topic due to the interview guide, and collect only relevant information
(Saunders et al., 2009).

3.8 Data analysis

According to Yin (2003), the data analysis part is a complex and difficult and it might
require different strategies and techniques. The suitable selection of strategy and tech-
nique for the data analysis process is very important according to Kumar (1999).

28
For this research, interviews have been used to collect the data. Qualitative data has
been collected, and thus a qualitative analysis process has been used in order to analyse
the data. Qualitative data are non-numeric data, thus statistical analysis is not possible.
However, there are other strategies which are presented later in this section which allow
the analysis of qualitative data.
Before starting the analysis, all interviews were recorded in order to save the data and
make it available for analysis. All interviews were transcribed and have been sent back
to the interviewee in order to verify that what was written was actually what he or she
means. After that the data was summarized, structured based on the questions, and cate-
gorized. Furthermore, relationships among the data and the existing literature have been
identified as well. After these processes a conclusion is drawn and the answers to the re-
search questions and to the purpose are presented.

3.9 Reliability and validity

One of the most important issues in any kind of research is the quality of the data. Ac-
cording to Crowther and Lancaster (2009), reliability and validity are the most essential
criteria to evaluate business research.
With the term reliability Crowther and Lancaster (2009), define the possibility that the
data collection process will provide the same results in different occasions. Saunders et
al. (2009, p. 156), state that there are three questions, which the researcher can ask in
order to identify the reliability of the collected data and their consistency. These are:
 Will the measure yield the same results in other occasions?
 Will similar observations yield the same results from other observers?
 Is there transparency in how sense was made from the raw data?

According to Robson (2002), there are four threats to reliability. Subject of participant
error is the first one which indicates that different times of conducting the research
might generate different results. In order to avoid the first threat Saunders et al. (2009)
suggest conducting the research in neutral moments. The second threat is subject or par-
ticipant bias. Interviewees might provide the information have been told to by their su-
periors. The third threat is the observer error which means that different observers have
different perceptions regarding a topic and also ask questions in a different way. The
last threat is the observer bias which indicates the different ways of interpreting the re-
sults. However, both researchers were attending the interview session in order to mini-
mize the threat of the observer bias.
According to Saunders et al. (2009), validity refers to the extent to which the findings
are about what they appear to be. It is also related to the extent to which data collection
method is appropriate and if it measures what it measure. Different data collection tech-
niques and strategies were evaluated in the beginning of the research for this thesis in
order to guarantee higher level of validity.

29
4 Empirical study
The following chapter presents the findings from the empirical study.
For the empirical study, the authors have collected in total five interviews from three
different organizations operating in the humanitarian aid. All of these humanitarian or-
ganizations have offices in several countries and they operate internationally in various
crisis zones. The authors have decided to interview the representatives of these organi-
zations in Greece and Sweden. As mentioned previously, volunteers are an important
part of the humanitarian organizations, since they are involved in the field operations
and they can contribute in the efficiency of the operations. Thus, the perspective of the
volunteers should not be ignored. The authors have also decided to conduct interviews
with two volunteers. Even though the knowledge of the volunteers might be limited re-
garding performance measurement tools and KPIs, they can provide valuable informa-
tion regarding the problems and challenges they face in the fields. In the first part of the
empirical study, findings from organization A, B and C have been presented. This is fol-
lowed by interviews of the two volunteers working in the fields. A summary list of the
interviews is given in Table 4.1.
Table 4.1 List of interviews

Organization / Type Interview Duration Date

Volunteer
A Medical Care Phone 58 min 29/03/2013
B Medical Care Phone 34 min 09/04/2013
C UN Face to Face 47 min 22/04/2013
VA Volunteer Face to Face 23 min 02/04/2013
VB Volunteer Face to Face 21 min 02/04/2013

4.1 Interviews
4.1.1 Organization A
The first interviewed organisation operates in the field of medical aid. The interview
was conducted by phone and person working in the administrative department was cho-
sen as respondent. The background of the organisation, the issues regarding the organi-
sation’s supply chain the supply chain and performance measurements are presented in
this part.
The background
According to the respondent interviewed at Organization A and the background docu-
mentation made available, the organization is operating in emergency situations and fo-
cusing on medical care. The organization consists of various autonomous and independ-
ent departments but all of them are co-operating under the central coordination of the in-
ternational headquarters. These departments are responsible for the finance of the opera-
tions, the recruitment of the most appropriate people as well as the communication
among the different operations and countries. Apart from the administrative depart-
ments, operational departments exist as well which are responsible to “open and close”
operations and to supervise the action of these operations during their time of existence.

30
The financial resources of the organization are derived from private sources, such as
members of the organization and donations, at 80% and from institutional funders such
as the European Union and the government at 20%. According to the respondent, “the
specific percentages are made in such a way to keep the organization independent from
various governments and institutional communities. During the last 3 years, the finan-
cial sources of the organization have been reduced because of the financial crisis and
that has made our operations more difficult.” However, people continue to donate
money in spite of their personal financial difficulties and this is very positive for the or-
ganization since as the respondent mentioned “the situation could be even worse, but we
prefer to see the positive side, that the people continue to donate and help”.
The supply chain and stakeholders
The stakeholders that are getting involved with the organization are the donors, the sup-
pliers, the governments, the local people in the various fields and the volunteers.
In order to be able to operate in a specific field, supporting elements such as logistics,
financial support and control, and the appropriate human resources are necessary. There
are two central warehouses located in central Europe, responsible for the supplies and
ready to provide supplies for operations. Moreover, pre-stocking of kit boxes in specific
regions is also a strategy in order for the organization to able to respond in the first 48
hours. According to the respondent, “the two central warehouses are responsible not
only for the supplies in case of emergency but also for the development of the specific
packages that are easy to transfer and fulfil specific requirements.”
The problems and challenges
The challenges vary among different organizations depending on their scope. Moreover,
the administrative, the operational and the supporting activities also have different chal-
lenges. Furthermore, every disaster is not the same and the organization has to deal with
different issues each time. According to the respondent, ”challenges such as the physi-
cal access in the different fields, the access to health sector and the access to medicines
are the most common for our organization. “
Especially the access to medicines is very important and there are a lot of problems in
that field. For instance, there are some tropical diseases which are called “forgotten dis-
eases” for which the medicine production has been stopped. The reason for that is not
the small percentage of the affected people but because of the low profitability for the
pharmaceutical industry. According to the respondent, ”the pharmaceutical industries
are focusing more on the development of medicine for the western world and not for the
developing countries.“
The cost of the medicines is also a major problem for the organization as well. Accord-
ing to the respondent, “there are some specific medicines which cost more than EUR
10,000 per year for a patient and that amount of money is extremely high for some
countries and people to afford.” Substitute medicines are used, which do not belong
under a patent but with the same ingredients and efficiency, in order to reduce the cost.
However, that creates another problem between the organization and the pharmaceutical
companies.
In the field of logistics there are several problems as well. Customs’ regulations, big
cargos, specific medical constraints in different countries, the absence of appropriate in-

