REENGINEERING OF DISASTER INVENTORY MANAGEMENT SYSTEM OF
PHILIPPINE NATIONAL RED CROSS – RIZAL CHAPTER
by
AUBREY M. BUTLIG
PATRICIA MINETTE P. REGALADO
JAYSON T. YODICO
An Undergraduate Research Submitted to the
Department of Industrial Engineering
School of Sciences and Engineering
University of Asia and the Pacific
Pasig City, Philippines
In Partial Fulfillment of the Requirements
For the Degree of
Bachelor of Science in Industrial Engineering
June 2015
This is to certify that this undergraduate research, entitled “REENGINEERING
OF DISASTER INVENTORY MANAGEMENT SYSTEM OF PHILIPPINE
NATIONAL RED CROSS – RIZAL CHAPTER”, and submitted by, AUBREY M.
BUTLIG, PATRICIA MINETTE P. REGALADO, and JAYSON T. YODICO to fulfill
part of the requirements for the degree of Bachelor of Science in Industrial Engineering
was successfully defended and approved on MAY 8, 2015.
MR. JUAN CARLOS QUINTO
Undergraduate Research Adviser
MS. CHIQUI ROSANNA TAN-CALAYAG
Panelist
MS. MA. ISABEL REYES
Panelist
The undergraduate research is hereby officially accepted in partial fulfillment of
the requirements for the degree of Bachelor of Science in Industrial Engineering.
DR. EDWIN OLMOS
Industrial Engineering Department Chair
© Butlig, Regalado, Yodico, 2015. All rights reserved.
ACKNOWLEDGEMENTS
We would like to express our deepest gratitude to our professors – especially to
Mr. Juan Carlos Quinto, our undergraduate research adviser, to Ms. Chiqui Rosanna TanCalayag, who adjusted and patiently worked with us in our schedules and mishaps, and to
Ms. Ma. Isabel Reyes who devoted her time and share her expertise as one of our
panelists. Without your guidance, the completion of our undergraduate research would
not have been possible. Heartfelt thanks as well to Dr. Maria Lourdes U and Ms. Jovel
Nabia for imparting to us your expertise in your respective fields. Your inputs have
greatly helped us in understanding our work.
We wish to thank Philippine Red Cross – Rizal Chapter and its branches for
consistently accommodating us in our data gathering throughout this semester and for
demonstrating to us spirit of serving other people. Also, thank you to Mr. Von Ryan Ong,
former Rizal Chapter Head, for allowing us to work with Red Cross for our research. To
all the staff that we have worked with, a big thank you for the help.
Immeasurable appreciation and deepest gratitude are directed to our parents and
family for continuously supporting us in whatever way you can and for reminding us
always that we can do it – that we can do anything as long as we put our hearts and minds
into it. This work is for you, thank you very much!
Most importantly, to God, our Father, thank You for making all of this happen.
Thank You for the lessons learned and the friends earned. You have served as our
strength and our comfort especially at times of pressure and distress – all of these for
Your greater glory!
iii
© Butlig, Regalado, Yodico, 2015. All rights reserved.
ABSTRACT
Since disaster victims must be catered promptly during disasters, there is a need to
design an efficient and effective disaster inventory management system for Philippine
Red Cross (PNRC) Rizal Chapter.
A Literature Review surveys literature concerning Conventional Inventory
Management and Disaster Inventory Management. Principles from conventional
inventory management and benchmarking on inventory management policies of
humanitarian organizations were used in order to define the elements of an efficient and
effective inventory management system. Mathematical models were also surveyed. The
current inventory management system was documented, and the following were observed
to be absent in Rizal Chapter: established standard policies and guidelines, proper storage
management system, internal audit, and complete and detailed records.
Root causes were identified with regard to the problem of disaster inventory
management in PNRC Rizal Chapter and it was found out that these are the one that
could be controlled by the study: lack of standard policy, lack of standard storage
organization, inappropriate storage environment, lack of regular stocktaking, space for
goods used for other purposes, not encoded information, frequent changing of record and
report format, lack of proper turnover of records, lack of information demanded by forms,
and norms variation. A policy manual was made in order to outline the recommendations
to solve the stated problems.
iv
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TABLE OF CONTENTS
ACKNOWLEDGEMENTS……………………………………………………....... iii
ABSTRACT………………………………………………………………………....
iv
LIST OF TABLES………………………………………………………………….
x
LIST OF FIGURES………………………………………………………………...
xi
CHAPTER I: INTRODUCTION………………………………………………….
1
1.1. Background of the Study …………………………………………………… 1
1.1.1. The Philippine Red Cross – Rizal Chapter……………………………
2
1.1.2. Disaster Management in PNRC Rizal Chapter………………………..
2
1.2. Statement of the Problem……………………………………………………
4
1.3. Research Objectives…………………………………………………………
4
1.4. Significance of the Study……………………………………………………
5
1.4.1. PRC Rizal Chapter Management………………………………….
5
1.4.2. Staff and Volunteers………………………………………………. 5
1.4.3. PRC Rizal Chapter Beneficiaries………………………………….
6
1.5. Scope and Limitations………………………………………………………. 6
CHAPTER II: REVIEW OF RELATED LITERATURE……………………..... 7
2.1. Disaster Management……………………………………………………….. 7
2.2. Disaster Inventory Management: Principles and Concepts………………....
9
2.3. Differences from Conventional Inventory Management…………………...
11
2.4. Benchmarking: Inventory Management in Non-government
organizations………………………………………………………………...
v
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13
