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Responsibility

Can big business partner with NGOs?

Peter Dolle |

What do companies delivering bottled soda have in common with NGO’s delivering food to a drought area? Quite a lot, it seems. Whether for commercial or humanitarian reasons, it all boils down to logistics.

To the casual observer, the world would seem to be falling apart. Each year millions die in military conflicts and natural disasters, and millions more from famine and disease. Some 230,000 people died from the Indian Ocean tsunamis in 2004 alone and nearly 10 million were displaced. The destruction was so widespread and the media coverage so graphic and horrifying that companies and institutions with no prior interest in humanitarian relief felt compelled to act. The response to the Indian Ocean tsunami, unfortunately, was slow and disorderly, and frustrating for the United Nations (UN) and leading aid agencies.

Regardless of the desire to help and even the money to help, the logistical part was missing: how to get the goods and services and people where they were most needed? It’s a problem businesses deal with every day, if under less horrifying circumstances. The two groups came together in Hamburg in March at an INSEAD conference on Health and Humanitarian Logistics.

Partnerships require effort. Luk Van Wassenhove, INSEAD Professor of Technology and Operations Management and chairman of the conference, says, “Partnerships are hard but can certainly work provided one understands the objectives and incentives of both sides and puts in the energy and investment to make them work. They are unavoidable given future resource constraints. They became popular as part of the corporate responsibility movement in the last 10 years.”

Delivering assistance

Private logistics companies bring with them expertise and a network of resources tested in the commercial market. When combined with non-governmental organizations (NGOs), governments and universities, the result is improved efficiency of the aid response.

United Parcel Service (UPS) is a large donor to UNICEF, United Way, the World Food Programme and the Red Cross. But recent disasters have encouraged the package carrier to do even more. “UPS has always been a company of trucks, people and resources, and we’ve been a doorstep company in many communities,” Eduardo Martinez, president of the UPS Foundation, told INSEAD Knowledge at the conference. “So there’s been a confluence with being able to use those resources that have always been used in times of disaster with these preeminent relief organisations that are trying to leverage the relationship.”

UPS competitor Deutsche Post/DHL began humanitarian assistance in 2003 following the deadly earthquake in Bam, Iran, in which 26,000 people died. UPS is the world’s largest air courier and is partnering with the UN Office for the Coordination of Humanitarian Affairs (UNOCHA) to prepare airports to handle emergency supplies. It has three disaster response teams at airports in Asia, Latin America and the Middle East. Each team has 80 experts and can deploy within 72 hours.

After the earthquake in Haiti, hundreds of rescue workers travelled unprepared to the disaster region and, in the absence of clean drinking water, food and medicine, soon became victims themselves.

DHL emphasises planning and preparation. It has a logistics partnership with the United Nations Development Program, called GARD (Get Airports Ready for Disaster), which trains airport personnel and local government employees. “We train our people on a regular basis so they’re well-prepared for any situation,” says Susanne Meier, vice president of CSR Strategy at DHL.

Partnerships and supply chain management are now buzzwords in the aid community, with books and higher education degrees in the offing. “Ten years ago, logistics was not something that was on the agenda and on the map of the humanitarian – even being the backbone of the organisation,” says Brigitte Stalder-Olsen, director of logistics at the Red Cross. “Today, it is on the agenda in the senior management team.”

Using technology

The public-private-NGO-church relationship is changing rapidly as humanitarian logistics becomes more sophisticated and high tech. While many private companies donate money and expertise, others sell technical equipment and consulting services. Relief workers are now equipped with the latest satellite telephones, laptops, vehicle trackers, satellite imagery and logistics software.

Shortly after the 2004 tsunami, Oxfam International launched a software initiative with other relief organisations, called the HELIOS Project, to improve supply chain management. According to Louise Bloom, project manager of International Supply & Logistics at Oxfam, “The project was stimulated by the tsunami where there was not much coordination and not much visibility of what stocks or material or food was available across different NGOs.” HELIOS allows NGOs to track donations through the entire supply chain.

Social media is transforming fundraising and the search for loved ones after a natural disaster. Most big companies and NGOs now have a presence on Facebook and Twitter to connect friends, inform about their activities and to link donors. According to Bloom of Oxfam, “We use social media to maintain contact with our supporters and build our campaigns – build our networks - that way.”

Google’s Person Finder also works to bring loved ones together after a natural disaster. The service was launched after the 2010 earthquake in Haiti and is now available as an application on mobile devices.

Advanced training and certification

The integration of services among private companies, NGOs and academics has put new demands on skills training. The global humanitarian community wants everyone to speak from the same page. After the Indian Ocean tsunami, the Humanitarian Logistics Association (HLA), the Humanitarian Training Initiative (HTI) and other NGOs created basic and management level training courses for supply chain aid relief. HTI offers custom training programmes and draws on the experience of seasoned relief workers and university educators. Much of the training is with the World Health Organisation and simulates working conditions in military conflicts and natural disasters.

The Fritz Institute reports that it trained over 1000 students in its basic logistics course in the first five years of operation, with students coming from some 200 organisations including UNICEF, the WFP, International Committee of the Red Cross (ICRC), Oxfam-GB, United Nations High Commissioner for Refugees (UNHCR), Médecins sans Frontières (MSF), and Catholic Relief Services (CRS).

UPS, DHL and other logistics companies have their own training and certification programmes that adhere to international norms.

Toward a better world

So is the planet falling apart? While much of that perception is due to excessive news coverage and the use of social media, statistics show more people are, in fact, dying in natural disasters today than a century ago.

“There are more and more disasters…” says Brigitte Stalder-Olsen, head of logistics at the Red Cross. “But they are smaller scale disasters than before.” Stalder-Olsen cites sprawling urbanisation and overpopulation of high-risk areas for the rising number of deaths stemming from disasters. The Red Cross has nearly 70 teams in Africa now responding to different crises. “When there’s a call for international assistance, it’s not something we say, ‘should we, or should we not,’” replies Stalder-Osen quietly. “We have to, and we do it.”

Rising food costs and climate change are expected to add to tensions in many world regions in the future. Despite this negative trend, the aid community is not giving up. In fact, the number of workers in the humanitarian sector has now grown to nearly 600,000 and is growing 6 percent each year, according to the HLA. Many of them are volunteers from the business world.

DHL workers volunteer their free time to serve in the field while their co-workers support their families at home. Susanne Meier says the package carrier is committed to corporate social responsibility: “We have a global footprint, we are a global company, so we want to do it on a global scale.”

United Parcel Service (UPS) donates US$100 million a year to charitable organisations and uses its global fleet of aircraft, trucks and warehouses to supply emergency aid. “It’s part of our corporate values," Eduard Martinez told Knowledge. "…You have to give back to the community – you have to be engaged in the community.”

Luk Van Wassenhove is Professor of Technology and Operations Management and The Henry Ford Chaired Professor of Manufacturing at INSEAD. He is the programme director of Management in the Humanitarian Sector, part of INSEAD's portfolio of executive education programmes.

The 4th Conference on Health and Humanitarian Logistics, was co-organised by INSEAD, Kühne Logistics University, Georgia Tech and the Humanitarian Logistics Association, and was held on 21-23 March 2012 in Hamburg, Germany.

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