31
frastructure, war zones and robberies are some of the main problems that the organiza-
tions faces in the field of logistics. Furthermore, regarding infrastructure problems the
respondent mentioned “sometimes it is very difficult to find places with the appropriate
conditions to store the medicines”. Moreover, another issue is that the supplies should
be transferred to the people since the people most of the times are not able to move to
the location of the supplies. Thus, the continued movement of the supplies is also an-
other challenge.
There are also challenges related to the donations. According to the respondent, “usu-
ally people want to donate materials, such as medicines and water. It is difficult to ex-
plain that the supplies that our organization sends to the operation fields are totally dif-
ferent in terms of packaging, way of using and other requirements. For instance, it is
impossible to send commercial bottles of water to the field of emergency.”
Furthermore, in order for the organization to be able to provide all necessary informa-
tion to the stakeholders, a complex system has been created. On the one hand, it is posi-
tive since it can provide all the relevant information. On the other hand, it makes the or-
ganization less flexible.
The performance measurement system and KPIs
There are several KPIs for the different functions of the organization. There are KPIs
for medical operational activities, logistics activities, human resources activities, finan-
cial activities, and general KPIs for the operation in total.
First of all, the financial control of the organization is the main focus. According to the
respondent, “accountability is very important for our organization since we have to
provide the appropriate information to their donors. They should provide information
not only about how we spend the money but also to explain and support why we take the
specific decisions.” Furthermore, the nature of the organization, medical care, increases
the need of accountability since they have to deal with people and not with infrastruc-
ture.
Even though, the nature of the constitution of the organization does not force on it fi-
nancial control, the organization demands annual financial control by accountants in or-
der to guarantee accountability firstly for the organization and secondly for their stake-
holders.
The ratio of the financial sources (80%-20%) is also used for the expenses of the or-
ganization. According to the respondent, “the 80% of the expenses are going to the op-
erational departments in order to fund the various operations and the rest 20% to the
administration departments.” The organization uses various KPIs based on that ratio in
the various departments. However, sub-KPIs are also used in the sub-departments of the
organization, based on the ratio 80%-20% as well.
The organization operates in more than 60 different countries and every operation is
considered a different project. Thus, the operations are project management oriented.
Even though the organization might operate several years in a specific region the pro-
jects are shorter in terms of time. Every project has different objectives and sub-
objectives and there are different indicators for every objective. For instance an objec-
tive might be to reduce the death rates of a specific disease, in a specific region, in a
specific time. Then, the whole project is organized based on the specific objective.

32
The evaluation of the KPIs occurs two times per year and they are modified if this is
necessary. However, there are specific KPIs which are evaluated every month. Accord-
ing to the respondent, “the general KPIs of every project are evaluated two times per
year. However, medical KPIs are evaluated every month in order to control and prevent
undesirable situations.“
Since the main focus of the organization is the operations, operations are also the basis
of evaluation. According to the respondent, the evaluation starts from the operation
fields and concludes in the administrative departments. The evaluation starts from the
field coordinator who evaluates the persons in the field by using an evaluation form. Af-
ter that, there is a coordination team which is responsible for the evaluation of the pro-
ject and on the top of the evaluation process is the head of mission who evaluates the
whole program. The total evaluation of the program is related to whether the program
was relevant to the needs.
Regarding the human resources, indicators such as the relevance of the academic de-
gree, the years of experience, the foreign languages that the person can speak and the
minimum of 9 months of availability are used for the evaluation of the staff. Moreover,
the staff is evaluated not only on what he or she is doing but also how. The way the staff
operates should be suitable with the principles of the organization.
Finally, the performance measurement tool and the various KPIs should be connected
directly with the processes to try to improve them. According to the respondent, “the
numbers are useless without the processes and this is what the performance measure-
ment tools should do, to improve the processes. The KPIs should be relevant and the
tools easy to be used and be implemented in emergency situations.”

Table 4.2 The main elements of the interview 1

Challenges Stakeholders KPI’s and measures

Financial resources Governments Project based measures
Disaster variations Permanent staff Medical
Unpredictability Volunteers Logistics
Location access Local people HR
Lack of medicines Transportation companies Financial
Cost of medicines Suppliers
Customs regulations Desired characteristics
Big cargos Should be relevant
Medicines constrains Easy to implement
Infrastructure Fast
Theft No necessity for training
Safety
Donations of inappropriate
materials
Accountability
Complex financial control
system
Media

4.1.2 Organization B
In order to get more information related to the research topic and compare the data, the
authors contacted another humanitarian organization in the field of medical aid. The in-

33
terview was conducted by phone and a person from the administrative department was
chosen as respondent. The background of the organization, the objectives, the main ac-
tors involved with the organization as well as the processes of measuring performance
are presented in this part.
The background
The organization B is an international NGO operating primarily in the health care sector
in the humanitarian field. The purpose of the organization is to provide first level health
care services to people who do not have the capabilities to visit public or private hospi-
tals. According the interviewee “these people might be: refugees, immigrants, people
without health insurance and poor people without access to the public health system”.
The organization aims to cover all the needs in the health sector for the target group.
Moreover, the organization operates also in the social and psychological field offering
support for the people in need and provides food packages for poor families. However,
the main purpose of the organization is related to the health care services.
The organization operates internationally in various locations in the world; however, the
department that participated in this research is currently running two international pro-
jects, and focusing the rest of its resources in Greece, due to the increased need of aid in
Greece. “The financial crisis has increased the needs for medical care in the country”,
adds the respondent.
The supply chain and stakeholders
The main stakeholders involved with the organization operations are donors, organiza-
tion members, medical and food suppliers, various local and international companies,
volunteers, the EU and permanent employees. The organization has medical centres in
primary locations in large cities; however, there are also mobile units which reach peo-
ple in remote locations. The organization keeps the medical supply stocks in each medi-
cal centre.
The problems and challenges
The access to financial support is one of the main challenges the organization faces. In
the past years the Greek government has stopped providing financial support to the or-
ganization due lack of financial resources caused by the financial crisis. However, the
donations by people have increased especially in materials and medicines. According to
the respondent “this is a very positive and impressive phenomenon”.
Another challenge the organization faces due to the financial crisis is the increased
number of people who do not have access to the public medical care system. Thus, the
organization has to provide medical care to an increasing amount of people every day.
Furthermore, the lack of employees and volunteers is also a significant challenge for the
organization. As the need for medical care has increased, the current amount of staff and
volunteers working for the organization is not enough to cover all these needs. More-
over, in order to help as many people as possible, the organization has to run a large
amount of projects, something that increases the need for additional staff.
“The ideal is to help the people in the way so they would not have to repeat and come
back for requiring help”. The organization has also a special program for immigrants
and refugees, which provides accommodation and rehabilitation facilities for up to six

34
month period. This program aims to rehabilitate the patients so they can become inde-
pendent from constant help.
The performance measurement system and KPIs
The organization does not currently use any specific performance measurement tools.
As the participant mentioned “we do not work as a company but as a society”. How-
ever, they keep records of statistical data but until now they are not utilizing the data for
any further use, such as setting targets or measuring their supply chain performance
based on those targets. The statistical data collected is mainly general demographic in-
formation related to the age and country of origin. Furthermore, according to the re-
spondent, “most of the data cannot be collected real-time. This is due to the lack of staff
and volunteers and it is very challenging and time consuming to use any tools for meas-
uring performance.”
The collected data can provide only basic statistics; however, it is not as detailed as they
would hope for. The respondent stated that more gathered information regarding their
operations could be useful for enhancing their overall performance. For example, the
amount and the use of the medicines provided from the organization is something that
the organization would like to measure.
Table 4.3 The main elements of interview 2

