Latest job opportunities (January 11, 2010)

by Michael Keizer on January 11, 2010

[Image: Job opportunities by Coffeechica]

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Humourless links for January 10, 2010

by Michael Keizer on January 10, 2010

[Image: Liquid Links by Desirae; some rights reserved.]

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"Mailboxes" by Minesweeper @ Wikimedia

Five-party logistics?

I have written several times before about supply chain visibility, and where it will lead us. One of the main reasons why visibility will be such an important issue for the foreseeable future, is because third-party logistics (or 3PL) will become more and more important.

So, I hear you ask, what is this 3PL? And why would it become more important? And, last but not least, why would that imply that supply chain visibility would become more important? I will write about those last two questions in a next post; this post will concentrate on an explanation of 3PL and its advantages (and disadvantages).

To explain this, let’s have a look at a fairly common scenario. Let’s say that you are the logistics manager of an aid organisation that has a central warehouse in the capital, and a couple of projects around the country, and you need to send a shipment from the central warehouse to one of the projects. Basically, you have two choices:

  1. You use your own transport, sending a truck (owned or rented) with the shipment from your central warehouse to the project. As you are the ‘first party’ in the shipment, this is known as first-party logistics or 1PL.
  2. You contract a transport company to ship the goods to the project, based on a contract and a waybill. The transport company (or as loggies like to call them, the carrier) is also known as a ‘second party’, and hence this is an example of second-party logistics or 2PL.

Most likely you now have an idea where this is going, but let’s spell it out anyway. Instead of having your own warehouse and trucks, you could have an external provider organise all this for you. You only need to tell the provider that a shipment made up of so many of this item needs to go to that project, and they take care of the rest (at a price, of course). A provider who offers this sort of multiple, integrated services, is called a third party and (you guessed it) this is an example of 3PL. 3PL providers come in all kinds, some offering a wider array of services than others; some very familiar ones are international couriers and international postal services, and freight forwarders: all three offer to organise your shipment across a variety of carriers and often (but not always) include clearing services.

Needless to say that there is actually an animal called fourth-party logistics (or 4PL), but I will leave that one for another day.

The reason for 3PL to exist at all is threefold:

  1. 3PL providers are specialised in integration of links in the supply chain, and they can levy much more expertise in this field than any aid or global health organisation ever will be able to. They know the markets to the last digit, have extensive knowledge of and experience in integrated supply chains, and have seen the same issues crop up over a variety of organisations – and know of many techniques to overcome these issues.
  2. 3PL providers can leverage economies of scale through combined facilities and shipping at much larger scales than any but the biggest aid and global health organisations, potentially providing better efficiency.
  3. 3PL allows for easier up and down-scaling: as our needs change, we can just use more or less of the provider’s services, instead of having to deal with a restructuring of our organisation (including possibly painful measures like lay-offs, or, conversely, having to go through expedited hiring of new staff, with all kinds of risks attached).
Untitled by PACOM @ Flickr

3PL by the US and Indonesian armies on behalf of USAID.

Of course, there are good reasons why 3PL can be a very bad idea, too – or even impossible:

  1. Aid and global health work often takes place in places and markets in which 3PL providers have no or very little experience, which might mean that their general expertise does not add that much value.
  2. In some contexts in which we work, 3PL providers (and, indeed, 2 PL providers) do not operate because of security constraints.
  3. Specifically for humanitarian aid, it is important to adhere to standards of neutrality and impartiality; it can be difficult to verify that 3PL providers do so, and the added limitations could mean that they are not able to offer any increased efficiency (e.g., it implies some limitations regarding combined cargo).
  4. In case of disaster response, many 3PL providers would have difficulties dealing with the damaged and overburdened infrastructure, which aid organisations have much more expertise in.

Yet, taking all this into account, I still foresee that we will use more and more 3PL services. Stay tuned to read why.

[Images: Mailboxes by by Minesweeper @ Wikipedia (public domain); untitled photo by Pacom Webmaster (some rights reserved).]

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Humourless links for January 3, 2010

by Michael Keizer on January 3, 2010

Big h/t to the humlognews newsletter.

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The challenge of reverse logistics in global health

by Michael Keizer on January 2, 2010

The Valley of the Drums, a toxic waste dump in northern Bullitt County, Kentucky. This site was one of the reasons the the U.S. Superfund law was enacted.

Have you ever thought about the reverse logistics in your supply chains? Very likely if you are involved in medical logistics, but probably not in those terms: reverse logistics is not something that comes up on a daily basis in discussions in our field.