2.4.1. Inventory Management in Non-Government
Organizations……………………………………………………….....
13
2.4.1.1. Procedures and Policies……………………………………... 14
2.4.1.2. Stock Control…………………………………….………….. 15
2.4.1.3. Record Keeping……………………………………………... 17
2.4.1.4. Receiving and Issuance……………………………………...
18
2.4.1.5. Stocktaking………………………………………………….. 19
2.4.1.6. Disposal……………………………………………………...
19
2.4.2. Partnerships between NGOs and Companies………………………....
19
2.4.3. Formulation of Disaster Inventory-Related Policies………….………
20
2.5. Systems Engineering Studies………………………………………….…….
24
2.6. Disaster Inventory Optimization Models……………………………….…..
25
2.7. Implementation of Microsoft Dynamics NAV………………………….…..
28
2.8. Disaster Inventory Management System as Applicable to PNRC
Rizal Chapter……………………………………………………………….... 29
2.8.1. Inventory Management System Standard Requirements………….
30
2.8.1.1. Established Standard Policies and Guidelines………………
30
2.8.1.2. Inventory Planning…………………………………………..
30
2.8.1.3. Human Resource…………………………………………….
31
2.8.1.4. Inventory Control……………………………………………
31
2.8.1.5. Internal Audit………………………………………………..
32
2.8.1.6. Record Keeping……………………………………………... 32
vi
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2.8.2. Relation of Literature Review to Disaster Inventory Problem
in PNRC Rizal Chapter……………………………...…………...
33
CHAPTER III: METHODOLOGY……………………………………………….
34
CHAPTER IV: DOCUMENTATION OF THE CURRENT DISASTER
INVENTORY MANAGEMENT SYSTEM……………………….………….. 37
4.1. Goods and Materials………………………………………………………...
37
4.2. Processes…………………………………………………………………….
39
4.2.1. General Processes…………………………………………….……….. 39
4.2.1.1.Preparation………………………………………...……........
39
4.2.1.2. Response…………………………………………………….. 39
4.2.2. Inventory Management Processes…………………………………….. 41
4.2.2.1. Receiving………………………………………………......... 42
4.2.2.2. Stocktaking…………………………………………...……... 43
4.2.2.3. Packing………………………………………………...….....
44
4.2.2.4.Releasing………………………………………………..........
47
4.2.2.5. After Disaster………………………………………………..
49
4.3. Inventory Planning and Allocation………………………………………….
49
4.4. Existing Policies…………………………………………………………….. 50
4.5. Facility Design………………………………………………………………
50
4.6. Information Systems………………………………………………………...
52
4.7. Reports………………………………………………………………………
52
CHAPTER V: ANALYSIS OF THE INVENTORY MANAGEMENT
SYSTEM………………………………………………………………………...
vii
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54
5.1. Standard Inventory Management Functions Missing in PNRC Rizal
Chapter……………………………………………………………………….
54
5.2. Analysis of the Current Inventory Management System……………………
55
5.2.1. Stocktaking Method…………………………………………………...
55
5.2.2. Storage System…………………………………………………….......
56
5.2.3. Record Keeping……………………………………………………….. 58
5.2.4. Forms………………………………………………………………….. 59
5.2.5. Variation of Processes…………………………………………………
60
5.3. Analysis of the Problem…………………………………………………….
60
5.3.1. Cause-and-Effect Analysis……………………………………………
61
5.3.2. Identification of Root Causes…………………………………………
64
5.4. Determining Optimal Stock Replenishment Levels………………………...
67
CHAPTER VI: RECOMMENDATIONS………………………………………… 76
6.1. Inventory Management System Manual…………………………………….
76
6.2. Determining Optimal Stock Replenishment Policies……………………….. 79
6.3. Other Recommendations…………………………………………………….
81
6.3.1. Staff and Volunteer Orientation……………………………………….
81
6.3.2. Visual Guides and Reminders…………………………………………
82
6.3.3. Record Database Back-up……………………………………………..
82
6.4. Costs and Benefit of the Recommendations………………………………...
83
6.5. Implementation Plan………………………………………………………...
85
6.6. Contingency Plan……………………………………………………………
86
6.7. Recommendation for Future Study………………………………………….
89
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6.7.1. Application of Inventory Models……………………………………...
89
6.7.1.1. Target-Based Production Plan………………………………..
90
6.7.1.2. Deterministic Inventory Model………………………………. 91
6.7.1.3. Stochastic Inventory Model…………………………………..
91
6.7.2. Microsoft Dynamics NAV…………………………………………….
97
BIBLIOGRAPHY…………………………………………………………………..
98
APPENDICES………………………………………………………………………
104
Appendix A. Images of Storages of Goods……………………………………… 104
Appendix B. Philippine Red Cross Rizal Chapter Annual Reports……………...
105
Appendix C. Relief Packs Released……………………………………………...
107
Appendix D. EM-DAT Data for Natural Disaster……………………………….
108
Appendix E. Prices……………………………………………………………….
110
Appendix F. Disaster Inventory Management Manual…………………………..
112
ix
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LIST OF TABLES
Table 2.1. Disaster Management Phases and Activities………………………………...
8
Table 4.1. Relief Items in Storage Per Branch of Philippine Red Cross Rizal
Chapter………………………………………………………………………………...
38
Table 4.2. Stocktaking Frequency per Branch……………………………………….....
44
Table 4.3 Stored Relief Packs per Branch………………………………………………. 45
Table 4.4. Relief Pack Contents………………………………………………………....
46
Table 4.5. Description of Storage Area per Branch……………………………………..
51
Table 4.6. Disaster Management Annual Reports from 2007, 2010, 2013…………….
53
Table 5.1. Storage Organization Per Branch of Philippine Red Cross-Rizal
Chapter………………………………………………………………………………...
56
Table 6.1 Root Causes Addressed by the Inventory Management Manual…………….
79
Table 6.2. Initial Expenses………………………………………………………………
83
Table 6.3. Estimated Monthly Expenses………………………………………………..
84
Table 6.4. Implementation Plan…………………………………………………………
85
Table 6.5. Contingency Plan…………………………………………………………….
88
Table 6.6. Sample Table for Target-Based Planning……………………………………
90
x
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LIST OF FIGURES
Figure 4.1. Disaster Relief Response Process Flow Chart……………………………...……