Challenges Stakeholders KPI’s and measures

Financial resources Donors Statistics
Financial crisis Permanent staff Demographic
Increase need for their services Doctors Not systematic data collection
Lack of staff Volunteers Not real time
Lack of volunteers Suppliers
Large amount of various pro- International companies Willingness for measure the
jects Governments medicines’ quantities
Location access EU
Transport of medicines

4.1.3 Organization C
The third interview was conducted by face to face. The participant, selected for this in-
terview has over 40 years of logistics and supply chain experience in humanitarian or-
ganizations. He joined the organization in the mid-eighties and most of his professional
career he has been working abroad in various crisis zones worldwide.
The background
The organization C is an international organization, operating under United Nations and
providing long-term humanitarian and developmental assistance to children and mothers
in developing countries. The backbone of the organization is healthcare, education, wa-
ter sanitation, and child protection. The organization C has been involved in working in
emergencies, both natural and man-made since its establishment almost 70 years ago.
Originally, the organization was established to provide humanitarian assistance to chil-
dren living in a world shattered by the Second World War. Today it operates in more
than 150 countries and territories and is funded by governments, individuals’ voluntary
contributions, foundations, non-governmental organizations, and corporations.

35
The supply chain and stakeholders
The main stakeholders involved with the organization are governments, donors, suppli-
ers and volunteers. However, governments are the closest partners as they act as an host
for the organization. The interviewee states that they do not implement themselves, but
rather implement through UN and through UN’s other programs: “thus we are not an
implementing agency but rather funding agency”. According to the interviewee, every
UN agency has their own mandates, and thus food deliveries are left to other UN or-
ganizations and not the specialisation of Organization C.
Humanitarian supply chains are very complex, and therefore in order to ensure delivery
of supplies to children in conflict or disaster zones requires collaboration, technical
know-how and financial resources. The organization C’s supply chain involves four
main steps which are planning, procurement, logistics and delivery, and monitoring and
evaluation. According to the interviewee, “every link of the humanitarian supply chain
is essential in order to ensure the supplies reach children.” The planning includes two
steps: definition of needs, and budgeting and planning. The organization C design to-
gether with the local government program and decide which type of supplies are
needed. After this step, budget and scheduling when the supplies are needed is identi-
fied. According to the respondent, planning and forecasting are usually done years
ahead. At the procurement level, the organization uses tendering in order to get the best
value and quality of the supplies. Furthermore, at the procurement stage, the purchase
orders are issued. According to the respondent, there are four different ways to procure
supplies. Firstly, it is usually the field office that initiates the procurement and decides
where the supplies are procured from. The respondent usually did the procuring locally.
Moreover, according to the respondent, “the procuring can also be done as direct or-
der, which means that the organization’s head office has made contracts with suppliers
all over the world and field offices can choose the suitable suppliers from the existing
database. For example, if we need a motorbike for the fields, we use the head office’s
existing database to find supplier and procure the motorbike from them. This makes our
work easier as we do not need to get an additional approval from the head office to use
the supplier”. Another way to procure is that the field office acquires the supplies
through the head office’s warehouse. According to the respondent, “these types of sup-
plies are usually basic supplies that exist in warehouse stock and acquired in advance.”
After procuring the supplies, they are picked up from the suppliers, transported and cus-
toms clearance done at the port of entry. According to the respondent, the organization
has a global forwarding agreement with one multinational logistics company, and there-
fore organisation does not negotiate rates for example with shipping lines or airlines.
The logistics company ship the supplies to the port of entry, where quantity, condition
and quality of the goods received is checked.
After inspection, the supplies are moved through a series of in-country storage points
for delivery to beneficiaries. Finally, the whole supply chain is monitored and evaluated
in order to ensure right quantity, on-time delivery and if the supplies fit-for purpose (did
they meet the need).

36
The problems and challenges
According to the respondent, Organization C is dealing with various challenges
throughout their operations and supply chain. “The challenges have changed over the
years, however we are nowadays much better organised than before and we cooperate
with other stakeholders more efficiently than ever before. We used to work very much in
isolation from other organizations.” The respondent states that cooperation with local
governments creates the biggest challenge as “they do not usually ‘work well’ and are
very weak in terms of stability”.
Furthermore, financial crisis has had an effect on the operations. “Nowadays, we re-
ceive less of money from individual donors. However, from the government point of
view, the money is there. Most United Nations member states have committed money
over longer period of time in their budgets. Therefore, our organization has not suffered
too much in terms of financial crisis.”
Organization C’s supply chain operates quite efficiently, however, the problems usually
starts to occur when the supplies reach the port of entry. According to the respondent,
port of entry creates serious problems all over the world. These problems are related to
lack of container handling equipment, lack of assistance from the port authorities and
corruption issues. “For example before the shipping documents are presented to the
custom officials in the port, they usually have to go through several ministries. It can
take up to several weeks before the supplies can be transported further from the port.
This can affect the organization’s operational efficiency and create additional costs.”
Another problem that the organization is exposed to is related to the countries that are
land locked. “For example Uganda’s port of entry is Djibouti and when the destination
country is land-locked, the organization deals with an additional government just for
port handling. This creates again additional problems related to bureaucracy and cost
time and money.”
Furthermore, according to the respondent, measuring the impact of the aid creates chal-
lenges. “We need to make sure whether the aid actually reaches the beneficiaries and
what is the impact of the aid to them. This is, however, sometimes extremely difficult
and depends very much on the type of the intervention. For example our immunisation
program, where we inject insulin for the beneficiaries, it is quite easy to measure the
impact and keep record of how many beneficiaries are injected, as we usually immunise
the beneficiaries by ourselves. However, when it comes to for example distributing high
protein food products for the beneficiaries, it is sometimes very difficult to measure the
impact. Usually, this type of product is distributed from the health post to a mother of a
child. From that point onwards, you cannot control whether the product actually reach
the child. Some commodities are easier to sell than others and the high protein product
is always out of the market. However, we always try to find where the leakage is. In
most cases it is the mother who sells the product to get money.” Organization C also
faces challenges related to thefts. The respondents have witnessed for example very
valuable truck loads disappearing. Thus, the organization has to prepare sufficient secu-
rity arrangements.
As mentioned earlier, planning and forecasting are usually done years ahead. “Our or-
ganization makes various emergency preparedness plans and potential crisis scenarios
and exercises what is reasonable to expect. Whether it is earthquake, flooding, civil un-
rest or drought, we create different scenarios for humanitarian crisis and try to preposi-

