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Humanitarian Disaster and Type of Disaster

Abstract

Chapter 1 Preface

  1. Preface:
  1. Overview

This research aims to investigate the existing shortfalls or challenges as argued by Akhtar et al., (2012), of the humanitarian procurement plans produced and owned by UN Agencies, INGOs and or states.

The effectiveness of the humanitarian procurement is crucial as humanitarian interventions are core in saving lives and reducing sufferings, and the fact the existing practices reveal shortages of humanitarian procurement plans or planning processes, which hampers the quality of the delivery of an effective humanitarian response. This research has two specific objectives:

Chapter2 Context Chapter

Introduction

2.0-    Humanitarian Disaster and Type of Disaster

According to Kovacs & Spens (2009), there is a standard definition for the crisis at humanitarian level (or “humanitarian disaster”), in definition, the crisis is a particular event or a series of threatening events with regard to the health, well-being and safety of a community. A humanitarian crisis could be classified as an external or internal threat that has its occurrence in a larger geographical region. With such an occurrence, responses from regional, state and universal are necessary to reduce the impacts of the disaster.

In the past few years, the number of disasters has highly increased leading to humanitarian situations (crisis) which have affected the lives of hundred thousands of people across the globe. Responding sufficiently and effectively to these events is not an easy job. The demands for humanitarian aid has always been high while the sources of funding are shrinking. For instance, according to the World Vision an International Charity, the following sections bring some of the main humanitarian crisis recorded alone in 2015. However, some of these crises are still valid, i.e., the Syrian refugee crisis. (Huber & Kathryn, 2016)

Natural CrisesManmade crisesVirus
Nepal EarthquakeSyrian refugee crisisWest Africa Ebola outbreak
Somalia droughtSouth Sudan conflict and hunger 
Central American droughtCentral African Republic violence 

Even if we look into 2017, the number of disasters and humanitarian situations are rising. These include the ongoing war in Syria, Iraq and Afghanistan, earthquakes in Iran and Mexico, Flooding in USA, Europe and Asia, Genocide against Muslim minorities in Burma, etc. These required humanitarian responses and actions to save lives and help people come out of their vulnerabilities.

Benini (2009) argues that a disaster type is categorized by phases, preparedness, response and reconstruction. Van wassenhove (2006) reiterates that the speed of disaster is fast onset and slow onset. When an accident happens, the most critical factors in humanitarian response is the time frame. According to Kovacs and Spens (2009), in particular disasters, time is vital to reach affected communities, sudden -onset disasters might also destroy or significantly destabilize the current infrastructure, which could delay access by humanitarian aids organizations. The fast onset disaster and the risk of postponing response and loss of flexibility of transportation might be an obstacle (Vaillancourt 2016, p. 13-14).

Figure 1.  Economic impact of disaster (1973-2002), (Vaillancourt 2016, p. 13-14).

  1. Phases in Disaster Relief

Although it is hard to prevent occurrence of natural disasters in other parts of the world, it is more prone in some regions where their is prevalance for some specific risks. Countries like San Francisco, Reykjavik and Tokyo are instances of cities with a higher need to carefully make preparation for the response of significant earthquakes. Many other areas are either very close to a volcano that is active, and suffer because of ignorance of evacuation plans, or maybe lie in areas prone to hurricanes (Kovács & Spens, 2007).

Figure 2.  Phases of disaster relief operations

  1. Humanitarian Aid Principle

Aid from humanitarian organizations is given to those in need, and most times it is for a shorter time until long term help is identified by the state and other institutions that represent the state. People who are refugees, homeless, victims of natural disasters and human-made conflict are all in need. Audiopedia, (2017); Vaillancourt (2016) state that humanitarian aid is designed purposefully for saving lives, reducing the risk of people being impacted by disaster and in respect to human dignity.

Humanitarian principles are defined as ‘the delivery of life-saving aid to people in need, without serious distinctions’, these principles are grounded in the law of International Humanitarian. Being human means addressing human suffering wherever it is found with particular attention to those who are most vulnerable. Being neutral means the aid from humanitarian organizations do not favor either sides. Impartiality dictates that aid from humanitarian organizations be provided wholly, based on need and without discrimination. Independence in autonomy of the objectives from economic, political, military and other purposes is essential (ECPHAO, 2017).