40
Figure 4.2. Inventory System High Level Process………………………………………...…
41
Figure 4.3. Acknowledgement of Donation in Kind Form…………………………………... 42
Figure 4.4. Assembly of Relief Packs for Clothes…………………………………………...
46
Figure 4.5. Assembly of Relief Packs for Goods…………………………………………….
47
Figure 4.6. Releasing Process Flowchart…………………………………………………….. 47
Figure 4.7. Award Distribution Sheet………………………………………………………... 48
Figure 4.8. Post- Disaster Operations Flow Chart…………………………………………… 49
Figure 5.1. Percentage of Rizal Chapter Branches Practicing Stocktaking in a given
Frequency…………………………………………………………………………………..
55
Figure 5.2. Percentages of Type of Storage of Rizal Chapter Branches……………………..
57
Figure 5.3. Percentages of Rizal Chapter Branches Practicing Labelling of
Boxes…………………………………………………………………………….…………
57
Figure 5.4. Percentages of Rizal Chapter Branches Practicing Prioritization by
Expiration……………………………………………………………………………….….
58
Figure 5.5. Acknowledgement of Donation-in-Kind Form………………………………….. 59
Figure 5.6. Ishikawa Diagram of the Disaster Inventory Management System
Problem of Philippine Red Cross-Rizal Chap……………………………………………...
62
Figure 5.7. Fault Tree Diagram of Failure to Obtain Accurate Forecasted
Demand…………………………………………………………………………………….. 68
xi
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Figure 5.8. Relief Packs Released in 2005…………………………………………………...
70
Figure 5.9. Relief Packs Released in 2006…………………………………………………...
70
Figure 5.10. Relief Packs Released in 2007………………………………………………….
71
Figure 5.11. Relief Packs Released in 2010 …………………………………………………
72
Figure 5.12. Relief Packs Released in 2013………………………………………………….
72
Figure 5.13. Relief Packs Released in 2014………………………………………………….
73
Figure 5.14. Relief Packs Released per Year for Each Month……………………………….
74
Figure 6.1. Graph for the Stochastic Single Period Model for Setup Cost…………………... 96
xii
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1
CHAPTER I
INTRODUCTION
1.1.
Background of the Study
Disasters are inevitable events that test the preparedness of local communities,
states, and humanitarian organizations to effectively mitigate the negative effects of the
disaster. The Philippine case tells us of stories of occurrence of disasters such as
earthquakes, fire, volcanic eruptions, and typhoon. A fact known to every Filipino,
several typhoons of varying intensities annually plague the country. The Philippine
experience with regard to the typhoons Ondoy and Yolanda, and the continuous flooding
caused by the Hagupit ng Habagat proves that disasters cause loss of human life, hunger,
diseases, damage to infrastructure, and economic decline.
Conducting humanitarian operations before, during, and after disastrous events
prove to be a tedious task. The complexity and randomness of these events requires the
organization to carefully plan and prepare for the damaging effects, spanning from the
pre-disaster phase up to the aftermath of the disaster. The government and humanitarian
organizations have difficult responsibilities that require decision-making and analyses of
impacts and problems caused by disasters. Also, it must be noted that such pressing need
entices researchers and practitioners to formulate flexible, cost-efficient and effective
disaster mitigation-related solutions.
Another initiative is the existence of government organizations and nongovernment humanitarian organizations, whose primary role is to prepare and educate
people for them to be aware and prepared before the disaster, help people survive during
© Butlig, Regalado, Yodico, 2015. All rights reserved.
2
the disaster, and help people recover after the disaster. One of the humanitarian
organizations in the country is the Philippine Red Cross.
1.1.1. The Philippine Red Cross (PRC) - Rizal Chapter
The Philippine Red Cross (PRC) - Rizal Chapter is composed of nine branches
and one sub-chapter under its jurisdiction. These branches are: Las Piñas sub-chapter,
Makati Branch, Mandaluyong Branch, Muntinlupa Branch, Parañaque Branch, PasigPateros-Taguig Branch, East Rizal Branch, West Rizal Branch, South Rizal Branch, and
San Juan Branch. Each branch has their own facility excluding the East, West, and South
Rizal Branch for there is only one facility for these three branches. The Rizal Chapter
Office is located in Pasig City right behind the Pasig-Pateros-Taguig Branch, while the
other branches’ facilities are located in their own area of jurisdiction.
1.1.2. Disaster Management in Rizal Chapter
Disaster management is one of the most essential functions of any humanitarian
organization. Disaster management is integral to the security of everyone’s daily lives
and should be integrated into daily decisions and not just called during disasters, and its
validity as a government function has never been in question (Bullock, Coppola, &
Haddow, 2008). In this regard, the Philippine Red Cross-Rizal Chapter handles the
disaster management and response for those areas under its jurisdiction among its other
services, namely, social services, safety services, health services, blood services, and red
cross youth.
© Butlig, Regalado, Yodico, 2015. All rights reserved.
3
An essential part of disaster management is the disaster inventory management.
Disaster inventory management involves the inventory of donated goods (food, clothes,
medicine, and blankets), response and rescue equipment, first aid equipment, and medical
supplies. In this regard, the current inventory management system of the disaster
management service of Philippine Red Cross Rizal Chapter cannot be considered
efficient at the present due to the following reasons:

