A Pacific Lens on Building Supply Chain Resilience.

I had an exciting opportunity to facilitate a workshop in Fiji focusing on strengthening the disaster management capacity of partners, organized by World Vision South Asia Pacific Region. It was an enriching week of learning from our dedicated practitioners and colleagues representing eight Pacific Island countries (PICs) including the Solomon Islands, PNG, Vanuatu, Fiji, Samoa, Kiribati, Timor- Leste, Tonga, and Tuvalu. I am happy to synthesise my learnings and reflections on supply chain resilience from the event, incorporating insights from various sources.

The Pacific Island Countries (PICs) are significantly unique and daunting challenges being among the smallest and most remote countries on earth, scattered in the world’s largest ocean. The scary trend of increasing climate-related hazards, such as tropical cyclones, tsunamis, droughts, floods, volcanic eruptions, etc in the past decades, the number of people affected rose to 5.5 million, between 2011 and 2020, from 1.2 million, between 2001 and 2010.

Factors impacting supply chain and logistics in PICs.

High logistics cost of reaching the affected population in outer islands. Approximately 54% of the population lives within 500m of the coastline, making it difficult and expensive to deliver aid to these remote and small Islands. For example, in Tropical Cyclone Ian in Tonga in 2014, 39% of initial relief expenditures from the emergency funds went to fuel, distribution, travel and freights- according to 世界银行 2015. Moreover, the absence of professional third-party logistics (3PL) companies to facilitate downstream logistics increases the risk and complexity of supply chain operations.

PICs also face limited access to the international market. PICs are on average 12,000km from centres of economic activity, putting them at an excessive distance from foreign suppliers, increasing unit costs due to transportation expenses, and making them some of the most remote countries in the world. International trade is vital for economic prosperity in PICs, but their trade performance has been weak over the past decade. Small country size and remoteness from global economic centres may have contributed to this relatively poor performance.

PIC's economies are sensitive to natural disasters. The frequency and scale of these shocks underscore the importance of medium-term economic and fiscal planning to minimize the adverse impact of disasters on economic development. Severe natural disasters not only disrupt current economic activity but can also have a significant impact on long-term growth. For instance, Cyclone Pam led to a 64% GDP drop in Vanuatu, and Cyclone Winston cost 30% of the GDP in Fiji- The World Bank 2015.

Opportunity to invest in local supply chain and logistics capacity.

The increasing complexity of disasters, climate change, and conflicts, coupled with a widening humanitarian funding gap, presents us with a challenging decade ahead. Supply Chain Management (SCM) serves as the backbone of disaster response operations, without the right equipment, supplies, and personnel, effective relief cannot be provided. Notably, supply chains account for a significant portion of response costs. Research by Dr. Jonas Stumpf and colleagues on “Assessing the value of supply chain management in the humanitarian context” reveals that 74% of response costs are directly related to supply chain expenses. However, merely seeking additional funding is not the sole solution to closing the gap. Instead, the humanitarian community can focus on investing earlier and smarter in SCM and logistics preparedness. By doing so, we can reduce overall requirements. For instance, HELP Logistics estimates that investing 1 Euro in the supply chain before a disaster can save 7 Euros or more during emergency responses. Additionally, up to 74% of response time can be saved through effective preparedness (Source: Preparedness Investment Model (PIM))

1 Euro invested in supply chain perior to disaster can save 7 Euro and more on the emergency responses. Up to 74% of response time can be SAVED.

PIC's complex and unique logistical challenges necessitate substantial investments, innovative solutions, and interrelated preparedness efforts from all actors involved to build a resilient supply chain.

The areas of investment to empower local actors in supply chain and logistics preparedness and capacity.

International humanitarian organizations can significantly enhance disaster response capabilities in the Pacific by empowering local actors. This involves a multi-faceted approach centred around increased funding, capacity building, and technological innovation.

