The Great Wall of China (Wal-Mart) in Disaster Management


By

Brijendra Singh
Lecturer
Amity Business School, Amity University
Lucknow
 


ABSTRACT

Business Organizations and Humanitarian relief Organizations use lessons learned documents as a means of retaining institutional knowledge gained during relief efforts but these lessons are often not learned and many lessons reappear from year to year. A lesson's clarity, "implementability," and impact-contributes to a lesson's effectiveness.

INTRODUCTION

It is to be noted that each and every disaster is a unique event that brings with it unique challenges but the experiences of  business organizations and   humanitarian relief organizations  in response to one disaster can be applied to other disasters too. Relief agencies do recognize the importance of documenting lessons learned. However, lessons documented are not necessarily lessons learned. While the experiences of emergency responders are recorded, the knowledge is not adequately codified and transmitted to others within the relief agency nor is this knowledge effectively communicated between agencies.

DISASTER MANAGEMENT

Meaning of the Disaster : Disaster is a  serious disruption of functioning of a society resulting in widespread human, material or environmental losses  which exceeds  the ability of the affected society to cope using only its own resources.

It's interesting to figure out that Wal-Mart, the  world's biggest corporation outperformed the Federal Management Agency and the Red Cross in the areas devastated by Hurricane Katrina. This became possible as whatever is practiced by Wal-Mart in day-to-day operations was perfectly mastered (logistics & supply chain management) and aptly applied  by ensuring quick delivery  of the supplies. In short, most of the skills and competencies required to excel in the arena of logistics & supply chain management are one  and the same which are required to excel in the arena of  relief operations.

The terrorist attack of September11'2001, military action in Afghanistan and Iraq geared most of us to find out how Organizations can come up to the expectations of the human needs during  the disaster. It's easy to conclude from the observations that  natural calamities and the man-made disasters shift the purpose of delivering products to the required (POP)point-of-place but the mode of transportation and the effective and efficient management of the supplies remains the same. Due to the competitive edge acquired at a rapid pace and sustained over a period of time , Organizations like Wall–Mart and Federal Express have achieved considerable success  during the disasters over any other Organization.

Many argue that the focal point  of successful supply chain management is inventories and inventory control. So how do food and agri-business companies manage their inventories during a disaster? What factors drive inventory costs? When might  it make sense to keep larger inventories? Why were food companies quicker to pursue  inventory reduction strategies than agri–business  firms?

In 1992, some food manufacturers and grocers formed (ECR) i.e. Efficient Consumer Response to shift their focus from controlling logistical costs to examining supply chains . Customer service also became a key competitive differentiation point for companies focused on value creation for end consumers. In such an environment, firms hold inventory for two main reasons, to reduce costs and to improve customer service. The motivation for each differs as firms balance the problem of having too much inventory (which can lead to high costs) versus having too little inventory (which can lead to lost sales).

A common perception and experience is that supply chain management leads to cost savings, largely through reductions in inventory. Inventory costs have fallen by about 60% since 1982, while transportation costs have fallen by 20% . Such cost savings have led many to pursue inventory-reduction strategies in the supply chain. To develop the most effective logistical strategy, a firm must understand the nature of product demand, inventory costs, and supply chain capabilities.

Firms use one of three general approaches to manage inventory. First, most retailers use an inventory control approach, monitoring inventory levels by item. Second, manufacturers are typically more concerned with production scheduling and use flow management to manage inventories. Third, a number of firms (for the most part those processing raw materials or in extractive industries) do not actively manage inventory.

Wal–Mart used POP (point– of– purchase) data from other hurricanes to figure out whether what consumers would need pre & post to the hurricane and as the hurricane started gaining momentum, the top level management closely monitored the weather reports and made decisions in accordance to it much before the hurricane reached the Gulf Coast. Eg.  As soon as the weather reports indicated that the storm would hit Florida ,  Wal–Mart acted swiftly and in no time shipped the needed goods to Florida. Similary , as soon as the weather reports indicated that the storm would  hit Mississippiarea, it diverted the focus towards Mississippiarea.