There is no concrete and established procedural guideline for inventory
management operations

Some of the branches does not have regular stocktaking

Also, some records are unavailable

There are occurrences of spoilage and damage goods due to inefficient and
ineffective storage system.
Therefore, there is a need to improve the inventory management of the disaster
management service of Philippine Red Cross Rizal Chapter. It is very important for
inventory management to have the following (Corruption Prevention Department of
Independent Commission Against Corruption [CPD-ICAC], 2003; Thomas, 2005;
Muller, 2011):
1. Established procedural guideline
2. Well-defined staffing level
3. Proper internal audit
4. Stock control
5. Proper and complete record-keeping
6. Efficient receiving and issuance procedure
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4
7. Stocktaking
8. Disposal management
1.2.
Statement of the Problem
The main problem that the research addresses is the ineffectiveness and inefficiency
of the inventory management system of the disaster management service of Philippine Red
Cross-Rizal Chapter. In this sense, the research answers the research question:
In what ways could the disaster response operation management of the Philippine Red
Cross Rizal be efficient, effective, and optimized?
1.3.
Research Objectives
Addressing the above-mentioned research problems, the objectives of the study are
the following. First, the main objective of the study is stated below:

Formulate an effective and efficient inventory management system of the disaster
management service for Philippine Red Cross Rizal Chapter
In line with achieving this objective, it is imperative that the following objectives
must be met upon the accomplishment of this research:

create a policy well-fitted for the needs of Philippine Red Cross Rizal Chapter

re-engineer the inventory management operations and processes so that damage, and
spoilage will be avoided or lessened

propose a good and well-fitted storage system.

propose a well-fitted record keeping management system.
© Butlig, Regalado, Yodico, 2015. All rights reserved.
5
1.4.
Significance of The Study
The hypothesized problem with regard to the Rizal Chapter of PRC should
necessarily lead to devising greater ways on how to improve the current system. In
connection with this, the proposed changes could be viewed as an opportunity to increase
in productivity and worker and volunteer satisfaction. Improving the current system also
coincides with the pressing need to make disaster management operations as effective,
cost-efficient, and flexible as possible. In this regard, it was seen that the research will be
beneficial to the following stakeholders:
1.4.1. PRC Rizal Chapter Management.
Successfully improving the current system should necessarily lead to higher level
of worker satisfaction and productivity. As discussed earlier, the pressing concern with
regard to this matter is the pressing need for disaster management operations to be as
flexible, cost-efficient, and effective as possible. It must be noted that the activities as
well must be efficient. The recommended measures will lessen the cycle time of
performing the activities, and is expected to increase their productivity. Collectively, the
improvements are expected to increase the management’s confidence that as a
humanitarian organization, they are able to deliver quality service as fast as possible.
1.4.2. Staff and Volunteers
As discussed earlier, the nature of the activities require it to be flexible, effective, and
efficient. The recommended changes must lead to improved worker and volunteer
© Butlig, Regalado, Yodico, 2015. All rights reserved.
6
satisfaction, and then, further increased productivity. In short, the research will serve as a
guide on how the staff and volunteer will follow and implement the improved processes.
1.4.3. PRC Rizal Chapter Beneficiaries
Lastly, the study will be beneficial to the beneficiaries of the organization. Improving
the current system aids in the faster delivery of service to the beneficiaries. It is important to
take note that the organization’s existence arise from the initiative to reach out to disaster
victims.
1.5.
Scope and Limitations
The PRC Rizal Chapter, like the other chapters or branches of Philippine Red Cross,
provides all its six major services namely: disaster management services, blood services,
community health and nursing services, Red Cross Youth, safety services, and social
services. The Philippine Red Cross service area that the research focuses on is the disaster
management services because it has the largest share with respect to areas of improvement.
The study focuses on the disaster management services’ inventory management. All
of the branches under the Philippine Red Cross Rizal Chapter are the focus of our study,
including all their operations and facilities. In addition, in terms of type of inventory, the
study focuses on the inventory of relief goods. Lastly, the implementation of the
recommendations is not included on the study.
© Butlig, Regalado, Yodico, 2015. All rights reserved.
7
CHAPTER II
REVIEW OF RELATED LITERATURE
This chapter surveys and reviews the relevant disaster inventory management
studies. First, the nature of disaster inventory management will be examined by
considering its similarities and differences from conventional inventory management.
Then, literature review will proceed as follows:

Benchmarking of inventory management from other humanitarian organizations

Guidelines of other humanitarian organizations as to partnerships with other
companies

Systems engineering studies; that is, reengineering of disaster inventory
management systems