37
tion our emergency supplies accordingly. The problem with the prepositioning of sup-
plies is that most of them have an expiry date. Thus, it is necessary to have a rotation
for the prepositioned supplies” Moreover, according to the respondent; it is always hard
to plan in advance for the emergencies as “you really don’t know what hits you the end
of the day. The plans are there, however, it is still extremely difficult to make estima-
tions and prepare for the crisis. Often you have to re-evaluate and re-plan when the ac-
tual crisis occurs.”
Another operational challenge is related to governments’ lack of cooperation. For ex-
ample in 2009 Ethiopia had a crisis which included children dying from hunger and lo-
cal government refused to acknowledge it. “As it is government’s decision to declare
the emergency, we cannot do much before that. Therefore, our organization is regional
head went to BBC and gave them information about the crisis. After the BBC reported
about the issue in global news, the Ethiopian government did not have any other choice
but to recognize the problem. Thus, there are other ways to push the governments to
take the initiatives.”
The performance measurement system and KPIs
According to the respondent, Organization C has been using performance measurements
for many years, however, their use have come gradually. “20-25 years ago the organi-
zation was still quite small and when I joined the organization in the beginning of
1980s, there were only approximately 4000 employees. Today the organization employs
around 50 000 people, and therefore it has become even more important to measure
performance.” Nowadays, the organization measures its performance in various organ-
izational levels. According to the respondent, these include measures related to per-
formance of suppliers, personnel and governments, financial performance, the impact
on beneficiaries and lead-time performance. The respondent highlights the importance
of personnel performance for the organization. “In particular measuring your own per-
formance is very important. The organization has done this for a long time. It is called
personal evaluation that is done once a year with the supervisor. However, in partner
evaluation, we were probably quite weak 20 years ago. Few years ago we have also
started to implement balanced score card to evaluate our suppliers’ performance.
Nowadays, also supplier evaluation is very important”
According to the respondent, it is sometimes very difficult to measure the performance
of governments as they are not always willing to share information regarding perform-
ance issues. We also measure the distribution of the medical supplies and their impact
on the beneficiaries. “In most host countries, the healthcare aid is divided into four dif-
ferent levels. First the medicals are usually distributed to a regional/district warehouse.
From there, the medicals are distributed to central medical centres. Depending on the
country, some of the medicals can be sent to regional hospital or to local health centres.
In the lowest distribution level, there is a health post, where you usually have two local
people from the village to whom we give very basic training to distribute the medicines
to the beneficiaries. The more you go down in the distribution, the more challenging it
becomes to measure the impact. You really need to rely on government setup to reach
all these points in the supply chain.”
According to the respondent, the performance measurements depend on the type of dis-
aster. “In measuring performance in humanitarian supply chain, there is a lot of differ-
ent themes. We have to measure for example our own organizational performance. Fur-

38
thermore, also partners’ performance is important to measure, which is sometimes
challenging as in many occasions they do not allow it. They might not provide us the
data needed to measure the performance”.
In the Europe headquarter, the organization have an emergency unit, which measure
every shipment that goes from Europe to the host country. “They measure everything
from the point of the procurement request is coming from the emergency country, all the
way up to the delivery at the port. We have good systems to support the tracking of our
shipment, and therefore we know exactly where our shipments are. However, as men-
tioned before, the challenges start when the shipments arrive to the port of entry. In Si-
erra Leone, we had systems to measure the efficiency of the local officials and the time
for the documents to go through the officials and the time it takes to port of entry to give
us approval and release the shipments. This is one way we try to improve lead-time is-
sues.” According to the respondent, there is not a single system to measure performance
in the host countries, but it rather differs from country to another.
Table 4.4 The main elements of interview 3

Challenges Stakeholders KPI’s and measures

Unpredictability EU Supplier evaluation
Planning Governments Staff evaluation
Forecasting Donors Government evaluation
Safety Suppliers Partners evaluation
Complex supply chain Permanent staff Disaster based metrics
Financial resources Volunteers Financial
Financial crisis Logistics providers Time
Lack of transportation
capacity
Lack of equipment
Location access
War zones
Bureaucracy
Corruption
Theft
Lack of co-operation and coordi-
nation
Information sharing
Media

4.1.4 Volunteer A
The background
The first volunteer participated in a project organised by a Swedish humanitarian NGO.
The organization recruits people mainly from Sweden and has operations in South Af-
rica. The organization focuses mainly on youth projects in schools and kindergartens.
The organization has operations also in Sweden but as the participant mentioned: “In
Sweden the operations differ from the ones in South Africa, since the needs between the
countries are significantly different”. The organization provided the local schools and
kindergartens clothes, blankets and food supplies and also participated in educating the
children and offering them social activities. The project took place in a period during
the winter when people were suffering in the cold and therefore the need for warm
clothes and blankets were high.

39
The supply chain and stakeholders
The main stakeholders involved with the organization were the Swedish donors, South
African government, local Cape Town authorities, volunteers and suppliers. The volun-
teer mentioned that it was more cost efficient to buy the supplies from the local suppli-
ers since they were cheaper and also they had the advantage of the currency differences.
Moreover, even though the organization is receiving clothes from Swedish donors, it is
more cost efficient to buy the supplies from local suppliers due to the expensive ship-
ping costs. Thus, the organization tries to sell the donated clothes in Sweden and use the
profit to finance the projects. Furthermore, the participant mentioned that “buying new
products there instead of bringing second hand from Sweden is cheaper even though it
is not the most sustainable alternative”.
The problems and challenges
The issues regarding the safety in the field was one of the main challenges that the vol-
unteer faced in South Africa. As the volunteer pointed out “Cape Town is kind of known
for being unsafe”. They had to rely on local volunteers when travelling in the country,
since it was not safe for them to travel alone. Moreover, they pointed out that the vehi-
cles used for transporting the volunteers had to have dark windows in order not to be
recognised as being foreigners.
Regarding the infrastructure, the volunteers did not face significant problems. They
were operating in Cape Town which provided all the supplies needed for the aid. More-
over, the quality of the roads was good, and therefore they did not have any challenges
in accessing the fields. Communication between the Swedish organization and the local
officials was also working well.
The limited financial budget also created challenges for the volunteers. They had a spe-
cific amount of money to spend and they tried to spend the money as efficiently as they
could. Moreover, they had to provide specific information on how they spent the money
each time. As the volunteer mentioned “we had to take a picture every time that we
bought something in order to explain how we spent the money”. This process made their
operations less flexible and more time consuming.
Moreover, they had to provide daily reports for the Swedish organization, something
that was really time-consuming. As the volunteer mentioned “it was very time consum-
ing to sit every night and write a report about what we did and how we did it in order to
prove what we did”.
Furthermore, issues related to bureaucracy existed as well. As the participant mentioned
“the reason why Cape Town is called mother city is because everything takes 9 months
and also the papers that we needed took so long”. Sometimes they had to wait a long
time to obtain necessary documents needed for proceeding with the operations.
Additionally, corruption created challenges for daily operations in the field. The volun-
teers tried to avoid getting too much involved with the locals in order to avoid dealing
with corruption. As the participant mentioned, “Unfortunately corruption exists in Cape
Town. The reason why we tried to avoid cooperation with local authorities, is that some
of them are not interested in helping the local people but rather make profit for them-
selves.”

