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Operations Article | "Supply Chain Issues in Disaster Management"

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Supply Chain Issues in Disaster Management

- by Madhuker Priyesh & Varun Ramanan *

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Evaluating the two types of chains in various perspectives gives the following decision criteria::

Comparison of Efficient and Responsive Supply Chains

Efficient Supply Chain Responsive Supply Chain
  Primary   Goal Supply demand at the lowest cost Respond quickly to demand
  Inventory   Strategy Minimize inventory to lower cost Maintain buffer inventory to deal with demand/supply uncertainty
  Lead Time   Strategy Reduce but not at the expense of costs Aggressively reduce even if the costs are significant
  Supplier  Strategy Select based on cost and quality Select based on speed, flexibility, reliability and quality

As we shall see later, following the inventory strategy for responsive chains, contractual agreements will lead to buffers of inventory for any exigencies. Similarly, since the time factor is the most important one in such disaster mitigation and relief work, distribution of necessary supplies would require immediate action rather than cost reduction at various levels through optimization in logistics. These facts give a basic idea about the various levels and strategies in building the supply chain.

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* Contributed by: -
Madhuker Priyesh & Varun Ramanan,
IIM Lucknow.


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