Optimization models on disaster inventory

Microsoft Dynamics NAV, its features and critical success factors
2.1. Disaster Management
Disaster management, otherwise known as emergency management, is the attempt
of man to identify and deal with potential as well as actual large-scale threats (Australian
Government, 2004). Haddow et al. (2008) defines Disaster Management as an academic
discipline and profession that deals with the management of disasters especially its risks
and risk avoidance. He adds that disaster management is important in the security of
everyone’s daily lives and must be integrated to daily decisions and not just during
disasters; the implementation of disaster management involves not only individuals but
also organizations especially the government.
© Butlig, Regalado, Yodico, 2015. All rights reserved.
8
Disaster management has four phases, namely, mitigation or prevention,
preparation, response and recovery. In all these phases, emergency management puts
importance on the communications and authority and assignments such as the incident
command system (Haddow et. al., 2008). Table 2.1. lists down the activities under each
phase.
Phase
Definition
Activities
Mitigation/
Prevention
Focuses on the elimination, if not
the reduction, of the hazards
themselves with the goal to
lessen the susceptibility and
increase the flexibility of the
community subject to the
predicted damage of the
identified hazards.
building codes, building-use
regulations, legislation, publiceducation, public information,
tax incentives/disincentives,
insurance
incentives/disincentives,
zoning/land use management
Preparation
Involves the establishment of
arrangements and plans as well as
the provision of education and
information to the public in order
to prepare them in dealing with
the emergencies.
emergency response plans,
warning systems, evacuation
plans
emergency communications,
mutual aid agreements, public
education, public information,
resource inventories, training
programs, test exercises, refuge
shelters
Response
Aims to put in place effective
measures by concentrating on the
active preparedness arrangements
and plans.
plan implementation,
emergency declarations,
warning messages, public
information, registration and
tracing, inform higher
authorities, activate
coordination centers,
evacuation, mobilize resources,
damage assessment, search and
rescue, provide medical
support, institute public health
measures, provide immediate
relief
Table 2.1. Disaster Management Phases and Activities. Source: (Australian Government,
2004)
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9
Phase
Recovery
Definition
Activities
The recovery phase deals with
the aftermath of the calamity and
assists the community affected by
physical infrastructure
reconstruction, and physical wellbeing restoration.
restore essential services,
counselling programs,
temporary housing, financial
support/assistance, distribute
recovery stores
public information, long-term
medical support, manage public
appeals, restore public assets,
economic impact studies,
review development plans,
initiate reconstruction tasks
Table 2.1, continued. Disaster Management Phases and Activities. Source: (Australian
Government, 2004)
2.2. Disaster Inventory Management: Principles and Concepts
In this section, principles of conventional inventory management are discussed,
seeing these principles as applicable to disaster inventory management. On the other
hand, the differences of disaster inventory management from the conventional one are
also explored. By considering the principles of classical inventory management as
affirmed by experts in the field, one could easily understand the relevance of disaster
inventory management to humanitarian organizations. On the other hand, by enumerating
the differences of disaster inventory management from the classical, the need to widen
the literature regarding disaster inventory management will be justified.
According to Haniefuddin et al. (2013), inventory management mainly refers to
all activities involved in developing and managing the inventory levels of resources. It
determines specific sizes and placement of stocked goods keeping the most economical
amount of one kind of asset. Furthermore, it informs managers the quantity of a good to
© Butlig, Regalado, Yodico, 2015. All rights reserved.
10
reorder, when to reorder, how frequently orders should be placed and what the
appropriate safety stock is so as to minimize stockouts.
Roebuck (2012) that inventory management determines the size and placement of
kept goods. It is oftentimes required at various areas within a facility and also within
multiple locations of a supply network. Inventory management involves a retailer with
the objective of acquiring and maintaining a suitable merchandise collection while
ordering, shipping, handling, and related costs are kept in check inventory requirements,
set targets, provide replenishment techniques and report actual and projected inventory
status. One of its goals is to protect the regular and planned course of production,
therefore ensuring there is always enough supply to meet demand (while keeping as little
stock as possible), given the random disturbances caused by different factors. Roebuck
adds that inventory management involves replenishment lead time, carrying costs of
inventory, asset management, inventory forecasting, inventory valuation, inventory
visibility, future inventory price forecasting, physical inventory, available physical space
for inventory, quality management, replenishment, returns and defective goods, and
demand forecasting. It is necessary to balance the aforementioned competing
requirements for the optimization of inventory levels.
Aside from discussing the principles and definitions of inventory management, it
is also necessary to discuss how inventory management, in general, impacts businesses
and enterprises. Three reasons are enumerated and discussed by Heck (2009) below to
justify the importance of inventory management:
Working Capital. Stocks affect a large part of the total working capital costs as well as
that of the total logistics costs. The reduction of these costs will consequently provide
© Butlig, Regalado, Yodico, 2015. All rights reserved.
11
the company the biggest benefits. Working capital invested in stocks could also have
been a very useful resource when it could have been used on other things. Cost
reductions are significant since it encourages competitive products and services. One
way of reducing working capital costs is by using a more efficient inventory
management.
Risks Associated with Stocks. Stocks entail risks (e.g. stock may catch fire, be stolen,
damaged or expire). Consequently, these events may negatively affect the production
process and may also cause late deliveries. Lower stock levels mean lower related risks.
The prevention and other actions addressing these risks cost the organization as well.
Ease of Identification. Some of the easiest costs to identify and reduce when attacking
supply chain problems are that of the inventory. Costs are oftentimes pressured to
reduce so as to keep up with the competition. ”In accordance working capital costs will
have to be reduced; optimizing internal logistics is a way to do this in a relatively easy
manner”. Enterprise Resource Planning (ERP) is a tool that enables stock reductions
and thus as a consequence able to reduce related costs and risks. Inventory management
aims to control materials and related costs and finance.
Indeed, Inventory management plays a vital role in the management of businesses
and enterprises, so is disaster inventory management to humanitarian organizations.
2.3. Differences from Conventional Inventory Management
As applied to disaster inventory management, on the other hand, principles of
inventory management will point out to the fact that adequate levels of commodities must
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12
be stocked in order to cater the needs of the disaster victims. However, Ozguven (2012)
stated that disaster inventory management literature, as compared to huge enterprise
inventory management is not that wide. He affirms that disaster inventory management is
unique and different from classical and manufacturing inventory due to the following
reasons:
Difference from repetitive manufacturing. Disaster inventories are not like repetitive
manufacturing inventories; it cannot be designed as such being modeled for daily
actions.
Backlogging. Backlogging cannot be allowed during the emergency operations since
