A Humourless Lot

• Africa to meet the MDGs? I would be surprised, but stranger things have happened.
• Yet another illustration of why logistics is so important for global health.
• Emergency preparedness has come up more than once on this blog. Luckily I am not the only one to pay attention to it, but why is the call for better preparedness so often ignored?

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

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Distribution center of Kühne + Nagel in Hamburg, Germany. K+N is one of the largest 3PL providers in Europe.

We have seen what third-party logistics is and what are its strengths and weaknesses; and why it will be part of logistics for global health and aid. But what does this mean for us? What will change in the way we work?

Improved information management practices

To be able to work well with 3PL providers, we will need to improve our information management: without knowing fairly well what needs to go where (and hence, what is where and what already goes where), we will not be able to enjoy the advantages of 3PL. What’s more, the more advanced 3PL providers have developed their own supply chain visibility solutions; and not only that, but often they are keen to help us to make our own systems interoperable with theirs, which almost inevitably will lead to better systems for our own use. They do that, not from the goodness of their hearts, but because their customers asked for it – you know, “no delegation without verification” – and because they think that better interoperability will also lead to better efficiency of their own processes.

Smaller logistics departments

If we can outsource all or most of our boring, ‘routine’ logistics work to 3PL providers, our own logistics departments can concentrate on those logistics that are not easily transferable: because they are in high-security settings, or because of specific sensitivities that mean that we cannot use 3PL providers without damaging our operations, or because they are in places where, quite simply, there are no 3PL providers. What remains is a small, highly specialised, highly professional, very flexible unit that delivers four types of services: supply chain management in places where 3PL providers cannot deliver or their services are not acceptable; leadership and coordination of quick scale-ups of operations in case of a sudden emergency; development and monitoring of logistics policies and contracts (including those with 3PL providers); and specialised logistics input for development of policies in other areas and for management.

Bigger logistics departments

Got you there, didn’t I?

Think of this: why would 3PL providers necessarily be from outside the aid world? We already see some 3PL activities from aid organisations themselves, e.g. WFP’s role as logistics provider of last resort in the cluster system. So why wouldn’t some of the larger aid organisations with strong logistics capacities act as 3PL providers for smaller organisations? I can easily foresee that organisations like WFP, MSF, or Oxfam, or perhaps even some governmental health logistics units would start delivering 3PL services to other aid organisations or even ministries of health. After all, they know better than most generic 3PL providers how to operate in the settings where we work, and hence can provide even better (and probably cheaper) services. These hybrid service delivery organisations will, by necessity, grow larger than they are now.

Greater logistics departments

Whichever of these choices these departments make, it will always allow them to become better than they are now: more specialised, more focused on their strengths and less exposed in their weaknesses, more flexible, more efficient, using synergies where they occur (instead of ignoring them as we often do now).

So what are your views? Is this too rosy a picture? Are you already going this way? Things I have missed?

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• Yet another scholarship from the awesome Zaragoza Logistics Center.
• The British Red Cross combines fundraising and teaching people about the logistics realities of a disaster in a hands-on, weekend-long exercise. Looks very appealing. The BRC has been raising its logistics profile over the last year or so in some very interesting ways.
• Forward Accountability: the best new development in development since the air-conditioned Landcruiser.
• Well, well, well. The UN waking up to the importance of logistics for peacekeeping.
• Sigh. Condoms costing lives? Hardly.
• I have said it before and I will say it again: aid is complex and trying to simplify it does not help. Luckily I am not the only one to say so.

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

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• One that is a bit different from our regular fare: Emory University (Atlanta, USA) is looking for a coordinator, programme logistics to coordinate distribution of a large donation antibiotics for the International Trachoma Initiative.
• IRC is looking for for a senior logistics coordinator for Congo (DRC), a logistics technical specialist for Chad and Congo (DRC), a logistics process and controls documentation consultant for their HQ in the USA, a logistics manager for Haiti, and a logistics coordinator for their refugee programme in the USA.
• Merlin is looking for logisticians for North Maniema, Congo (DRC) and for Haiti/Dominican Republic; logistics coordinators for Liberia, Kenya, Haiti, and Congo (DRC); and a supply chain coordinator for Congo (DRC).
• Oxfam GB is looking for a regional logistics manager for West Africa, based in Dakar (Senegal). Apparently they are also looking for a regional logistics manager for Latin America and the Caribbean and a logistics coordinator for Sudan, but this is not advertised on their own site.
• Save The Children UK is looking for a logistics adviser for Angola. They also seem to be looking for a global supply chain manager (based in the UK), but I cannot locate this vacancy on their site.
• The IMC is looking for logistics coordinators for Haiti and Congo (DRC), and a logistics and commodities officer for their HQ in the USA.
• Management Systems International (MSI) is looking for an administration and logistics coordinator for Afghanistan. They also seem to be looking for a deputy chief of party, finance and logistics management for Afghanistan, but that vacancy is not advertised on their own site.
• The Louis Berger Group is looking for an administration and logistics coordinator for Afghanistan; I suspect that this is the same position that is advertised by MSI. They are also looking for a procurement manager for Afghanistan.
• Intermón Oxfam is looking for a logadmin officer for Abéché (Chad) and a logistics officer for Warrab State (Sudan).
• The American Refugee Committee (ARC) is looking for a logistics and security coordinator for Haiti.
• Apparently, the Samaritan’s Purse is looking for a program manager, logistics for Haiti, but this vacancy is not advertised on their site.
• Populations Services International (PSI) are looking for a consultant, operations and logistics technical advisor for Haiti; and a contracts analyst, a contracts assistant, a senior Zprocurement and logistics officer, a voluntary pooled procurement and logistics officer and a senior ditto, all for the HQ in Washington DC (USA).
• Solidarités are looking for a logistics coordinator, a logistician, and a distribution manager for Haiti; an administrative and logistics coordinator for Zimbabwe, and a logistics and administrative field coordinator for Teknaf (Bangladesh).
• ACTED is looking for logistic interns for Chad and Haiti, country logistic managers for Sudan, Chad and Haiti, and country logistic and security managers for Yemen and Iraq.
• UNICEF are looking for a logistics officer for Sierra Leone, two supply and logistics specialists for Senegal, a senior contracts assistant for their HQ in New York (USA), a logistics specialist for Chad, a procurement assistant – planning for their supply division in Copenhagen (Denmark). As usual, their vacancies are hidden in a password-protected system, so I cannot link. Please don’t forget to bitch about this when applying!
• The British Red Cross is looking for a logistician for their emergency response unit.