  1. Humanitarian Logistics

Humanitarian logistics include distinct activities at special times; it depends on responding to various disasters. All these operations’ aim is on how to save lives (Kovács & Karen, 2007). Humanitarian logistics can be defined as the procedure of preparation, implementing and controlling humanitarian activities (Thomas and Kopczak 2005, p. 4). According to these authors, efficient cost control, efficient flow of goods and supplies and goods storage are the available information from the start to the point of consumption, and are responsible for doing away with the suffering of the affected groups. These functions take into account all activity types, with inclusion of preparedness, preparation, procurement, transporting, storage, tracing, tracking and clearance at customs office. Are we doing what is sufficient and are we really alleviating the sufferings effectively, is the humanitarian procurement being done to the extent of what it is meant? These questions need to be answered one by one. This function includes all the named range of activities with inclusion of readiness, forecasting, preparation l, procurement l, transporting, storage, customs clearance activities and tracing.

  1. Humanitarian Operation Challenges

According to Kovács & Spens (2007), humanitarian disaster operations of relief require great efforts with very different exceptional situations; the operation sometime needs to be performed in an environment with damaged transportation, no electricity supplies to non-effective transportation infrastructure. The authors argue that most of the ordinary disasters cannot be predicted, and therefore, the requirement for goods and supplies in these areas are again variable. Also, they face various severe issues because decisions that had humanitarian implication were increasingly being taken based on political criteria and interest, rather than on the victims’ need according to Nascimento & Daniela (2015).

 The below four factors are the main challenges faced by humanitarian aid.

A.    Political Instrumentalities of Humanitarian Aid

B.    Conditionality and Human Rights

C.    Corrosion of Humanitarian Principles

D.    The militarization of humanitarian activities (Academies & National, 2013).

Vaillancourt (2016) argues that humanitarian operation was facing the set of challenges such as unpredictable demand regarding timing, place, size and type. The author states that high demand and short lead time for the different kind of supplies, lack of resources such as material, human, technology and financial are the main challenges.

  1. Consolidation in context of humanitarian logistic
    1. According to Vaillancourt (2016), there is delay and impairment in cooperation presence in disaster response, and development activities between relief organizations. The author also argues that lack of coordination among relief organizations are depended on the disaster type, the focus of the organizations and the stakeholders, as well as resources required for consolidation.

Figure 3. Framework for consolidation in humanitarian logistic (Vaillancourt, 2016)

  1. Humanitarian Response

Reliefweb. (2008) define humanitarian assistance as the help with an intention to save lives and do away with suffering and crisis in affected environments. The humanitarian response must be given following the fundamental humanitarian civilization, neutrality and impartiality principles as confirmed in General Assembly Resolution 46/182.

  1. Actors in supply networks of humanitarian aid

The fundamental difference in motivation of humanitarian aid is what keeps the logistic process going. In humanitarian logistics, going beyond profitability is an expectation according to (Kovács & Spens, 2007). According to the authors, commercial logistics are based on three primary processes; requirement management, supply management and execution management, wherein many humanitarian actors are not connected to the benefits that comes with the demand for satisfaction.

Figure 4. Actors in the humanitarian supply network (Kovács & Spens, 2007)

There are many players involved in this, for example, state, federal non-government organizations (NGOs), international NGOs, armed forces organizations and the United Nation aid organizations (Pettit & Beresford, 2009).

Government Bodies & Military organizationLocal and International Non-government organization (NGO) 1UN aid agenciesThe European Community Humanitarian Aid Department (ECHO)
N/A (2011) argues that after Japan nuclear disaster, many urge that humanitarian relief becomes a core task for modern armies. Besides, other duties the defense force may assign in taking part in humanitarian operation include, air ambulance service, rescue, transport service, mineral air, natural or another disaster assistance, assistance about the maintenance of essential services and assistance in taming oil pollution at sea areas (Paper, 2013).Werker & Ahmed, (2007) state that NGOs are a group of players active internationally at increasing the welfare of poor people in developing countries. The authors argue that these bodies are founded by government and other sources for delivering goods and services by using rich countries’ resources. They are primarily staffed by altruistic employees and volunteer workers toward ideological rather than financial goals. Gaining cooperation globally in finding solutions to universal economic, social, cultural and humanitarian character is one of UN’s purposes (UN, n.d). Here are few central departments of UN. •    Office for the Coordination of Humanitarian Affairs (OCHA). Central Emergency Response (CERF).   Here are four fundamental UN entities that deliver humanitarian aid; United Nations Development Program (UNDP), World Food Program, (WFP), United Nations Refugee Agency (UNCHR), United Nations Children’s Fund, (UNICEF), World Health Organization, WHO.    Established in 1992, ECHO was considered the humanitarian aid branch of European Union (EU). The objective is to provide assistance in the event of emergency, and also give victims of disaster assistance from the European Union (Schulz, 2009).   