delays, at worst, may even cause deaths in evacuation centers.
Uncertainties in demand. A huge amount of uncertainty in demand is faced by disaster
inventories.
Tracking and monitoring of delivery and consumption. Online tracking and monitoring
the delivery and consumption of the supplies is given the utmost importance; however,
this is too difficult to perform.
Technological obsolescence. Technological obsolescence for the stocked equipment (e.g.,
medical apparatus) has a direct effect on the lives of the survivors.
Perishability and expiration dates. When considering disaster inventories, perishability
and expiration dates of commodities require extra attention.
Possibility of scarcity of resources. There can be a possible scarcity of resources used to
produce new products in a disaster’s aftermath.
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13
Other constraints. Monetary, military, local and political constraints are involved in the
delivery and storage of the emergency supplies. Chances are that Infrastructure and
transportation network can be badly degraded to the extent of making impossible the
efficient delivery of vital supplies.
As Ozguyen (2012) suggests, the differences of disaster inventory management
from the conventional inventory management calls the need for better methodologies,
theoretical approaches, and management models that should take into account the abovementioned issues.
2.4. Benchmarking: Inventory Management in Non-Government Organizations
As discussed in the previous section, inventory management for disaster
humanitarian organizations involves a lot of risks, uncertainty of demand, and storage
sensitive inventories. Therefore, it is essential that the inventory management of disaster
humanitarian organization are planned and executed effectively and efficiently. Valuable
insights and guidelines on inventory management can be obtained by looking into other
non-government organizations. As discussed below, these guidelines are taken up in
several aspects; namely, inventory management system, stock control, receiving and
issuance, stocktaking, and disposal.
2.4.1. Inventory Management System in Non-Government Organizations
Non-government organizations have specific guidelines on how they run their
inventory management system, especially several humanitarian, non-government
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14
organizations. In this regard, proper practices for the inventory management of NGOs as
to internal auditing, establishing policies, and authority will be discussed. Evidently, this
is because donations processes and relief operations, as well as medical operations hold a
large percentage of their organization’s function and activity.
2.4.1.1. Procedures and Polices
According to the Corruption Prevention Department of Independent Commission
Against Corruption (2003), there should be an established procedural guideline in
inventory management and a well-defined staffing level for the purpose of authorization
hierarchy when it comes to receiving of goods, issuance of scraps and disposal,
replenishment of depleted items, ethical guidelines, and other matters that may arise to
conflict of interest and acceptance of advantage. Guidelines are generally used for
internal audit which ensures that the inventory management standards are met.
In addition, an internal organizational audit is a complete check of all
administrative systems, excluding reception, and it is the most important tool for
monitoring and evaluating administrative systems, so that all systems will be checked and
seen if they are working and in place (Thomas, 2005). An internal audit is commonly
done by the employees within the company in different departments. Thomas also stated
that in carrying an audit the auditor must follow a certain checklist. After the audit has
been conducted, if the auditor has seen any weakness in the system, he should be able to
explain its causes and the action to be done in order to correct it. With respect to
inventory, there should be a written inventory policy and that policy should be
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15
implemented in internal audits. With the use of inventory, Thomas added that the
following guidelines should be complied:
● authorized by the correct person
● properly supported with a supply request form properly recorded in the inventory
(non-expendable supplies) register or supply control card,
● the inventory is counted regularly and the count is recorded.
As for the standards of the International Red Cross and Red Crescent Movement,
national societies should have a standard guide and instruction for various types of relief,
train voluntary reserve personnel, enlighten public opinion and constitute reserve funds
and easily accessible supplies for relief work (Geneva Convention as cited in
International Committee of Red Cross and International Federation of Red Cross and Red
Crescent Societies, 2008). In addition, the national societies should have established
procedures in order to facilitate disaster management operations, and should adopt legal
policy and institutional frameworks (International Committee of the Red Cross and
International Federation of Red Cross and Red Crescent Societies, 2008). These are the
standards of International Red Cross and Red Crescent Movement with respect to policies
and guidelines.
2.4.1.2. Stock Control
Humanitarian NGOs disaster management operations are mostly comprised of
distribution. Muller (2011) affirms that in distribution having the right item at the right
quantity must be an important concern. He adds that issues relating to this matter are
oftentimes dealt with by simply increasing safety stock on hand. That is why stock
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16
control is very essential for inventory management of humanitarian NGOs. As to this
matter, human resource must be considered important for stock control; people should be
properly allocated and designated. ICAC-CPD (2003) suggests that in order to provide
adequate checks and balances, duties of staff involved in the stock control process should
be appropriately segregated. Where practicable, different officers should be assigned to
handle various stores-related functions including:
● raising purchase requisition
● receipt, inspection and counting of stores items delivered by suppliers, the duties
of which should better be discharged by at least two staff
● storage of received stores and processing transaction, (e.g. issue of stores to users)
● Stocktaking exercises or audit checks.
ICAC-CPD added that it is essential to lay down parameters to facilitate stock control
such as types of items to be subjected to stock control, stock holding levels such as
reorder point and maximum stock level, mode of stock control such as computer-based
stock control system or manual system, but of course computer-based system are
preferred because it allows online access to store information and facilitates maintenance
of data movements.
As for standards of International Red Cross, there should be an effective tracking
system for all commodities that are regulated in their supply chain. Facilities for storage
should be proper and secure in order to preserve the quality of the commodity stored.
Supplies such as food are needed to be protected from sun, rain, humidity, and high
temperatures. Proper maintenance of warehouse should always be observed. According to
the International Federation of Red Cross and Red Crescent Societies, there should be
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proper stock control and regular physical checking of stocks in order to ensure that there
are no variances between the actual stock and the documented stock.
2.4.1.3. Record Keeping
Records are important because it serves as evidence and reference to support the
business. ICAC-CPD (2003) notes that records must be kept updated, and there should be
supporting authorized voucher or job-order for items (receiving), the details in the
records should be complete and includes serial numbers. In manual systems, they suggest
that wrong entries should be crossed-out, not erased and should be signed by an
authorized person. For computer systems, it was recommended that only authorized
persons should be able to change the data, and there should be audit trail reports. The
content of the records is also important since it is the key in tracking the items. Moreover,
they added that as to stores, raw materials and goods for sale, store records should cover
(ICAC-CPD, 2003):