Sigh. Did anyone read my earlier rant on bad job advertisement practices?

[Image: Job opportunities by Coffeechica]

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In my first article on 3PL, I explored the concept and some of its advantages and disadvantages. In this article, I will explain why I think 3PL will become more and more important for global health and aid.

The push for economy

Rightly or wrongly (and if you followed this blog you know where I stand on that question), there is a big push from donors to economise on ‘HQ’ or ‘overhead’. This means that the pressure is on to decrease the size of departments in headquarters, including logistics departments^[1]. Conversely, when there is a crisis, it is fairly easy to get donors to fund the necessary extra capacity that is needed specifically for that crisis. This fits very well with the 3PL model: when there is a crisis, we can quickly ‘buy’ additional capacity.

Of course, this is sound thinking anyway, even apart from donor pressure: why would you want to pay for capacity when it’s not necessary? Large logistics departments are often legacies from a different era, when it was normal to have everything in-house and outsourcing was unheard of.

The move to urbanised settings

As more of the world’s population is concentrated in urbanised areas, more of our work is done in those areas too. Especially in aid, the idea that our work would take us mostly to out-of-the-way locations in the bush, is thoroughly antiquated: more and more, we work in the shantytowns, slums, barrios, favelas, or whatever they might be called. Local 3PL contractors (see the picture to the right for a good example) are at an advantage here compared to having our own transport fleet. Specifically for aid activities, an added bonus is that we pour more money in the local economy instead of using the iconic, imported white landcruiser.

But even more conventional 3PL providers have an edge here: unlike in many more rural areas, they do have a presence in and knowledge of most cities and many towns. I haven’t worked in any capital yet in which they were not represented, and very few larger towns.

New models of cooperation

Many 3PL providers are actively trying to acquire knowledge of and expertise in fields that were traditionally the preserve of specialised organisations like NGOs and ministries of health. They see large growth opportunities and are keen to get on board, learning as they go in order to be able to deliver better quality than the competition. This also means that they are prepared to cooperate in new ways, using new models that are a better fit with global health and aid work; e.g. temporarily stationing staff within a logistics unit to improve support and communication, or helping to make information systems interoperable (something I will write more about in the next article in this miniseries). For us, this is a big opportunity to improve our effectiveness and efficiency by using what the providers offer in the way of expertise and (not unimportantly)  funds and operations scale.

Where this will lead us

It will be clear that the use of 3PL can have big advantages for global health and aid. However, to be able to use the opportunities that are offered, we will need to work hard on some of our outlooks and practices. In the next article in this series, I will describe what this will mean for how we work.

[Images by Erik Söderström and C. Frank Starmer. Some rights reserved.]

Footnote

Back to post [1] This is actually becoming a bit less of an issue for health authorities now that there is more attention for ‘systems strengthening’. Perversely, it is actually becoming more important for aid organisations.

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• Merlin is looking for logisticians for Nyala and Nimule, both in Sudan, a senior logistician/project officer for Lodwar (Kenya), and for a logistics coordinator for Congo (DRC).
• MSH are looking for logistics assistants in Egypt and Congo (DRC), a district logistics specialist for Uganda, a logistics coordinator for Sudan, a logistics manager for Rwanda, a procurement associate for Côte d’Ivoire, a Senior Technical Advisor, Supply Chain Operations for Malawi, and a warehouse manager for Haiti.
• UNICEF is looking for Regional Chief of Supply based in Dakar (Senegal), and a regional cold chain and logistics specialist based in Nairobi (Kenya). And a mini-rant on this one: why on earth does UNICEF hide their vacancies behind a password-protected, registered-applicants only database (so I cannot link to them) – are these vacancies so sensitive? And why post a vacancy on ReliefWeb that is not included in their own database? For such a big organisation, this is really amateur hour.

[Image: Job opportunities by Coffeechica]

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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).

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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• Like last year, the Zaragoza Logistics Center offers scholarships for some of its students. The latest scholarship offering is specifically targeted at logisticians working in Africa.
• Georgia Tech will host a conference on health and humanitarian logistics this March.
• In this year’s European Conference on Operational Research, there will be a track on OR for Development and Developing Countries.

Big h/t to the humlognews newsletter.

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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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• World Vision is looking for two global supply chain management specialists, and a commodity director – multi-year assistance of health, nutrition and agriculture for Bangladesh.
• UNICEF is looking for a health consultant, cold chain and logistics system strengthening countries support in West Africa.

[Image: Job opportunities by Coffeechica]

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