Copyright is owned by the Author of the thesis. Permission is given for a copy to be downloaded by an individual for the purpose of research and private study only. The thesis may not be reproduced elsewhere without the permission of the Author. “The role of global logistics companies in disaster relief efforts: An investigation into benefits, challenges and critical success factors of cross-sector collaborations” Jan Maether The role of global logistics companies in disaster relief efforts: An investigation into benefits, challenges and critical success factors of cross-sector collaborations A thesis presented in partial fulfilment of the requirements for the degree of Master of Logistics and Supply Chain Management at Massey University, Albany, New Zealand. Jan Maether 2010 Abstract The purpose of this thesis is to explore the benefits and opportunities, as well as the challenges and risks cross-sector collaborations in humanitarian aid and disaster relief generate. The study also points out the major critical success factors that commercial logistics companies and humanitarian aid organisations require in order to build efficient partnerships. Additionally, guiding recommendations that support the development of successful collaborative efforts are presented. The study is based on an extensive literature review discussing the complexities of humanitarian aid logistics and reveals the differences between commercial and disaster relief supply chains. Different types of corporate- humanitarian collaborations and cross-learning potential are highlighted. The literature review also deals with the possibility of establishing partnerships within the framework of corporate social responsibility (CSR). A questionnaire investigates the respondents‟ point of view about the strengths, opportunities, and risks of cross-sector collaborations as well as requirements for successful partnerships. Case studies are also included in this thesis in order to discuss strengths and weaknesses and to pinpoint lessons learned from model partnerships. Research finds that corporate-humanitarian collaborations, when successfully established, provide their partners with mutual benefits such as knowledge transfer, sharing of resources and best practices. Also, the improvement of a company‟s public image and awareness can be achieved. Humanitarian aid organisations profit from the building of capacity in between disasters, including staff training and the provision of readily accessible resources from the partnering company. The findings also demonstrate that such collaborations are expected to show a moderate development in the future but need to be built on clear partnership agreements determining the scope of involvement as well as each partner‟s goals and objectives. Research is solely based on collaborations between commercial logistics companies and humanitarian aid agencies focusing on relief operations after sudden-onset natural disasters (e.g. earthquakes). Further research is needed especially in the field of risk assessment and risk management of collaborations, the influence of such partnerships on employees‟ overall performance, as well as the development of specific key performance indicators (KPIs). This thesis provides logistics companies and humanitarian relief professionals as well as researchers and readers interested in this particular topic, an overview of the current state of development of cross-sector collaborations. Furthermore, the main critical success factors the logistics industry and the humanitarian aid sector believe are necessary to establish successful partnerships are highlighted. Acknowledgements It is a pleasure to express my sincere gratitude to the people who made this thesis possible. I would like to express my sincere gratitude to everyone who supported and inspired me during the several months in which this thesis lasted and provided me with new ideas and novel insights. I especially would like to thank my supervisor Jersey Seipel for his guidance during my final year at Massey University. He rendered excellent assistance, provided useful advice and information, and stimulating suggestions. His consistent energy and enthusiasm motivated and inspired me and his encouragement and interest in my topic assisted me in all stages of writing up my Master Thesis. He was always accessible and willing to help me with my research. I also would like to express my gratitude to Alan Win. I was delighted to interact with him through attending his logistics lectures