40
The performance measurement system and KPIs
According to the participant, the organization did not use any performance measurement
tools for their operations. The volunteers were not been evaluated by someone neither
did they evaluate someone else. However, they sometimes had to prove to the donors
how they spend their money. Thus, the only area of evaluation was their financial ex-
penses. Furthermore, another way for donors to control their expenses was through bank
account statements. For instance, if they wanted to donate specific supply, then they do-
nate straight through their bank to the account of the store that the supply was about to
be purchased. The volunteer mentioned also that “it is not fun to have to complete a
form every day about what you have accomplished”. Moreover, the participant men-
tioned that as a volunteer you do not want to feel the pressure of evaluation.
The most important for the volunteers was “to see the fire in their eyes again” and this
is something that you cannot measure. They tried to make children happy without fo-
cusing on numbers and measures.
Table 4.5 The main elements of interview 4

Challenges Stakeholders KPI’s and measures

Safety Donors Financial mainly
Bureaucracy Government Time consuming
Financial resources Local authorities Unwilling to be evaluated
Corruption Volunteers
Suppliers

4.1.5 Volunteer B
The background
The second volunteer participated in a school project for one year and at the end of the
project they visited Tanzania in order to help and participate in humanitarian activities.
The project was organized by their high school. The purpose of the project was so that
the students would learn how to be active in helping people and gain an experience in
humanitarian work. In Tanzania, they visited various families, mental hospitals and
prisons in order to provide food, clothes and toys to children.
The supply chain and stakeholders
The team was autonomous and they had limited co-operation with other humanitarian
organizations or authorities. They had their own budget and based on that they bought
the appropriate materials from the local market and provided them to the people. As the
volunteer mentioned “it is cheaper to buy products there instead of buying them in Swe-
den and transport them in Tanzania”.
The problems and challenges
Regarding the infrastructure, there were several problems, since sometimes it was very
difficult to move the products due to the poor last-mile conditions, especially in small
villages. In the small villages they did not have internet connection and sometimes it
was difficult for them to be in contact with the relatives and their high school. However,
as it was a school project and the safety was the main concern of the project leader, they

41
did not visit crisis zones. As the volunteer mentioned “there were some safety issues but
not in an extent that we had to worry about”.
Financial problems exist as well. They had a limited budget and with that money they
had to provide as more products as they could to the people. They tried to spend the
money in an efficient way and as the participant mentioned “in a way such as to satisfy
as more people as we could”.
Moreover, issues related to communication existed as well. Even though English is one
of the official languages in Tanzania, there were people who could not communicate in
English but rather use their own local language such as Swahili. Thus, it was difficult
sometimes to communicate with them.
The performance measurement system and KPIs
Regarding the performance measurement system and evaluation, the volunteer men-
tioned that they did not use any specific process in order to evaluate their work and pro-
gress. Moreover, according to the volunteer “since we were volunteers and we did not
earn money for our work, there was no reason to be evaluated”.
Table 4.6 The main elements of interview 5

Challenges Stakeholders KPI’s and measures

Unpredictability Donors Unwilling to be evaluated
Infrastructure Government
Location access Local authorities
Communication Volunteers
Safety
Bureaucracy
Financial resources
Corruption

42
5 Analysis
In this chapter, the analysis of the thesis is presented. The findings from the empirical
study will be analysed and connected with the theoretical framework.
The analysis chapter connects the empirical data with the theory presented in the litera-
ture review. The analysis is organised in two parts based on the research questions. The
first part is related to the challenges the humanitarian organizations face in their supply
chains and the second part related to the performance measurements. Furthermore, a
comparison between commercial and humanitarian supply chains is necessary to under-
stand differences among them. Moreover, comparison of the two supply chains is cru-
cial in order to understand that the existing theories related to commercial supply chains
is not always fully applicable in the humanitarian supply chains (Nagurney, 2012).
The first part is organized based on the timeline of the disaster, and analysed in pre-
disaster, and combination of disaster and post disaster phases (Ergun et al., 2010). The
authors decided to combine the challenges in disaster and post-disaster phases since ac-
cording to the empirical findings both phases share similar challenges in humanitarian
supply chains.
The second part, presents a model for creating a performance measurement system
which includes elements from both Lambert and Pohlem’s (2001) seven step frame
work and Schulz and Heigh’s (2009) four step framework. It is based on the different
types of disasters, the different types of organizations and their stakeholders. Moreover,
it highlights the main characteristics that a performance measurements system in the
humanitarian sector should have.

5.1 Humanitarian versus commercial supply chains

According to Balcik and Beamon (2008), humanitarian supply chains and commercial
supply chains differ in terms of strategic goals, customer and demand characteristics
and environmental factors. Moreover, Whybark, Melnyk, Day and Davis (2010) also
state that the operational environment of the humanitarian supply chain and the com-
mercial supply chain differ significantly as well. However, there are some common ac-
tivities between humanitarian and commercial supply chains in terms of procurement,
the use of logistic providers and inventory handling. The organization A uses two cen-
tral warehouses in Central Europe and creates long term relationships with their suppli-
ers and third party logistics providers. Moreover, they use third party logistics provid-
ers to pre-position stocks in desired locations. Organization B uses local medical centres
for their inventory and they procure their supplies from suppliers and receive supplies
also through donators. Organization B also uses third party logistics providers to trans-
port and stock the supplies to desired locations. Organization C procures supplies in
four different ways. They can be done locally, through field office, as a direct order, or
acquiring the supplies from the headquarters’ stocks. Both of the volunteers mentioned
that they procure their supplies mainly from local suppliers as it is more cost efficient
than transporting donated goods from sending countries. Moreover, the respondent’s
organizations implement activities such as scheduling, budgeting, financial control and
forecasting, which are similar to commercial supply chains in terms of their general
characteristics.

43
According to the respondents, the activities in the humanitarian supply chain in the pre-
disaster phase are slightly similar with ones in the commercial supply chain. Identifying
suppliers and creating long term relationships with them, procurement, warehousing and
transportation and pre-positioning inventory to desired locations, are some of the com-
mon activities with both commercial and humanitarian supply chains. Moreover, finan-
cial control, scheduling, budgeting, recruiting are also some common activities.
However, from the disaster phase onwards, the differences between commercial and
humanitarian supply chains become more significant. In the commercial supply chains,
the organizations have to deal with predetermined set of suppliers, manufacturing sites
and somewhat predictable demand. These terms are not the same for the humanitarian
supply chains (Cassidy, 2003). Oloruntoba and Gray (2006), mention that the humani-
tarian supply chain is unstable especially in the last mile distribution. Beamon and Bal-
cik (2005), mention about the unpredictability of the final destination. Nagurney (2012)
highlights that from when the disaster occurs, the lead times are close the almost zero
lead times from the moments that the disaster occurs. Murray (2005) mentions that in
some cases such as wars, forces try to block the supplies and stop the distribution. Fur-
thermore, Kovacs and Spens (2007) highlight the sudden increase of the prices from the
side of transportation companies especially in the last mile deliveries. The characteris-
tics of the humanitarian supply chains mentioned above are also confirmed by the re-
spondents. Organization A mentions the difficulties in access and movement of the
products especially in the last mile deliveries. Organization C and the volunteers men-
tion the corruption issues in the operation areas. Infrastructure issues such as destroyed
roads, overloaded ports, and landlocked areas are also issues mentioned by the respon-
dents. Unwillingness to co-operate of the local transportation companies and the high
possibility of attack and theft are also characteristics of humanitarian supply chains in
the disaster areas.
Taking everything into consideration it can be concluded that commercial and humani-
tarian supply chains share common characteristics in the pre-disaster stage. However, in
the disaster and post-disaster phase the supply chains differ significantly.