Figure 5. Fund donated by Development Assistance Committee (Statistics, 2015)

Figure 6. 10 Top recipients of Development Assistance Committee (Statistics, 2015)

  1. Supply Chain management

Supply chain management is defined as “a system or process that supports an organization’s total needs for the supply of goods, services and processes required to accomplish the goals and tasks established by the organization” (Turner, 2011). The author further explains that optimizing costs materials, transport, management, service, value and consistency for external and internal customers is necessary for a succesful supply chain (Turner, 2011, p.1). According to Johnson & Flynn (2015, p. 4-5), reducing cost and times in which a service goes through tiers in the supply chain is essential in order to impact the client positively. In a different statement by Snuder & Shen (2011), supply chain involves all infrastructure and activities developed with a purpose of moving the final product from where they are produced to where the consumer is. SCM then becomes a set of practices needed to carry out less costly, more efficient and more profitable operations. Supply chain management activities include increasing consumer value and gaining longterm competitive advantage. In SCM, there is a definition of a mindful endeavor by a firm dealing in supply chain, in order to build up as well as operate in a manner that is efficient and effective. The operation covers all aspects ranging from the development of a product, to logistics, production, information systems and coordination of processes (University & NCSU, 2017). The CRM concept is based on two basic ideologies:

1.    Practically, every product brought to the end user is a representation of a combination of efforts from significant organizations. Brought together, these firms are termed as (SC) (University & NCSU, 2017)

2.    Secondly, there is an idea that since supply chains have been in existence for a long period, firms have in the past focused on what happens within the business. A handful of businesses understood not to mismanage the whole chain of business activities, and in the end delivered less quality to clients. The result of this is an ineffective and disjointed chain of supply (University & NCSU, 2017).

1.13-  Humanitarian versus commercial supply Chain Management

Commercial and humanitarian supply chain objectives are the same, but in the real world, it’s very different as compared to commercial objectives. It’s because of commercial that firm’s stance for higher profit, whereas humanitarian focus more on lifesaving rather than profit (Berger & Emmanouil, 2013). The critical characteristic which separate non-profits from profit organization are the “non-distribution constraint” (Werker & Ahmed, 2007, p. 7). Humanitarian logistics represent 80 percent cost of program budget, and up to 40 percent operation cost compared to 15 percent in commercial logistic activities (Vaillancourt, 2016).

Chapter 3 Literature Review

  • Procurement

Saunders (1997, p. 1) argues that procurement and supply can no longer account for a second-order function in the organization. Baily et al. ( 2015, p. 4) demonstrated that procurement is gaining goods of right quality when the time is right. This means having the right quantity of product at the right price, and from a trusted source. There are so many other activities in the procurement process that are needed to acquire consistent goods and services with requirements that meet user needs. Any firm can gain competitive advantage just by having proper execution of procument activities (Coyle, Novack, Gibson & Bardi, 2009). Therefore, events ranging from the placing of an order to delivery of the order are all procurement events. Considering the fact the procurement is a range of activities from the placement of order to delivery of goods, we can ask ourselves, is it done efficiently, are there areas to improve and what are the critical shortfalls and challenges affecting the quality of humanitarian procurement?.