and having him as a co- supervisor. His longstanding experience in logistics and broad network makes him to an invaluable person to ask for advice. I am grateful for his constructive comments and important support throughout the two years of my masters programme. A special thank-you goes to Dr. Norman E. Marr who offered much advice and insight throughout my studies at Massey University and in particular his support and guidance from the initial to the final level of my thesis. The generous support from Bruce Pohlman is greatly appreciated. The creation of the webpage for my research project would not have been possible without his effort, knowledge, and patience. My sincere thanks also go to the many experts of the humanitarian aid and commercial logistics sector for completing the questionnaire and providing me insights and up to date information. The financial support of Massey University, New Zealand is gratefully acknowledged. I also wish to thank my friends for their help with revising the English and layout of my manuscript. Thank you for your detailed reviews, advice, and constructive criticism, as well as for being such great friends and spending part of your free time for such an “appealing” task. Thank you also for helping me getting through the difficult times, for all your emotional support, entertainment, companionship, and caring. Finally and most importantly, I wish to thank my parents Rolf and Dagmar and my sister Nadja for motivating and supporting me as well as for their perpetual encouragement and tolerance they provided me throughout my life and especially within these two years. Auckland, 29.10.2010 Jan Maether Master Thesis Jan Maether VII Table of Contents Page 1. CHAPTER ONE: INTRODUCTION – BACKGROUND, AIMS, AND OBJECTIVES ------------------------------------------------------------- 1 1.1 Introduction ------------------------------------------------------------------------------1 1.2 Logistics, supply chain management, and cross-sector collaborations----2 1.2.1 Role of logistics in business --------------------------------------------------2 1.2.2 Development of supply chain management (SCM) ---------------------3 1.2.3 Importance of supply chain management (SCM) in humanitarian aid projects ----------------------------------------------------------------------------5 1.2.4 Introduction to cross-sector collaborations --------------------------------7 1.3 Background of this study -------------------------------------------------------------8 1.4 Research aims and objectives ------------------------------------------------------9 1.4.1 Aims --------------------------------------------------------------------------------9 1.4.2 Objectives ----------------------------------------------------------------------- 10 1.4.3 Research questions ----------------------------------------------------------- 10 1.5 Limitation of this study -------------------------------------------------------------- 11 1.6 Research structure ------------------------------------------------------------------- 11 2. CHAPTER TWO: LITERATURE REVIEW ----------------------------- 13 2.1 Introduction ---------------------------------------------------------------------------- 13 2.2 Humanitarianism ---------------------------------------------------------------------- 13 2.2.1 The three guiding principles ------------------------------------------------ 13 2.2.2 Humanitarian space ---------------------------------------------------------- 15 2.3 Disaster relief logistics -------------------------------------------------------------- 17 2.3.1 Fundamentals and challenges --------------------------------------------- 17 2.3.2 Humanitarian relief supply chains versus commercial supply chains ------------------------------------------------------------------------------------- 22 2.3.2.1 Humanitarian relief network -------------------------------------------- 22 Master Thesis Jan Maether VIII 2.3.2.2 Stakeholder management and funding constraints -------------- 25 2.3.2.3 Complexity and transparency of disaster relief operations ----- 27 2.4 Cross-sector collaborations -------------------------------------------------------- 30 2.4.1 Introduction --------------------------------------------------------------------- 30 2.4.2 Types of collaborations ------------------------------------------------------ 32 2.4.3 Benefits -------------------------------------------------------------------------- 35 2.4.3.1 Corporate image and identity ------------------------------------------ 