Reverse logistics is basically what happens when goods need to flow back in the supply chain. The most obvious example is of course when expired drugs need to be sent back for proper disposal, but reverse logistics might actually be more common than you think: disposal of materials and equipment, recalls, returns of overstocks so they can be used somewhere else in the organisation: these are all examples of reverse logistics.

Yet we hardly ever put systems into place that deal with our reverse logistics; possibly because it is seen as an exception instead of the regular occurrence that it actually is in many organisations. The results are predictable: losses and negative side-effects are common. Some examples:

  • Financial losses Most organisations would have tight controls on expensive goods as they travel through the ‘normal’ supply chain. However, I have seen many instances in which these controls were absent or much less stringent when dealing with reverse logistics. In one example, when trying to see what happened with a large generator (value: several tens of thousands of dollars) after it was sent back for repairs, I discovered that nobody had actually followed up after it was sent back and a replacement arrived, and in the end it was untraceable. This was a big and unnecessary loss for the organisation.
  • Negative health effects If expired drugs are taken from the reverse supply chain and used (possibly after having been sold on the local market), they can wreak havoc on the health of the people using them; some drugs become toxic after some time, but even those who do not will probably start losing efficacy and would be as bad as under-strength counterfeit drugs – and that is even apart from the effects of uncontrolled use of e.g. antibiotics on the development of resistant strains.
  • Environmental damage Drugs might be beneficial for us, but they are not always so for our environment. Many drugs are toxic for other animals and plants; and even when they are not, it is not always clear what would be the long-term effects on the environment of uncontrolled dumping of drugs. That alone should be enough to have tight controls on what happens with expired drugs and how they are disposed of. This is even more true of e.g. used engine oil and other toxic waste: do you know what happens after an oil change? Is the oil just burned, or even worse, buried, possibly poisoning ground water for years to come? Or is it properly disposed of in an incinerator that reaches temperatures that are high enough to prevent hazardous fumes to be formed?
  • Legal liability In many countries where we work, there are strict laws surrounding disposal of drugs (especially psychotropic drugs), and ‘losing’ drugs in the reverse supply chain can open us to legal liability. Similar issues arise around environmental damage.
  • Loss of reputation Although there is still not much press attention for aid and global health organisations’ records when it comes to the effects I mentioned above, I don’t think it will be too long before our actions in this area will be put under the microscope as well (as they should be). Do you really want your organisation to be the first of the black sheep that will be singled out for our atrocious reverse logistics practices?

It is clear that we need to start working on our reverse logistics. It should not be too hard: the basic principles and best practices that we use in ‘normal’, forward logistics, can be used in reverse logistics too. The only question is: do we start working on this now or will we wait until it is too late?

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Latest job opportunities (November 21, 2009)

by Michael Keizer on November 21, 2009

[Image: Job opportunities by Coffeechica]

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Rollin’, rollin’, rollin’: herding river horses

by Michael Keizer on November 20, 2009

The day, water, sun, moon, night – I do not have to purchase these things with money.

– Plautus

Was Plautus ever wrong.

It seems that it has been quite a while since I have written about the logistics of daily life, so let’s have a look at the logistics of what must count as the most daily of our needs: water.

image First a truism: water is heavy. Just try to haul around 90 litres of the stuff and you will totally agree with me. In fact, it is so heavy that carrying it can lead to severe health problems. E.g., a 2003 Lancet article describes how 30-40 percent of a rural Tibetan population suffered from chronic back pain (a severe condition in a predominantly non-mechanised agrarian society), before an intervention aimed at correct carrying techniques and the building of ‘back-happy tap-stands’ (no, I really didn’t make that up – see the picture to the right to get an idea what it looks like).

In the developed world, we use this really nifty invention for our water logistics: pipes, a technology that has served us well for more than 2000 years (although one shouldn’t underestimate the amount of lead poisoning it has caused over the years – there are theories that it even contributed to the downfall of the Roman empire, although they are unlikely to be correct). For the moment, though, it is unlikely that water infrastructure will come any time soon to the remote areas of least-developed countries: the average Tibetan or Ethiopian subsistence farmer will still need to haul their water from a backbreaking distance.

That is why the hippo roller is such a great idea: by transforming the container itself into a wide wheel-like contraption, 90 litres of water at a time can be dragged around with a lot less effort: those 90 kilograms of water suddenly seem to weigh a lot less, and of course it can be transported much more hygienically than in an open container. So is it all downhill work from here?