The term procurement is defined as “the systematic process of deciding what, when and how to purchase; the act of purchasing it; and the process of ensuring what is required is received on time in quality and quantity specified” (Baily et al., 2015, p. 46). The process of achieving new products and services also include documentation in contract, contract strategy and contract selection, all being part of procurement (Bower, 2003, p. 1). Bower also extends procuments to all members within the supply, as well as those responsible for maintencance and operation. Chopra & Meindle (2013, p. 67) argue that “procurement is a process of obtaining goods and services within a supply chain.” Booth (2014, p. 45) states that procurement is not order-taking or even order-placing anymore, the author argues that it is a key business competency. Johnson & Flynn (2015, p. 4) claim that purchasing is not limited to buying of requirement, locating, selection of supplier, negotiation price, contract management and payment. “Purchasing, supply management and procurement are used interchangeably to refer to the integration of related functions, to supply effective and efficient goods and services to the organization”  (Johnson & Flynn, 2015). The authors expanded procurement responsibilities that include, “receiving, inspection, warehousing, inventory control, materials handling, packing scheduling, in and outbound transportation traffic and disposal.”

  • Procurement Objectives

Saunders (1997, p. 1) argues that the critical goal of purchasing and supply chain  lies in the provision of a boundary between the plan to supply, store, obtain and distribute products and helping the clients to get satisfied. Baily et al. ( 2015)  sugessted purchasing objective as, “to supply the organization with a flow of materials and services to meet its need”, to make sure the continous provision by managing effective associations with current suppliers, or developing another source of supply as an alternative, maintaining efficiency which will gain the best value for money spent, being involved and cooperative with other departments, organizations by providing advice and information which could deliver effective operation for organization by maintain communication and co-operation, developing staffs, creating policy and procedure in organization will all lead to achieve these objectives. Baily et al. (2005, p. 3-4) highlighted the need of acquisition of the correct material quality, on time, at the right place, with correct quantities, coming from a right source and with effective pricing. The authors criticized that the above statement are not measurable. Also, the authors added the below specific objective such as the selection of the best supplier who supports in the generating of fresh goods that guard the firm’s pricing arrangement, preserve the actual quality, observer market supply trends, efficiently bargain to win and win and adopt environmentally responsible supply chain.

  • Role of Purchasing in Humanitarian Disaster

Pazirandeh (2014) argued that “procurement in humanitarian sector is a support function to both permanent or long-term e.g development projects and temporary disaster relief operations”. The author also argued that in both scenario, a huge amount of expenses and additional values are allied to the function of procurement. Falasca & Zobel (2011) state that an estimation of $50 billion goods and service are purchased from local and international suppliers annually, as evident in Figure 1, “(based on data presented by Blecken and Hellingrath, 2008)”, its approximate procurement function as 0.65 percentage of expenditure, whereas Mwanjumwa & Simba (2015) state about 80 percent of total expenditure. According to Trunick (2005), logistic represent 80 percent of a program budget. According to Wassenhove (2006), humanitarian aid of about 80 percent in costs can be related to the cost of delivery plus that of the material.

ECHO (2011) states that Procurement of service and goods is an important function in the achievement of the objectives of humanitarian aid action, it’s important for it to be effective and act with speed while responding to major humanitarian agenda in different sectors such as sanitation, health, shelter, water and food. In non-profit organization, efficiency must be expressed in terms of the level of service provided in connection to the amount of expenditure incurred (Saunders, 1997).

Figure 7. Expenditure in humanitarian relief logistic (Saunders M. , 1997). 

  • Humanitarian Procurement Challenges

Mwanjumwa & Simba (2015) argue that uncertainty in demand and supply, as well as specifying of need escorted by time constrain to supply on time are core challenges. In some cases, local procurement is more expensive, while international procurement is slower and can cause price destruction too (MBOHWA, n/a).

Pazirandeh (2014) summarized the challenges of procurement within humanitarian supply chain. The challenges included lack of monetary support, increased demand for uncertainties, environmental restrictions and lack of knowledge by end users.

Procurement processes always face obstacles in the humanitarian interventions and with different types. According to World Food Organization presented on (2013, October 24) at Berlin, the limitations of special nourishing food alone included; low supply, low capacity for global production, shorter shelf life, exposure to higher temperatures, complexities in tracing products as well as complicated quality control of foods.

All humanitarian responses face procurement challenges, including transparency and accountability, storage, transportation, late arrival of goods and late distributions.

From my experience working in the humanitarian aid organization, nearly half of the humanitarian organizations have poor performing supply chain systems. Only one third of supply chains could meet deadlines, while half are flexible to changes in project demands. The financial limitations, government bureaucracy, infrastructure challenges and environmental limitations add to other challenges of humanitarian procurements.

