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Inventory in a supply chain arises due to mismatch between supply and demand. The idea is to fulfill demand at all levels while maintaining economical production. In the present context, maintaining high level of physical inventory is not possible as it would lead to huge costs due to rarity of disasters.
However, as seen earlier, a responsive supply chain demands buffers of inventory. As we’ll see, this problem is solved by maintaining virtual inventory through contractual agreements. This could be made available in short lead times. Also at the regional levels where the disaster has occurred, buffers of inventory for a relatively prolonged period of time would be required to meet any exigencies.

Transportation is the backbone of timely deliveries in the supply chain. Faster transportation in the form of different modes of transportation or different amounts being transported, leads to higher responsiveness while reducing efficiency. In the present context, the primary responsibility would be of the government and the main mode of transportation would be railroads and roads. Depending on the geography and location, other modes like sea and inland water could also be used. Affiliation with 3PLs at t hecentral level and leasing at the disaster affected areas would be the right strategy for outsourcing of logistics resources. This is important since resources can’t be owned specifically for disasters whose timing and location are varied.

Information is the key to responsive supply chains. In a normal supply chain environment, mismatch in information could lead to huge losses due to bullwhip effect. In the disaster management perspective, information quality and speed is most critical. While at the end stage, extent of damage and requirements are important, at the central level it allows for overall co-ordination. Usage of high end mapping technologies (self developed or through charity organizations like Mapaction) helps in overcoming this difficulty.

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