5.2 Challenges in humanitarian supply chains

Ergun et al. (2010) categorized the disaster phases as pre-disaster, disaster and post dis-
aster. Moreover, Howden (2009) connects the pre-disaster phase with mitigation and
preparedness activities, the disaster phase with response activities and the post-disaster
phase with recovery activities. The challenges that humanitarian organizations face vary
based on the different disaster phases.

5.2.1 Pre-disaster challenges

Fenton (2003) mentions that there are many factors contribute in creating challenges in
the humanitarian organizations. Based on the collected data, some of challenges that
humanitarian organization faces in the pre-disaster phase are: to lack of financial re-
sources, lack of skilled people and lack of administrative staff. Organization A men-
tioned that the financial resources are limited and the cost of medicines very high.
Moreover the high level of transparency makes the organization less flexible. Organiza-
tion B mentioned that lack of employees and volunteers is the main challenge for them.
Organization C mentioned that based on their experience, they are better organized and
have managed to become more efficient. However, challenges such as lack of financial

44
support and lack of skilled people still exist. The financial support is mentioned as the
main challenge also from the volunteers. The challenges that the participants mentioned
are in line with the challenges that are mentioned in the chapter 2. Balcik and Beamon
(2008) mentioned that part of the main challenges that the humanitarian logistics faces
are the lack of resources in terms of people, money, technology and supplies. The chal-
lenges also differ slightly based on the type of the organization (Kovacs & Spens,
2009). The summary of the challenges in the pre-disaster phase are presenting in the ta-
ble 5.1 below.
Table 5.1 Pre-disaster challenges

Pre-disaster challenges

Financial resources
Financial crisis
Lack of supplies (medicines, food etc.)
Lack of staff (permanent, volunteers)
Cost of supplies (especially medicines)
Donations of inappropriate materials
Accountability
Complex financial control system
Increase need for their services
Large amount of various projects
Efficient planning and forecasting
Complex supply chain
Bureaucracy

5.2.2 Disaster and post-disaster challenges

For the humanitarian organizations the main challenges are evolved when a disaster oc-
curs. The first challenge is related to the unpredictability of a disaster. Balcik and Bea-
mon (2008) mention the unpredictability of demand in terms of location, size, type and
the short lead times as the main challenges in the disaster phase. Furthermore, Nagurney
(2012) highlights the zero lead time between the disaster and the need for the products.
Organization A mentioned that every disaster is different in terms of size and type, and
the organization has to deal with different challenges in every disaster. Moreover, in
humanitarian supply chains, there is a zero (or approximately zero) time between the
occurrence of the demand and the need for it. However, the actual lead time is deter-
mined by the chain of material flow (Beamon & Balcik, 2005; Nagurney, 2012). Or-
ganization B mentioned that every project that they are involved has different problems
due to the high demand of the aid and limited organizational resources. Moreover, ac-
cording to organization C, the one of the main challenges in the humanitarian supply
chain in the disaster coordination are related to forecasting and planning due to the
highly unpredictable nature of the disaster. The organization C prepares different crisis
scenarios, in order to prepare for the potential crisis. Volunteers mentioned that is chal-
lenging to prepare themselves for the disaster as they do not know which will be their
next mission, and what kind of challenges they will face in the fields.
The empirical study also revealed that humanitarian organizations face challenges re-
lated to infrastructure at the crisis zones. According to the Organization A, it is chal-
lenging to find appropriate places to store the medical supplies in terms of safety and
temperature conditions. The relief organizations usually have difficulties in finding se-
cure, affordable, undamaged warehouses (ACFID 2007). Moreover, according to Or-

45
ganization A, the large amount of non-financial donations creates problems in transpor-
tation capacity. Balcik et al. (2009) state that bulk supplies of donations create chal-
lenges for global procurement and transportation. Organization B mentioned that mov-
ing the medicines to the beneficiaries is very difficult because of infrastructural chal-
lenges such as destroyed roads, and electricity issues since the medicines should be
stored in a controlled temperature. Organization C mentioned that the most crucial chal-
lenge start when the products arrive at the port. Lack of the appropriate equipment, war
zones, destroyed warehouses, roads and buildings and electricity problems are some ex-
amples of infrastructural challenges that the volunteers mentioned as well.
Kovács and Spens (2007), state that the main stakeholders involved with the humanitar-
ian organizations are donors, aid agencies, other NGO’s, governments, military, and lo-
gistics providers. The empirical study revealed that during the disaster phase, humani-
tarian organizations face challenges related to the different stakeholders. According to
Organization A and B, the high level of transparency requested by the donors, the inap-
propriate non-financial donations, the customs regulations and the various medicine re-
strictions in different countries and the high cost of transportation during the disaster
due to of the lack of capacity create challenge with stakeholders in the humanitarian
supply chains. Moreover, according to Organization C, the lack of co-ordination and co-
operation with the local governments and the high pressure from the media create chal-
lenges as well. All the organizations also face challenges created by bureaucracy and
corruption in the host governments.
To conclude, the challenges the humanitarian organizations face in the disaster and
post-disaster phases vary depending on the type of disaster. The figure 5.1 presents a
humanitarian supply chain and its challenges in the different disaster phases. Moreover,
the information flows are presented as well in the figure. Information flows are more
stable and continue in the pre-disaster phase. However, in the disaster and post-disaster
phase, information flows are unstable and not always reliable, and therefore create addi-
tional challenges for the humanitarian organizations. The challenges are categorized
based on their characteristics into unpredictability, infrastructure and stakeholders.

46
Figure 5.1 Challenges in the humanitarian supply chains (Compiled by the authors for this thesis).

5.3 Performance measurements in humanitarian supply

chains
According to Gunasekarana et al. (2004), performance measurements and metrics are
essential for humanitarian organizations since they contribute in setting objectives and
evaluating their performance. Shepherd and Gunter (2006) highlight that measuring the
performance of supply chains can contribute to better understanding of the supply chain
and in increasing its overall performance. Poister (2003) states that performance meas-
urements are essential in the non-profit organizations since they can improve their per-
formance and provide accountability. According to Beamon and Balcik (2008) the ef-
fective performance measurement systems can assist humanitarian organizations in their
decisions, improve their efficiency and effectiveness, and provide transparency.
Organization A mentioned that by implementing performance measurement systems,
the organization can have better internal and external financial control, they can provide
better information to various stakeholders, improve their efficiency in terms of cost and
time of response, evaluate their staff and they can understand their overall processes in a
better way. Organization B mentioned that even though they do not use an extensive
system for measuring their performance, statistics are used for controlling their opera-
tions and for gathering related information useful in the future. Organization C men-
tioned that performance measurements have helped the organization to improve their
performance, to reduce their lead times, to evaluate their suppliers and to put pressure
on various governments when various problems occur. The volunteers, even though
they did not use any performance measurement systems, highlighted the importance of