36 2.4.3.2 Mutual benefits ------------------------------------------------------------ 37 2.4.4 Challenges and risks --------------------------------------------------------- 40 2.4.5 Critical success factors for cross-sector collaborations -------------- 47 2.5 Conclusion ----------------------------------------------------------------------------- 51 3. CHAPTER THREE: METHODOLOGY ---------------------------------- 54 3.1 Introduction ---------------------------------------------------------------------------- 54 3.2 Research design ---------------------------------------------------------------------- 54 3.2.1 Deductive versus inductive research approach ------------------------ 55 3.2.2 Quantitative and qualitative methods ------------------------------------- 56 3.3 Method of data collection ----------------------------------------------------------- 57 3.3.1 Questionnaire ------------------------------------------------------------------ 57 3.3.1.1 Advantages and disadvantages -------------------------------------- 58 3.3.1.2 Types of questions ------------------------------------------------------- 59 3.3.1.3 Sample ---------------------------------------------------------------------- 61 3.3.2 Desk research ------------------------------------------------------------------ 63 3.3.2.1 Advantages and disadvantages -------------------------------------- 64 3.3.2.2 Systematic review process --------------------------------------------- 64 3.4 Analysis of primary data ------------------------------------------------------------ 66 3.5 Credibility and reliability ------------------------------------------------------------- 68 3.6 Ethical considerations --------------------------------------------------------------- 69 4. CHAPTER FOUR: FINDINGS AND ANALYSIS ---------------------- 71 4.1 Introduction ---------------------------------------------------------------------------- 71 Master Thesis Jan Maether IX 4.2 Questionnaire results ---------------------------------------------------------------- 71 4.2.1 Participants --------------------------------------------------------------------- 71 4.2.2 Overall perception of cross-sector collaborations --------------------- 73 4.2.3 Organisational characteristics ---------------------------------------------- 77 4.2.4 Characteristics of cross-sector collaborations in disaster relief and humanitarian aid --------------------------------------------------------------- 85 4.2.5 Overview of the main characteristics important to successful corporate-humanitarian collaborations ----------------------------------- 87 4.2.6 Possible key barriers for cross-sector collaborations ----------------- 91 4.2.7 Factors that influence cross-sector collaborations -------------------- 94 4.3 Concluding critical success factors (CSF) for cross-sector collaborations - -------------------------------------------------------------------------------------------- 98 5. CHAPTER FIVE: MODEL PARTNERSHIPS IN HUMANITARIAN AID OPERATIONS ---------------------------------------------------------- 103 5.1 Introduction -------------------------------------------------------------------------- 103 5.2 The collaboration between TNT and the WFP ------------------------------ 103 5.2.1 Company overview: TNT -------------------------------------------------- 103 5.2.2 Organisation overview: The WFP --------------------------------------- 106 5.2.3 The collaboration between TNT and the WFP: A model partnership ----------------------------------------------------------------------------------- 110 5.2.3.1 Deciding on a motive -------------------------------------------------- 111 5.2.3.2 Establishing the collaboration --------------------------------------- 114 5.2.3.3 The four initiatives ------------------------------------------------------ 115 5.2.3.4 Benefits ------------------------------------------------------------------- 119 5.2.3.5 Lessons learned -------------------------------------------------------- 121 5.3 The collaboration between DHL and the UN --------------------------------- 124 5.3.1 Company overview: DHL -------------------------------------------------- 124 5.3.2 Organisation overview: The UN ------------------------------------------ 128 5.3.3 The collaboration between DHL and the UN: A model partnership ----------------------------------------------------------------------------------- 131 5.3.3.1 Motivation for the partnership --------------------------------------- 131 5.3.3.2 DHL Disaster Response Teams ------------------------------------ 