the description and code number of each category of stores, materials or
goods,

quantity and location of the item,

date and quantity of each transaction (including, receipt, issue, return or
transfer of stores, materials and goods),

unit price of goods for sale, stock balance after each transaction, and

Expiry or validity date of the item, if any.
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As for the standards of International Red Cross, there should be a system that provides
and generates necessary information for the purpose of meeting the report requirements.
In addition, all incoming, outgoing, and stock in storage should be properly documented.
Lastly, there should be proper forms, tags, and index cards to be filled for every
movement of stock (International Federation of Red Cross and Red Crescent Societies).
2.4.1.4. Receiving and Issuance
For relief operations there is always the process of receiving donations as well as
the issuance of goods to the affected community. Effective receiving and issuance
improves the accuracy of inventory. In this sense, the following must be followed (ICACCPD, 2003):

the goods must be inspected if it is in line with the specifications

there should be serial numbered vouchers to be prepared, and the accounting
department must have a copy of the records, any damaged or returns must be
documented

the quantity of items should be recorded and signed by an authorized personnel
For the issuance of goods, the vouchers and job orders should be signed by the authorized
person, and the records of goods to be issued are checked against the signed vouchers for
assurance. There should be an acknowledgement of receipt and there should be a copy
provided for the accounting office, First-In-First-Out system, stock balance records
should be updated.
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2.4.1.5. Stocktaking
It is important that records are updated that is why stocktaking is essential. Along
with this, stocktaking should be conducted on a regular basis by officers without direct
control of the stock (e.g. the staff of the administration/accounting departments).
Supervisors should also undertake surprise stock checks from time to time (ICAC-CPD,
2003). In addition ICAC stated that those who are accountable for stocktaking should
conduct stocktaking exercises in a regular time interval.
2.4.1.6. Disposal
Disposal of goods should also be efficient and effective. There should be an
authorized person to sign the list of materials to be disposed, and all the materials that are
subject for disposal should be accounted for (ICAC-CPD, 2003).
2.4.2. Partnership between NGOs and Companies
It is imperative for companies to implement Corporate Social Responsibility
(CSR) to be able to impart a significant humanitarian effect to the society. In this respect,
there exist numerous partnerships between corporate companies and NGOs. Corporate
companies help in several ways such as providing volunteers, monetary donations, and
donations in terms of goods, and others. One strong corporate-NGO partnership is
between GlaxoSmithKline (GSK) and non-government organizations such as
AmeriCares, Direct Relief, InterChurch Medical Assistance, MAP International, and
Project HOPE. GSK provides medical donations to these NGOs since it is a known
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20
pharmaceutical company. GSK partnership with NGOs is very important and this is the
reason why GSK has its own standards in choosing a partner NGO. The standards are as
follows (Stapleton, Tomassini, & Van Wassenhove, 2008):

expertise and capability in healthcare and in working in impoverished
communities,

clear processes in place for tracking and monitoring product donations,

Ability to evaluate the impact of a disaster,

a good knowledge of the area in which they work, and

most importantly, trust
These criteria are strictly followed by GSK in assessing their potential partners. These are
the important qualities that are commonly sought by potential corporate partners in
NGOs’ to ensure accuracy and to establish trust which is important in every partnership.
Therefore, it is important every humanitarian organization must ensure that these
qualities are followed in order to be able to have a good partnership with a good
corporation.
2.4.3. Formulation of Disaster Inventory-Related Policies
The literature discussed regarding this topic concerns on the formulation and
implementation of policies, programs, initiatives, and strategies of selected organizations.
The United Nations High Commissioner for Refugees (UNHCR) have
transformed in the five key areas in order to improve their inventory management. The
five key areas are as follows (Coyne et al., 2008):
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21

using strategies to optimize and simplify their supply chain,

focusing more on their process-oriented goals, and focus less on functionorienting goal; it is a similar approach to “prevention is better than cure”,

making use of tools and data to manage and monitor the process and to identify
and set priorities for improvement,

empowering the people, hire the right people for the job and make opportunities
for them to improve their capacity as it will help bring value to the organization,
and

having collaborative relationship with partners that fuel savings and performance
improvements.
Supply Management Services (SMS) bring forth significant cost savings, increase in the
number of staff, and ensure the commitment of everyone involved. With these five
strategies UNHCR has improve not only its operations but as well as its management.
A handbook was written by Emergency Management and Homeland Security
Division Michigan Department State of Police (2012) with the purpose of assisting local
emergency management programs in the development of a disaster logistics and disaster
donations plan. The guidance handbook contained policies about the following:
Operations and Organization. It includes damage assessment/needs assessment,
emergency communications, health and safety, public information, and staging and
warehousing plans, disaster logistics and donations management system (team,
function, support facilities, structure, etc.).
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Tasks and Execution. It includes roles and responsibilities of involving parties in the
disaster relief system (state, non-governmental organizations, facility-related positions).
Also included in the handbook were attachments/forms/documents some of which are
disaster commodity needs by hazard, disaster intensity scales, planning and operational
considerations in logistics/donations management phases, donations intake and
processing center as well as points of distribution, disaster volunteer registration form,
volunteer registration center layout, and commodity inventory form. In this handbook, the
following remarks should be considered:

With regard to the above-mentioned plans under the operations and organization
are general. It specifies what other sub-plans are needed and not really the plan
itself.