Of course not. Even the hippo roller has some drawbacks that need to be worked on. Probably the most important one is… well, you guessed it, it is logistics. To make this a winning proposition, hippo rollers really should be produced close to where they are used, instead of shipped halfway across the globe: one of the litmus tests for the appropriateness of technology is whether it is feasible to produce it locally. A second issue is penetration: up to now, around 30,000 of them have been distributed, which is (if you allow me a very lame pun) nothing but a drop of water in the ocean. Such small numbers mean that it we really don’t have enough experience yet to know whether it really is such a good idea as it seems to be. It also means that there is no hippo-roller-repair man in every village, which means that it is unclear what happens with damaged rollers; and as I haven’t been able to find any evaluations yet, I really don’t know how long the average roller holds up in real life, or how easy it is to repair when it does get damaged.

Still, it is a good example of how creative thinking about logistics can help us to come up with ideas that will help the majority world immensely – and of how important logistics is for the daily life of all of us.

[Images: tap stand from the article by Hoy, Toole, Morgan & Morgan; uphill Hippo rolling by Project H Design. Some or all rights reserved.]

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Latest job opportunities (November 19, 2009)

by Michael Keizer on November 19, 2009

[Image: Job opportunities by Coffeechica]

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Simplicity, participation, and some tall tales

by Michael Keizer on November 18, 2009

Usually, I find myself nodding enthusiastically when reading J.’s Tales from the Hood; his thoughtful mini-essays on humanitarian aid work (with, as he describes it, “occasional digressions toward rock music, motorcycles, and parenthood”) have from time to time even been known to make me belt out a loud “yeessss!!!”, accompanied by fist-pumping motions that look totally ridiculous on a bespectacled, bald, overweight forty-something.

But this time I found myself frowning, and actually disagreeing vehemently. In his latest article on “rules to live by”, he writes:

Don’t overdo “process.” Yessssssssssssss, process is important. But process is not the actual point of aid work. The point is product, output, outcomes, impacts, benefit to beneficiaries… [INSERT PREFERRED AID-WORLD BUZZWORD]. If your process doesn’t lead to one of those in fewer steps than you have fingers, then it is probably useless and should be fixed or abandoned immediately.

And then:

Don’t overdo “participation.” Sometimes less is more when it comes to group decisions and group-led processes. If you can make the decision, make it. If you must involve others: Involve the lowest number of people practical for operational decisions. Involve only technicians and/or those with direct managerial authority over the project in question on technical decisions.

Of course, of course J. is right that outcomes are more important than process – but I think he overstates his case when it comes to the simplicity of the process. By total coincidence, I posted a response yesterday on humanitarian.info in which I said, “… if your solution can be written on a postcard, it probably solves nothing”. This was the summation of a four-paragraph argument that silver bullets don’t exist, that we need to look at systems as a whole when searching for solutions to issues, and that consequently those solutions will hardly ever be simple. To put it another way: we don’t live in a Hollywood movie; our problems will not be resolved in two hours in a script that can be gleaned from a one-page summary.

It all comes back to what I wrote in my post about ICT versus systems: if you want progress, you will need to do much more than just introduce yet another tool or another procedure – you will need to tackle the system, and on the whole systems don’t respond too well to short, sharp shocks. And all this with the caveat that, yes, of course there will be complex issues that can be resolved in a simple manner – but not that many.

Similarly, although I agree totally that one shouldn’t ‘overdo’ participation, I think that J.’s rules of thumb (“If you can make the decision, make it. If you must involve others: Involve the lowest number of people practical for operational decisions. Involve only technicians and/or those with direct managerial authority over the project in question on technical decisions.”) are overly simplistic. Yes, of course I keep the final responsibility as the manager in charge, but I can use inclusive process[1] to:

  • build consensus, which will make my life much easier when finally implementing what needs to be implemented – and in many cases actually lead to an increase of effectiveness and efficiency, because the time spent on participation is outweighed by the time saved on implementation;
  • get feedback in an early stage that can make the difference between doing something stupid or doing something smart – and so improve our product/outcomes/impacts/benefit to beneficiaries/whatever. In other words: sometimes the street sweeper knows more about how to deal with autumn leaves than the dendrologist.

And now go and add Tales from the Hood to your feed reader – because J.’s writing shows that he doesn’t take his own advice on simplicity too seriously and really thinks about what he does; and that is a treat that is all too rare in the testosterone and adrenaline filled world of humanitarian aid.

[Images: simplicity by Gisela Giardino; Participation 12 pack by dharmabumx. Some rights reserved.

Back to post [1] Okay, so I have to admit that I have thrown that one in purely to be provocative. Can I have a bit of fun sometimes?

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Latest job opportunities (November 13, 2009)

by Michael Keizer on November 15, 2009

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