132 Master Thesis Jan Maether X 5.3.3.3 The partnership as a corporate social responsibility (CSR) project --------------------------------------------------------------------- 139 5.3.3.4 Partnership goals and benefits -------------------------------------- 140 5.4 Conclusion --------------------------------------------------------------------------- 142 6. CHAPTER SIX: CONCLUSION ----------------------------------------- 145 6.1 Introduction -------------------------------------------------------------------------- 145 6.2 Summary of the thesis ------------------------------------------------------------ 145 6.2.1 Background and motivation for this study ----------------------------- 145 6.2.2 Research objectives and research approach ------------------------- 146 6.2.3 Research findings ----------------------------------------------------------- 146 6.3 Recommendations for practice -------------------------------------------------- 148 6.4 Discussion and further research ------------------------------------------------ 151 REFERENCES ------------------------------------------------------------------------- 154 Master Thesis Jan Maether XI List of Figures Page FIGURE 1.1: THE SUPPLY CHAIN FLOWS DISTINGUISHED BETWEEN HUMANITARIAN -- AID AND COMMERCIAL LOGISTICS OPERATIONS (ADAPTED FROM TOMASINI AND VAN WASSENHOVE, 2009) -----------------------------------6 FIGURE 2.1: HUMANITARIAN SPACE AND HUMANITARIAN PRINCIPLES (ADAPTED FROM TOMASINI & VAN WASSENHOVE, 2009) ------------------------------------ 16 FIGURE 2.2: DISASTER CATEGORIES (ADAPTED FROM BERISTAIN, 1999; VAN WASSENHOVE, 2006; MAON, LINDGREEN & VANHAMME, 2009) ------- 18 FIGURE 2.3: HUMANITARIAN RELIEF CHAIN STRUCTURE (DAVIS & LAMBERT, 2002) 23 FIGURE 2.4: SWOT MATRIX OF CORPORATE-HUMANITARIAN COLLABORATIONS ---- 47 FIGURE 2.5: BEST PRACTICES FOR CORPORATE-HUMANITARIAN COLLABORATIONS (ADAPTED FROM VAN WASSENHOVE, TOMASINI & STAPELTON, 2008) ------------------------------------------------------------------------------------------------- 51 FIGURE 4.1: JOB POSITIONS OF COMMERCIAL LOGISTICS EMPLOYEES AND HUMANITARIAN AID WORKERS ------------------------------------------------ 72 FIGURE4.2: PERCEPTION OF AND INVOLVEMENT IN CROSS-SECTOR COLLABORATIONS OF COMMERCIAL LOGISTICS COMPANIES AND HUMANITARIAN AID ORGANISATIONS ---------------------------------------- 74 FIGURE 4.3: OVERVIEW OF BENEFITS COMMERCIAL LOGISTICS COMPANIES AND HUMANITARIAN AID ORGANISATIONS PROVIDE THEIR PARTNER --------- 75 FIGURE 4.4: FORECASTED DEVELOPMENT OF CORPORATE-HUMANITARIAN COLLABORATIONS IN THE FUTURE ------------------------------------------- 76 FIGURE 4.5: CHARACTERISTICS MOST IMPORTANT TO LEAST IMPORTANT IN CHOOSING A HUMANITARIAN AID ORGANISATION -------------------------- 77 FIGURE 4.6: CHARACTERISTICS MOST IMPORTANT TO LEAST IMPORTANT IN CHOOSING A COMMERCIAL LOGISTICS PROVIDER ------------------------- 78 FIGURE 4.7: REQUIREMENTS THAT RESPONDENTS VIEW COMMERCIAL LOGISTICS PROVIDERS AS NEEDING TO FULFIL ------------------------------------------ 80 FIGURE 4.8: REQUIREMENTS THAT RESPONDENTS VIEW HUMANITARIAN AID ORGANISATIONS AS NEEDING TO FULFIL ------------------------------------ 82 FIGURE 4.9: FACTORS AN “OPTIMAL” PARTNER WOULD REQUIRE ---------------------- 84 FIGURE 4.10: RESPONDENTS‟ LEVEL OF AGREEMENT OR DISAGREEMENT WITH HYPOTHESES RELATED TO CORPORATE-HUMANITARIAN COLLABORATIONS (COMMERCIAL LOGISTICS INDUSTRY) --------------- 85 Master Thesis Jan Maether XII FIGURE 4.11: RESPONDENTS‟ LEVEL OF AGREEMENT OR DISAGREEMENT WITH HYPOTHESES RELATED TO CORPORATE-HUMANITARIAN COLLABORATIONS (HUMANITARIAN AID SECTOR) ------------------------ 86 FIGURE 4.12: RESPONDENTS‟ RATING OF CHARACTERISTICS IMPORTANT TO CORPORATE-HUMANITARIAN COLLABORATIONS (COMMERCIAL LOGISTICS INDUSTRY) ------------------------------------------------------- 88 FIGURE 4.13: RESPONDENTS‟ RATING OF CHARACTERISTICS IMPORTANT TO CORPORATE-HUMANITARIAN COLLABORATIONS (HUMANITARIAN AID SECTOR) ------------------------------------------------------------------------ 90 FIGURE 4.14: RESPONDENTS‟ RATING OF THE STRENGTH OF KEY BARRIERS TO CORPORATE-HUMANITARIAN COLLABORATIONS (COMMERCIAL LOGISTICS INDUSTRY) ------------------------------------------------------- 91 FIGURE 4.15: RESPONDENT‟S RATING OF THE STRENGTH OF KEY BARRIERS TO CORPORATE-HUMANITARIAN COLLABORATIONS (HUMANITARIAN AID SECTOR) ------------------------------------------------------------------------ 93 FIGURE 4.16: RESPONDENTS‟ RATING OF THE LEVEL OF ASSISTANCE OF CHARACTERISTICS