Effective and efficient communication along with clear decision delegation among the personnel are some of  the vital ingredients of logistics and supply chain management  be it in an Organization or during the disasters. The local stores managers as per the policy of the Wal–Mart made vital decisions which helped in providing food and water to the victims quickly.Furthermore,one local manager allowed people to take the required supplies without  even payment !

Wal–Mart understands that successful SCM requires a change from managing individual functions to integrating activities into key supply chain processes. An example scenario: the purchasing department places orders as requirements become appropriate. Marketing, responding to customer demand, communicates with several distributors and retailers, and attempts to satisfy this demand. Shared information between supply chain partners can only be fully leveraged through process integration.

CRITICAL AREAS / TIPS FOR THE  EFFECTIVE MANAGEMENT OF THE DISASTERS :

Administration

Administrative support, reporting processes, paperwork, budgeting. Internal management, includes internal coordination, internal leadership. Usually intra-agency

Collaboration

Inter-agency organization. Refers to two or more agencies delivering relief in concert.

Communication

Could be inter- or intra- agency communication. Includes IT, transparency of an agency before local communities or governing bodies. Refers to the act of communicating information.

Community participation

Involvement of the local community in relief planning and recovery efforts.

Coordination

Coordination between agencies and local communities, military, multilaterals, and NGOs. Usually inter-agency. (See "leadership")

Cultural sensitivity

 

Early warning

Detection and notification of impending disasters

Economic development

 

Empowerment

Rebuilding livelihood, self-reliance. Relates to individuals rather than whole communities.

Environment

Weather, global warming,

Displaced Persons

IDP, refugees, evacuees, survivors

Fund raising

 

Gender issues

 

Humanitarian Assistance

Medical care, food, water, and any assistance offered directly to beneficiaries.

Information Management

IT, IS, HIC, registration and identity

Leadership

Usually inter-agency leadership. Describes the issues of an agency or agencies establishing a leadership role for itself.

Logistics

 

M & E

Monitoring and evaluation

Management

Internal management, includes internal coordination, internal leadership. Always intra-agency.

Media

Issue pertaining to role of media, interaction between media and relief agencies. Includes PR.

medical care

Subsumed under Humanitarian Care

Military

Role of military in civilian relief efforts

Participation of local authorities

Includes coordination, local government, police, fire, military, war lords,

Preparedness

ECB, pre-planning, evacuation plans, contingency planning

Program design

Designing projects, programs, relief efforts, development programs

Public Relations

An agency's messaging to the general public. (See Media for contrast.)

Reconstruction

Rebuilding infrastructure, physical structures, buildings, roads, schools, rebuilding social networks, re-establishing social capital, restoring community, community

Refugees

persons displaced across intl. borders and with intl. recognized protections

Reproductive health

Std treatment, family planning, ob/gyn, "counseling"

situational awareness

Geographical data, location of other agencies, location of affected areas. Damage assessment.

Sustainability

Durable solutions, exit strategies, handing over programs to local control, or whatever, "local capacity"

Training

Training for the benefit of communities and individuals receiving aid. Training for relief workers and administrators.



AN APPEAL !

Other than challenges like administrative overhead, staffing limitations, and the time pressure of relief work, it's believed  that IIT i.e. INVOLVING & INSPIRING would lead to TRANSFORMING………………………………

A call to all individuals and institutions to come forward to volunteer and participate in this initiative. You may volunteer your services and / or resources, and share your experiences, research studies, publications etc. on brij1168@rediffmail.com. It is an effort to pool resources towards better preparedness for future/uncertain disasters.
 


Brijendra Singh
Lecturer
Amity Business School, Amity University
Lucknow
 

Source: E-mail July 06, 2007

        

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