According Lewis, Krajic & Krajic-Tomin (2009), there are gaps between the aid commodities which are required during emergency responses and those sent. These gaps do not appear on actual procurement and other logistic activities, but due to restriction and/or shortfalls, actual procurement of commodities can only take place after the disaster occurred and donor funds that come in can be sensibly expected. The shortfalls can be the amount of goods and services required, in this case it greatly increased due to destroyed infrastructure and insecurity, which usually limits the possibility of locally purchasing. It also has been stated by Bandaranayake, Johns & Kull (2014) that trade and border policy bring gaps in humanitarian aid procurement, and it significantly increases the price and the delivery period.

  • Procurement Strategy

Bower (2003, p. 1) argues that businesses are changing, and they need to work with partners and have a saustinable relationship. In response to these changes, procurement strategies are essential in fulfiling balance work, motivation and risk for long-term, and for sustainable performance. Michiel (2002) reiterates that strategy is an action plan which allow great achievement of set goals and objectives. The author argues that procurement strategy include other smaller strategies developed using accessible data in preparing a schedule directed at achieving a particular purpose. The author grouped procurement sub strategies into five major categories.

Assurance-of-Supply Strategies”: ensure the future supply requirement are met, at least in term of quality and quantity.

Cost-Reduction Strategies”: intended to ensure the reduction in the sum of whole acquisition cost, and by transforming technology and the environment while providing alternative sources in the procurement method and procedure and by building buyer – supplier relationship.

Supply-Support Strategies”: “Environmental-Change Strategies”, “Competitive-Edge Strategies”.

Gadde, Hakansson & Persson (2010) provide three alternative purchasing strategies. The conservative network strategy: in this strategy, supplier involvement relationship is low, the firm perceived benefits related to market exchange, the authors argue that when each transaction is made as efficiency as possible, overall efficiency is maximized. This encourages suppliers to compete, and the buyer has a thin relationship with the supplier. The liberal network strategy: this strategy give access to the buyer to maintain a mix of high and low involvement of the supplier, in some situations, extensive collaboration is needed with the supplier, while other transaction may be governed through market mechanisms. This strategy is more useful when doing outsourcing. The radical network strategy: the perspective of this strategy is that the involvement of the supplier is the norm of purchasing.

Figure 8. Strategic Purchasing Planning Process. (Michiel, 2002)

Shanley (n/a) claimed that there are three different types of procurement strategies; specific strategies, its role is in supporting other functions strategies, and its utilization as a strategic function.

  • Strategic components

Choosing a specific strategic opportunity will lead in the formulation of procurement strategy. Therefore, any chosen strategy must properly answer what quality, how much, who, when, what price, where, how and why (Michiel, 2002). What make should we buy, is standard better than special? When choosing quality, do we go for supplier involvement or quality, and how much is the product? Is choosing large quantities better? Who is responsible for decentralizing the product? Does the product get delivered later or now? Is the price standard, lower, premium or market based? Where is the production? Are the ethics passive or aggressive? What is the research for value analysis for all suppliers?

  • Characterstisc of Strategic Procurment Function

Dominick &Lunney )2012( remark the below twelve characteristics for strategic procurement function, in contrast of tactical procurment, spend analysis, implementation of tehcnology, strategy used for sourcing process, management-supplier relationship, development of project plants, forecasting, supplier development, responsibility for the industry, process optimization, involvement in particular development and stakeholder sypport at Garner.

Strategic procurement Planning

NIGP & CIPS (2012) argue that Strategic planning in procurement is essential to align the goals of a business to its measurable activities in planning, budgeting and management of procurement function in the firm. The ultimate goal for this is creating a positive transformation in the culture of an organization, and its operation processes. It also has been segmented into two;

The first part is developing the strategic plan which allows the procurement department to align goals, programs, activities, and resources with the mission of the organization.

The second part allows procurement to determine how it is going to accomplish the elements set forth in the strategic plan” (NIGP & CIPS, 2012).

Charles Dominick (2012) state that alignment of procurement strategies and objectives with organizational goals will result into excellence accomplishment of organizational goals.

Shanley (n/a) also argued that any strategy for procurement has to support functional strategies and the larger corporate culture, and it is, therefore, critical for top management to acknowledge vital roles that procurement play in developing competitive advantages in a firm.