FOR CORPORATE-HUMANITARIAN COLLABORATIONS (COMMERCIAL LOGISTICS INDUSTRY) ------------------------------------- 95 FIGURE 4.17: RESPONDENTS‟ RATING OF THE LEVEL OF ASSISTANCE OF CHARACTERISTICS FOR CORPORATE-HUMANITARIAN COLLABORATIONS (HUMANITARIAN AID SECTOR) ----------------------------------------------- 97 FIGURE 4.18: CRITICAL SUCCESS FACTORS FOR CORPORATE-HUMANITARIAN COLLABORATIONS ----------------------------------------------------------- 101 FIGURE 5.1: THE GLOBAL NETWORK OF DHL DISASTER RESPONSE TEAMS (ADAPTED FROM WLG, 2008) --------------------------------------------- 133 FIGURE 5.2: DISASTER RESPONSE TEAMS: ACTIVATION PROCESS (DHL, N.D.) --- 134 FIGURE 5.3: DHL DISASTER RESPONSE TEAM: SCOPE OF ACTIVITIES (DHL, 2010B) ----------------------------------------------------------------------------------------------- 135 Master Thesis Jan Maether XIII List of Tables Page TABLE 2.1: BARRIERS TO KNOWLEDGE TRANSFER (ADAPTED FROM SZULANSKI, 2002; AND VAN WASSENHOVE, TOMASINI & STAPLETON, 2008) 43 TABLE 5.1: TNT COMPANY OVERVIEW: “EXPRESS” AND “MAIL” DIVISION (ADAPTED FROM TNT ANNUAL REPORT 2009) 105 TABLE 5.2: OVERVIEW OF THE WORLD FOOD PROGRAMME‟S PERFORMANCE IN 2008 (ADAPTED FROM WFP, 2009) 106 TABLE 5.3: PROJECT OVERVIEW “PRIVATE SECTOR FUNDRAISING AND AWARENESS” (ADAPTED FROM MOVING THE WORLD OFFICIAL HOMEPAGE, 2010) 116 TABLE 5.4: PROJECT OVERVIEW “ON-HAND SUPPORT” (ADAPTED FROM MOVING THE WORLD OFFICIAL HOMEPAGE, 2010) 117 TABLE 5.5: PROJECT OVERVIEW “KNOWLEDGE TRANSFER” (ADAPTED FROM MOVING THE WORLD OFFICIAL HOMEPAGE, 2010) 118 TABLE 5.6: PARTNERSHIP OVERVIEW OF TNT AND THE WFP 124 TABLE 5.7: DHL “EXPRESS” DIVISION (ADAPTED FROM DHL ANNUAL REPORT 2009) 125 TABLE 5.8: DHL “FREIGHT” AND DHL “GLOBAL FORWARDING” DIVISION (ADAPTED FROM DHL ANNUAL REPORT 2009) 126 TABLE 5.9: DHL “SUPPLY CHAIN” DIVISION (ADAPTED FROM DHL ANNUAL REPORT 2009) 127 TABLE 5.10: DHL “MAIL” DIVISION (ADAPTED FROM DHL ANNUAL REPORT 2009) 127 TABLE 5.11: DHL “MAIL” DIVISION: BUSINESS UNITS AND PRODUCTS (ADAPTED FROM DHL ANNUAL REPORT 2009) 128 TABLE 5.12: THE SIX ORGANS OF THE UNITED NATIONS (ADAPTED FROM UN OFFICIAL HOMEPAGE, 2010) 130 TABLE 5.13: LISTING OF MAJOR DEPLOYMENTS OF THE DRTS (ADAPTED FROM N. BATKIN, PERSONAL COMMUNICATION, MARCH 19, 2010) 138 TABLE 5.14: PARTNERSHIP OVERVIEW OF DHL AND THE UN 142 Master Thesis Jan Maether XIV List of Abbreviations % percent & and € Euro (Currency) AET Airport Emergency Team BCG Boston Consulting Group CEO Chief Executive Officer CEP Courier Express and Parcel Services COMPAS Commodity Movement Processing and Analysis System CRM Cause Related Marketing CSF Critical Success Factor CSR Corporate Social Responsibility DHL Dalsey Hillblom Lynn DO Development Operation DPWN Deutsche Post World Net DRN Disaster Response Network DRT Disaster Response Team e.g. exempli gratia ECOSOC Economic and Social Council EMOP Emergency Operation etc. et cetera EUR Euro (Currency) FAO Food and Agriculture Organisation GARD Get Airports Ready for Disasters HIV Human immune-deficiency virus HRN Humanitarian Response Network HtK Help the Kids i.e. id est ICJ International Court of Justice ICRC International Committee of the Red Cross ICT Information and Communications Technology IDP Internally displaced persons IFAD International Fund for Agricultural Development IFBS International Federation of Blue Shield IFRC International Federation of Red Cross and Red Crescent Societies Master Thesis Jan Maether XV km Kilometre km/h Kilometres per hour kton Kiloton LET Logistics Emergency Team MA Medical Aid MoU Memorandum of Understanding MSF Médecins Sans Frontières n.d. not dated NGO Non-Government Organisation p. page p.a. per annum PASW Predictive Analysis SoftWare PRISM Public Relations in the Service of Mankind PRRO Protracted Relief and Recovery Operation SCM Supply Chain Management SO Special Operation SPSS Statistical Package for the Social Sciences SQL Structured Query Language SWOT Strengths, Weaknesses, Opportunities, Threats TEU Twenty-Foot Equivalent Unit TNT Thomas Nationwide Transport TPG Texas Pacific Group UCF United for the Children‟s Future UCL University College London UN United Nations UN OCHA United Nations Office for the Coordination of Humanitarian Affairs UNDP United Nations Development Program UNHCR United Nations High Commissioner for Refugees UNICEF United Nations International Children‟s Emergency Fund UPS United Parcel Service US United States US$ United States Dollar (Currency) WEF World Economic Forum WFP World Food Programme