47
controlling the financial resources and provide accountability to the various stake-
holders, which can be controlled better with appropriate performance measurements.
Taking everything into consideration, performance measurements are essential for the
humanitarian organizations in order to improve their efficiency, effectiveness and over-
come challenges in their supply chains. The overall advantages that performance meas-
urements can create for the humanitarian organizations are presented in the table 5.2.
Table 5.2 Advantages of performance measurements in humanitarian organizations

Advantages

Financial control
Accountability
Transparency
Process understanding
Staff evaluation
Supplier evaluation
Partner evaluation
Cost reduction
Lead time
Impact in beneficiaries
Quality of the services

5.3.1 Difficulties in measuring performance in humanitarian organiza-

tions
In the business sector the main challenge for measuring performance is the vast number
of different indicators and performance measurement systems (Gunasekaran & Kobu,
2007; Griffis, Goldsby, Cooper & Closs, 2007). Gunasekarana et al. (2004) highlight
the difficulty of implementing in practise all these systems and frameworks. Shepherd
and Günter (2006), mention the complexity of the supply chains as the major issue in
measuring performance.
The empirical findings revealed that measuring performance in the humanitarian supply
chain the barriers are not just related to the vast number of different indicators and sys-
tems but also involve more complex barriers. Organization A mentioned that their op-
erations are project based and every project has different challenges, purpose and KPI’s.
Moreover, the chaotic situation in the fields is also a barrier for measuring performance.
Furthermore, the unpredictability of disasters does not allow the pre-planning of stan-
dard performance measurement systems. Organization B highlighted the lack of re-
sources and staff of being one barrier for creating and operating performance measure-
ment systems. Organization C mentioned the unwillingness of governments to share in-
formation and infrastructure issues in the fields, create barriers for measuring perform-
ance. Moreover, the volunteers mentioned that is very time consuming and requires
some training in order to fill out performance evaluation forms.
Taking everything into consideration, it can be concluded that measuring performance
in the humanitarian organizations and especially in the fields of operation is a difficult
process which includes vast numbers of barriers. The barriers for measuring perform-
ance in the humanitarian organization are presented in the table 5.3.

48
Table 5.3 Barriers in measuring performance in humanitarian organizations

Barriers in measuring performance

Unpredictability
Different disaster
Different needs
Different objectives
Different measures
Lack of people
Lack of training
Lack of co-operation
Infrastructure
Time consuming
Chaotic situations

5.3.2 Performance measurement characteristics

According to Schultz and Heigh (2009), the tool for measuring performance should stay
simple. Data collection and tool handling should be very easy, convenient and consume
as little time as possible and furthermore, only key data should be collected. Moreover,
the metrics should fulfil the requirements of validity, robustness, usefulness, integration,
economy, compatibility, level of detail and behavioural soundness.
Regarding the characteristics that performance measurement tools in the humanitarian
supply chain should include, the respondents mentioned that they should be easy to im-
plement, without any training, relevant in each case and operation, not time consuming,
straight forward and connected with the processes, and provide as much relevant infor-
mation as possible. Furthermore, specific KPIs should be implemented in every disaster
in order to provide the appropriate information to various stakeholders.
Taking everything into consideration, the authors suggest a model for creating an ap-
propriate performance measurement system for humanitarian supply chain operations.
The model is presented in the Figure 5.2 below.

49
Figure 5.2 Model for creating appropriate performance measurement systems for humanitarian supply
chains (Compiled by the authors for this thesis).

Firstly, every disaster varies from each other in terms of size, type, location and impact.
However, there are also similarities among different disasters in terms operational proc-
esses and the required supplies. As a suggestion from the authors, a common database
of previous projects and operations of different humanitarian organizations should be
used in order to share their knowledge and experience. The first elements of KPIs
should be based on the type of the disaster and the prior knowledge of the organization
in similar disasters.
Secondly, every organization has different purposes and objectives. For instance some
organizations focus on food supplies and others in medical care. Thus, the second ele-
ment of KPIs should be based on the purpose and the objectives of each organization.
Thirdly, every organization is dealing with different stakeholders, such as suppliers,
governments, donors and beneficiaries. Moreover, every stakeholder has their own in-
terests, and therefore the third element of KPIs should be adjusted according to the
stakeholders involved in order to provide relevant information to them.
In order to create appropriate supply chain metrics for the humanitarian supply chain,
humanitarian organizations can follow some of the steps presented in Labert and Poh-
lem’s (2001) seven step framework, such as mapping the whole supply chain and using
the customer/supplier relationship management processes in order to analyse each link
in the supply chain. Furthermore, the humanitarian organizations can realign the supply
chain processes in order to achieve performance objectives. Finally, they can compare
the stakeholders’ value with the organization’s objectives and revise the performance
measure if necessary. By following these steps together with Schulz and Heigh’s
(2009), four step framework, and by utilising the model suggested by the authors, hu-
manitarian organizations can create appropriate performance measurement systems.

50
Finally, by implementing appropriate KPIs in an efficient way organizations can gain
more relevant and precise information regarding the humanitarian operations, and en-
hance supply chain coordination among different stakeholders. Examples of KPIs used
in supply chains can be found from appendices 2 and 3. The authors have bolded the
ones that can be implemented in humanitarian operations. As an outcome, by imple-
menting appropriate performance measurement systems, the humanitarian organizations
can reduce and overcome some of the challenges in their supply chains, and therefore
enhance their overall performance.

51
6 Conclusions
This following chapter includes the conclusions from the research. It concludes the
main findings from the empirical study and literature review. Furthermore, this chapter
reflects the research purpose combined with the research findings. Finally, thesis con-
tributions are presented and ideas for future research discussed.
The purpose of this research was to identify the main challenges in humanitarian supply
chains and what is the role of performance measurements in humanitarian operations.
Moreover, the purpose of this research was to identify an appropriate model for measur-
ing and thus, enhancing performance in the humanitarian supply chains.
For this research the authors divided the challenges in humanitarian supply chains ac-
cording to the presented literature into pre-disaster and disaster/post-disaster phases.
The research findings indicate that the main challenges in humanitarian supply chain in
the pre-disaster phase are lack of financial resources, lack of staff (permanent, volun-
teers), lack of supplies, donations of inappropriate supplies, cost of supplies (especially
medicines), cooperation with other humanitarian organizations, efficient planning and
forecasting, stock pre-positioning and accountability. In the disaster and post-disaster
phases the main challenges in humanitarian supply chains are related to unpredictability,
infrastructure and stakeholders. As disasters are unpredictable, they create challenges in
forecasting and planning humanitarian operations. Moreover, humanitarian organiza-
tions face challenges due to lack of appropriate infrastructure at the crisis zone. Also,
during disaster and post-disaster phase, humanitarian organizations face challenges
when dealing with the stakeholders in the supply chain. These include challenges such
as corruption, bureaucracy (both organizational and governmental), lack of coordination
and cooperation with other organizations and governments, insufficient donations and
thefts.
According to the literature presented, the performance measurements are essential for
organizations since they contribute in setting objectives and evaluating their perform-
ance. Moreover, the findings revealed that by measuring performance, the humanitarian
organizations can limit the impact of the challenges in the supply chain operations in
pre-disaster, disaster and post-disaster phases. However, due to the complex and unpre-
dictable nature of the disasters, it is sometimes difficult to implement performance
measurement systems in humanitarian supply chains.
Thus, based on the challenges in the humanitarian supply chain, the authors suggested a
model with main characteristics that performance measurement tools in the humanitar-
ian supply chains could include. The performance measurements would vary based on
the type of disaster, the type of humanitarian organization, and its stakeholders. More-
over, performance measurements in humanitarian supply chains need to be easy to im-
plement, relevant in each case and operations and provide as much relevant information
as possible.
In conclusion, by implementing appropriate KPIs in an efficient way humanitarian or-
ganizations can gain more relevant and precise information regarding the humanitarian
operations, and enhance supply chain coordination among different stakeholders. As an
outcome, by implementing appropriate performance measurement systems, the humani-
tarian organizations can reduce and overcome some of these challenges in their supply
chains, and therefore enhance their overall supply chain performance.