Saunder (1997, p. 17-18) explains the importance of procurement strategies that could impact the structure of supply chain and performance of other stakeholders in supply chain. The author explained that the pursuit of improvement in methods, decrease and eliminate waste of resources throughout the supply chain can contribute to “leaner” performance and increased value for the end consumer. The planning process in procurement is very vital for on time and effective acquisition of proposals and bids, as well as in the requirement to deliver goods and service without fail (Ribeiro, 2009). The author expressed that in some ways, the procurement plan is the “reverse side” of the project schedule. “The procurement lead time for each task will be calculated according to the method of procurement concerned, considering, for instance, whether the competitive bidding for works will be open to national or international bidders), the financiers’ procurement procedure, and the agreed-upon review process”.

Bandaranayake et al.  (2014, p. 30) consider the humanitarian procurement planning as such factors as price, availability of the products to the perception of receiving beneficiaries, as well as location of the most beneficial places to buy relative to the area of need.  Buddas, (2014) insists that a humanitairian disaster required long-term procurement planning “(practical and strategic planning)” as well as organizaitonal commitment in order to avoid bottlenecks in a humantarain disaster opereration.

  • Procurement contingency planning

Natural disasters, wars, political instability, weather changes and any other unexpected risk may cause procurement crisis (Dominick & Lunney, 2012). Don’t wait for a crisis to arrive, develop a contingency plan to avoid being out of business. The author specified the below points to be taken into consideration in any procurement contingency plan. Establish strong supplier relationships now: the authors claim that having a strong relationship with a core supplier will reduce workforce during crisis, as they know more than ever. Make sure supplier has contingency plans: a crisis may affect the supplier. Adjust sourcing strategy: sourcing from single supplier gives an edge to lower pricing. In time of crisis, this strategy increases risk. Building a relationship with multi-source will decrease the risk. Reevaluate inventory levels: during a crisis, demand for goods or services will change. The authors’ purpose the lean inventory approach to response to the crisis. Assess the location of supplier: globalization of trade increases global sourcing firms to bring the product cost low, assess the vulnerability in case of natural disaster, influenzas and any other unexpected risks. Revise Force Majeure clause: add terms in contract which is beneficial during crises. Prioritize department tasks: identifying the critical task which should be done during crises. Establish a disaster recovery plan: work and coordinate with other departments to develop a plan for unforeseen events that may need evacuating the facilities, and the employees should be able to work from a remote location,

  • Human Resource issues

Kovács & Karen (2007) argue that a quick response from aid organizations in the event of a disaster is dependent “on the ability of logisticians to procure, transport and receive goods and service at the site of a humanitarain relief effort”. 

Saunders (1997, p. 19) states that staffing aspect should never be neglected, and it is critical for the successful implementation of strategies. The author argues that the knowledge and skills of the staff contribute to the capability of the function, empolyee development, trainings, reward schemes and management styles, all these contirbute to the culture of functioning.

Charles Dominick (2012) argues that procurement strategically must be aligned with organization mission, objective and other functions, as well as importance of itself which is crucial. They must have solid, essential procurement capabilities, analytical skills, advanced computer expertise, skills in contract management and execution, law, procedure and policies, project management skills, relationship building, strategy development, leadership, international, supplier relationship management skill and negotiation skills. The author also argued that “the manager need to have all the skills of his or her employees, plus the ability to: align the procurement departments objectives with the mission and vision of the overall organization. Implement initiatives and best practice that support the mission and vision of the overall organization. Provide effective leadership for their staffs and the procurement function in general. Be a change agent”.

  • Agile Supply Chain

Robinson (2016) defines agile supply chain as the application of flexibility, competency, responsiveness and guickness in managing supply chain entities on a day to day routine. The author also states that agile supply chain must apply the use of real time information with an update of the same information. According Christopher (2000), to influence an existing operation and information that is current against real-time data and against forecasted demand helps in improving efficiency and productivity of that particular entity.

The author claims that supply chain agility helps in eliminating possible shortages, as well as doing away with stored inventory. Chopra & Meindle (2013, p. 45-46) argue that agile  intercompany choice refers to a firm’s ability to achive strategic fit when partnerning with supply chain phases that change overtime. According Oloruntoba and Gray (2006), humanitarian supply chain have been argued to be the most agile. The authors explain that the core compentence is to overcome with different types of disasters as also cited by Kovacs & Spens (2009, P. 507).