Increased Funding for National and Local Partners is crucial to bolstering their capacity to respond to disasters. Based on conversations with Local NGOs, there is a lack of dedicated personnel to handle logistics during emergencies hence there is an opportunity to support hiring specialists rather than investing huge costs in establishing offices in each country.

Strategic Prepositioning of Relief Supplies and Logistics Mapping: Fiji and other countries can serve as strategic hubs for prepositioning core relief supplies to reduce response time. These hubs can serve as distribution centres for the wider Pacific region. There is an opportunity to collaborate with ESUPS/ STOCKHOLM and link with partners in updating stocks to logistics mapping and analysis of prepositioned relief stock, which could help to respond together.

Capacity Building and Simulation Exercises are essential for equipping local partners with the skills and knowledge to manage complex supply chains in crises. Regular simulations can test response plans and identify areas for improvement. A potential collaboration with HELP Logistics could offer pro bono support to humanitarian organizations and opportunities for operational research in logistics and supply chain management.

Investing in Local Market Development: Local suppliers and markets are first responders in crisis hence?strengthening supply chains by supporting local businesses is a crucial step of preparedness. This approach not only boosts the local economy but also ensures a more reliable supply of goods and services during emergencies. For example, wherever appropriate cash-based interventions, allow affected communities to purchase essential items from local markets.

Leveraging AI and Technology in Logistics Assessment: Utilizing technology and tools like geographic information systems (GIS) could map logistics infrastructure and assess capacity in crisis-affected areas. Using drones in disaster response could improve the efficiency of needs assessments and distribution of aid in remote areas. Hence, By utilizing advanced analytics, organizations along with national and local actors can optimize resource allocation, predict potential challenges, and improve decision-making.

Technology-Led Anticipatory Action enables proactive measures based on real-time data and early warning systems. By anticipating disasters, organizations can pre-position supplies, communicate risks, and activate response plans before a crisis hits.

Role of National and Local actors in building supply chain resilience.

The ancient wisdom and survival skills are as old as Islands and mountains, local peoples are masters at utilising those skills in the best ways to protect and continue their lives, how smartly we integrate technology, provide resources with authority, and develop strong partnerships within existing local actors is the key strategy of dealing with the global crisis and building resilience. Even amidst external challenges, let’s not overlook the importance of small, cost-effective, and practical measures for supply chain and logistics preparedness;

Small, affordable and practical actions in SCM & logistics preparedness before the disaster hits make a difference in emergency response.

Supplier Relationship Management: Local actors can build strong relationships with suppliers. This involves understanding supplier capabilities, negotiating terms, and ensuring timely deliveries. Building and maintaining robust ties with local suppliers ensures a reliable supply of goods and services at the time of response.

Collaboration with humanitarian actors: For local partners, there is an opportunity to foster close partnerships with National Disaster Management Offices (NDMOs), Pacific Regional Logistics Cluster in Fiji to align efforts and leverage existing resources. Pacific Humanitarian Team (PHT) is a network of humanitarian organizations, Pacific Islands Association of Non Govenmental Organisation (PIANGO). Pacific Community-SPC , are organizations that work together to assist the Pacific island countries prepare for and responding to disasters.

Joint Procurement: Implement collective sourcing plans to achieve economies of scale, reduce costs, and improve bargaining power and there is an opportunity to negotiate stock management and warehousing with suppliers.

Leveraging Existing Contracts: Utilize piggyback contracts or frameworks to expedite procurement processes and access favourable terms. Opportunity to explore the use of pre-negotiated purchase contracts, and supplier contact established by donor agencies, INGOs, and peer organizations.

By implementing these strategies, partner organizations can significantly enhance the resilience of Pacific Island supply chains and improve disaster response capabilities.

In summary, I would like to highlight the research Defining Logistics Preparedness: A Framework and research agenda by Prof. Marianne Jahre and others ''Paperpreparedness investment should consider the multiple and interrelated processes of the supply chain" This idea gives us enough space to think and plan wisely to build Supply Chain Resilience to ensure effective and efficient Humanitrain Operations.