Distinguished scholar explains how supply chain systems are being tailored for humanitarian purposes

Humanitarian organizations need the help of the technology and operations management discipline, Luk Van Wassenhove said recently at Texas A&M’s Mays Business School.

He is the Henry Ford Chaired Professor of Manufacturing at INSEAD and academic director of the INSEAD Humanitarian Research Group, and his current research focus is on closed-loop supply chains and disaster management – a relatively new research area in the discipline of operations management.

Mays Dean Eli Jones invited Van Wassenhove as part of the 2016 Dean’s Distinguished Scholar Lecture Series at Mays – a forum that presents distinguished scholars from an array of business disciplines.

Van Wassenhove publishes regularly in Management Science, Production and Operations Management and many other journals as well as in management journals such as Harvard Business Review and California Management Review. He has written at least a dozen books, including Humanitarian Logistics, has published more than 300 papers in peer-reviewed journals and has worked on problems in industrial engineering (production-inventory control, transportation and warehousing). He is also the author of 78 teaching cases, many of which have won best case awards.

“I thought I knew everything about closed-loop supply chains, but after meeting with humanitarian operations, I realized I don’t know much at all.”

Van Wassenhove’s education on the topic came by immersion in 2000, when he was called by the supply chain manager of Red Cross International to go observe operations in Geneva. “I quickly realized there are a lot of challenging, interesting and fascinating problems there,” he said. “It is intriguing to me, and it is very important work. But make no mistake – this is not about doing good, it’s about developing a better closed-loop supply chain. It’s about survival.”

The military and businesses have the resources – people and money – to respond to disasters, while humanitarian agencies don’t. He said the problem is an ideal scenario for supply chain – the act of matching demand with supply. But first things first: “How can you set up a supply chain if you don’t know the demand or the supply?”

Van Wassenhove said about 95 percent of his work is applicable for real companies, rather than theoretical. In addition to the Red Cross, Van Wassenhove has worked with the United Nations, the World Food Program, UNICEF, Oxfam International and World Vision International.  

Humanitarian organizations have been working in rural areas and are not familiar with working in urban areas, he said. Of the world’s 1 billion undernourished people, he said, about half live in cities. By 2030, that number will reach 75 percent.

One of the greatest challenges after a disaster is when donations arrive from outside the area. When things are donated, the inventory is perishable, so is often wasted. “If you really want to do good after an earthquake or flood, give money, not stuff,” he explained. “The relief workers know how to get what is needed.”

Another hurdle is the influx of pledges that often don’t convert into “real money,” he said, or they take a long time to arrive. The critical time for funds is within the first 72 hours.