52
7 Contributions
This chapter describes the importance of this research and makes recommendations for
further research in the field of humanitarian supply chains.
As the presented literature revealed, research in the field of humanitarian supply chains
is fairly limited. Furthermore, the increased impact of disasters and humanitarian supply
chain complexity, have increased the need for further research in the field. The authors
believe that identifying and categorizing the challenges that humanitarian organizations
face can contribute in understanding the field better. Moreover, by identifying the chal-
lenges, the foundations for further research are established and solutions can be sug-
gested. The categorization of the challenges in the different disaster phases can provide
a direction for the solutions. The different phases require different approaches and solu-
tions, and therefore further research in finding solutions is recommended.
Moreover, performance measurement systems are essential for every organization for
improving performance and efficiency. Humanitarian organizations should implement
performance measurement systems in order to improve their operations and to help
overcome challenges in the supply chains.
The existing literature in this field is also still relatively limited, and therefore further
research is necessary. Thus, the model suggested by the authors can also be used as a
foundation for further research in creating appropriate performance measurement sys-
tems in the humanitarian supply chains.
Taking into consideration the limited research in the field, the unwillingness of the hu-
manitarian organizations to participate in the research and the highly demanding and
sensitive research topic, the authors believe this research contributes in creating value in
the field of humanitarian organizations by identifying the current challenges in the hu-
manitarian supply chains and by suggesting a model for creating an appropriate per-
formance measurement system.

53
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Appendices

Appendix 1: Interview guideline

Organizational information
- Tell us a little about your organizations
- What is the main purpose/objective of your organization?
- Which are the main stakeholders involved in your organization?
- What are the main challenges humanitarian organizations face today?
Measuring performance:
- What are the main challenges in measuring performance in humanitarian aid?
- Do you use any performance measurement tools? (If not, please explain why?)
- For how long have you been measuring performance?
- What are the most important indicators for you in the stages of preparedness, re-
sponse and reconstruction during an operation?
- Have you been using the same indicators since the beginning?
- What improvements have you seen since implementing the tools?
- Have you created your own tools or adapted existing tools?
- Can you briefly explain how does the tool work?
- Do you use different measurements in different stages/processes in humanitarian
aid?
- What are the most important performance indicators for you in different stages
in humanitarian aid?

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Appendix 2: Key performance measures/metrics in logistics and SC environment
(Gunasekaran & Kobu, 2007, p. 2835)

Performance measures/metrics
Phases in supply chain Financial Nonfinancial
Plan Return on investment, sell- Labour efficiency, per-
ing price ceived value of product,
product development cy-
cle time, bidding man-
agement cycle time, com-
pliance to regulations,
forecasting accuracy, per-
ceived value of product,
supply chain response
time
Source Scrap/obsolescence cost, Labour efficiency, product
inventory cost, selling development time, lead
price of goods and service time for procurement in-
cluding supplier devel-
opment time, delivery re-
liability, product and ser-
vice variety
Make Scrap/obsolescence cost, Labour efficiency, Con-
overhead cost, inventory formance to specifications,
cost, selling price of capacity utilization, lead-
goods/service, value time for manufacturing,
added production flexibility,
process cycle time, accu-
racy of scheduling, prod-
uct and service variety,
value added
Deliver Overhead cost, value Labour efficiency, delivery
added, inventory cost, reliability, perceived value
stock-out cost, transpor- of product, value added,
tation cost and warranty product and service variety,
cost perceived quality

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Appendix 3: Metrics used to measure performance in SCM systems and their relations to categories and factors
(Gunasekaran & Kobu, 2007, p. 28233)

A B C D E F G

Metrics 1 2 3 4 1 2 3 4 1 2 3 4 5 1 2 3 1 2 1 2 1 2 Total Percentage

01 Accuracy of scheduling X X X X X X X 7 32
05 Bid management cycle time X X X X X X X 7 32
06 Capacity utilization X X X X X X X X X 9 41
07 Compliance to regulations X X X X X X X X X X 10 45
08 Conformance to specifications X X X X X X X X X 9 41
18 Delivery reliability X X X X X X X X X 9 41
24 Forecasting accuracy X X X X X X X X X 9 41
29 Inventory costs X X X X X X X X X X X X X X 14 63
33 Labor efficiency X X X X X X X X 8 36
35 Lead time for procurement X X X X X X X 7 32
36 Lead time manufacturing X X X X X X X X X 9 41
39 Obsolescence cost X X X X X X X X 8 32
44 Overhead cost X X X X X X X X X X 10 42
46 Perceived quality X X X X X X X 7 32
47 Perceived value of product X X X X X X 6 27
50 Process cycle time X X X X X X X X X X X 11 50
51 Product development time X X X X X X X X 8 36
54 Product/service variety X X X X X X X X X X 10 45
55 Production flexibility X X X X X X X X X X X 11 50
62 Return on investment X X X X X X X 7 32
63 Selling price X X X X X X X X X 9 41
68 Stock out cost X X X X X X X X 8 32
71 Supply chain response time X X X X X X X X X X X 11 50
76 Transportation cost X X X X X X X X 8 32
77 Value added X X X X X X X X X X 10 45
81 Warranty cost X X X X X X X 7 32
Total 10 13 7 13 12 9 12 7 13 4 9 3 7 7 9 14 9 17 22 5 11 16
Percentage 38 50 27 50 46 35 46 27 50 15 35 12 27 27 35 54 35 65 85 19 42 61
A. Balance score perspectives: 1. Financial, 2. Internal process, 3. Innovation and improvement, 4. Customers. B. Components of performance measures: 1.
Time,2. Resource utilization, 3. Output, 4. Flexibility. C. Location of measures in supply chain links: 1. Planning and product design, 2. Supplier, 3. Production,
4. Delivery, 5. Customer. D. Decision level: 1. Strategic, 2. Tactical, 3. Operational. E. Financial base: 1. Financial, 2. Non-financial. F. Measurement
base: 1. Quantitative, Non-quantitative. G. Traditional vs. Modern: 1. Function based, 2. Value based.

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