(Oloruntoba, 2006)

  • Lean, Agile & Leagile Supply 

The representation of the portfolio purchasing model comes with an allocation of components to one of a limited set of the four supply options of agile, lean and non-strategic for the purpose of planning accordingly. This does not mean to produce single purchasing strategy for every option, but instead create a universal characteristics of the approach developed. The author expresses that a question raised when using this model is, “How do we perform the allocation?”. Response for this answer is hidden in lean being one of the best quality and cost effective compared to agile supply, which is known for its flexibility and time. Therefore, if a product achieved a huge influence from all four factors, then Leagility is needed  (Drake, Lee, & Hussain, 2013).

Allocation on all supply options is done from a two-dimensional approach formed by a component’s level in combination of quality and cost that reveals the level of leanness needed, while combining it with an impact of time and flexibility as shown in the Figure below. Power insinuation is dependent on how the firm has prioritized competition. Taking for instance, an approach could have a huge impact on cost and has the business competing against cost then impact in this case is very vital. If the same business competes against flexibility, the cost influence does not matter. This means that the weight of an impact must be interfered with on competitive priorities as evident in the application of the Analytic Hierarchy Process (AHP) (Drake, Lee, & Hussain, 2013).

Leaness and demand both need product quality of high levels. However, a minimum total of lead-times must also be achieved from the time taken for a product to reach the consumer from the time of order. To enable agility, the time of total lead must be shorter and demand goes up and, therefore, it could be very hard to forecast (Christopher & Towill, 2000).

  • Lean supply

Nicoletti )2013) argues that due to the economic current crisis, firms have learnt the significance of Lean. This knowledge they can use to improve the value of products delivered to consumers and cost reduction. The author emphasizes that it’s important for procurement process to be as lean as possible, so that its processes may be right with procurement.

Factors that affect the cost and quality are best suited for lean supply. Durable relationships with suppliers with an agreement on cost and quality could help improve efficiency, just like it was the case for Toyota Construction of the 21st century. Organizations should make sure that the standards components mentioned are incorporated in the various final products. With this action, there will be a reduction in the overall stock level and cost of production because of the significant increase in production and economies of scale. However, there is a possibility of buying standard components in large quantities through international sourcing which provides an immediate increase in quality and reduction of cost (Drake, Lee, & Hussain, 2013). 

The longer the process for lead time in global suppliers, the more the expenses, but the quicker the process in local supply which could be useful in agile supply. This process included several levels of service agreements that meet different performance objectives.

  • Agile supply

Holbeche (2015) argues that agile is a complex concept that can take multiple procedures. It delivers an organizations ability to develop and rapidly apply flexible, nimble and dynamic capabilities. Agile is the possibility to succeed and grow in an area of unpredictable change and contant transformation (Oloruntoba, 2006, p. 116).

As per Thomas & Kopczak (insert date), the “demand for accountability, transparency and value for money should not be compromised, in return for NGOs sponsership of humanitarain aid agencies. Humanitarian agencies are required to be more professional in their approach to meet the challenging performance and accountability standards. According to Van Wassenhove 80% of humanitarain aid operations include supply chain managementactivities” as cited by Scholten, Scott, & Brian Fynes (2010, p. 623)

  • Reliability

If different researchers examine the same topic area and carbon copy results are gained, then the research strategy can be considered reliable. Using nonstandard research method like semi-structure interviews, however, can allow for an exception to this rule, as interview reflects the reality at the time the interviews were conducted. This reality can be changed at any time so it would be impracticable for different researchers to reach the exact same results using non standardised data collection techniques (Saunders et al., 2009).

Bias though is an exmple of a possible issue that can lead to non-standardised research to be unrelaible. This bais can come from the actual interviewer and researcher, or from the interviewee. Saunders et al. (2009) argue that a researcher should document and retain notes on why a particular research strategy mehtod was chosen.

  • Validity

Validity comes to attention if the results collected are an inaccurate reflection of reality. A mutual risk for researcher may arise when using non-standardised data collection techniques like semi-structure interviews, and the interviewee may not be in a reliable or appropriate position to answer the questions being asked. The author took this under serious consideration when contacting potential respondents for the interview (Saunders et al., 2009).

  • Research sample