With regard to the roles and responsibilities, this handbook had detailed general
roles as well as positions needed during a disaster. No specific guideline was
written as to what really a particular authority should do in times of catastrophe.
There were however, maps as to the relationship between donations management
facilities, and as to the donations management process also called as integrated
disaster logistics.
There were no details as to how or what factors were considered in writing the policies in
this handbook. However, there were certain general assumptions noted in this handbook.
Otherwise entitled ASEAN Hyogo Framework for Action (HFA) Regional
Capacity Development in Disaster Response and preparedness, a training program was
made by ASEAN Committee on Disaster Management (2008), which is aimed to share
best practices among the ASEAN Member States, and develop a core set of training
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materials on emergency logistics management that provides a suitable starting point for
further national and regional emergency logistics management. This guide emphasizes
the lack of attention on the logistics management of disaster operations enumerating in
detail what they lack (e.g. professional staff, adequate technology, institutional learning,
etc.). Part of the content of this participant guide are the basic international logistics
standards which also include details and policies on emergency procurement, overland
operations and fleet management, storage and warehousing, and registrations and
distribution of humanitarian aid. In this Training program, the following remarks should
be considered:

The policies on emergency procurement dwelled more on the requirements and
the flow of information rather than on the time and amount of purchasing.

On storage and warehousing, the focus was on warehouse security and not on
inventory management – policies included were about the guard system, ancillary
security equipment, key control, etc. A bit on computing the warehouse capacity is
also present in the participants guide.

With regard to registrations and distribution of humanitarian aid, methods as to
how to compute population estimates were discussed (counting mass units and
extrapolation, administrative records, lists compiled by community records,
extrapolation and global positioning system). Distribution issues, models (e.g. to
groups through group leadership, to groups of family heads, rations shops, etc.), and
categories of systems were included as well.
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2.5.
Systems Engineering Studies
There are studies which aimed to re-engineer systems within humanitarian
organizations; in this case, the literature discussed below proposes frameworks of
efficient inventory management systems. Abalos et. al. (2014) recently performed a study
for OG Cares Foundation, a non-government organization in the Philippines that handles
relief operations. The focus of their study is in devising a community based disaster relief
management system (CBDRMS) that included modules on member status, planning,
donor management, inventory, resource allocation, reports generation, and a mobile
application. In doing so, the researchers used Systems Development Life Cycle (SLDC)
as methodology to come up with a system appropriate for the organization. The
CBDRMS was generated to help the foundation manage their operations by organizing
their records therefore promoting communication. It is important to note, however, that
the aforementioned modules were not included in the published study.
Another study was made by Ozguven (2012) to propose a comprehensive
framework of an integrated humanitarian inventory management system. It combines
stochastic humanitarian inventory management approach and other advanced
methodologies, while integrating technologies such as Radio Frequency Identification
Devices for commodity tracking and logistics. The author claims that that the framework
can be used for emergency inventory planning and inventory control, taking into
consideration uncertainties from the real-world, fluctuation, and disaster condition
constraints.
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2.6.
Disaster Inventory Optimization Models
Optimization models prescribe favorable solutions which aid decision-makers in
the quantitative aspects of their decisions. Literatures in this section have addressed the
problem of disaster inventory management with respect to supply chain, inventory
allocation
and
optimization,
facility
location,
inventory
pre-positioning,
and
transshipment. In inventory allocation and optimization, it is notable that mathematical
models are used to determine optimal stock levels taking into consideration constraints
such as budget limits, costs, and storage capacities, and most especially, uncertainty of
demand caused by disasters.
Before the discussion of disaster inventory models, it is necessary to include the
basic Operations Research (OR) inventory models. Hillier and Lieberman (2011)
presented a progression of inventory models, with each model determining an optimal
inventory policy: Deterministic Periodic-Review Model, Stochastic single period model,
Stochastic single period model with Initial Stock Level and Stochastic single period
model with Initial Stock Level and Setup cost. This model is extended to two-period
model with setup-cost and multi-period models with setup cost. However, the author
mentioned that it is very hard to find exact values of the optimal inventory policy of the
stochastic multi-period model with setup cost. On the other hand, the most realistic
models discussed in Taha (2007) are the deterministic multi-period inventory models
with setup cost and the stochastic single-period model with no setup cost.
An optimization model was constructed by van Wyk, Bean, and Yadavalli (2011)
that that is meant to select the appropriate quantities and types of aid supplies while
minimizing the total cost of inventory kept. The model is presented as a multi-product
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26
and stochastic model. It was assumed in the model that there is no excess inventory
during the first usage of the model. Being stochastic in nature, the model introduces a
parameter and concept called demand scenario, i.e., events which pertain to disasters
such as earthquake, epidemic, flood, etc., corresponding to a certain probability value.
This concept follows the principle that every type of disaster correspond to a demand of
products in different mixes and volumes. On the other hand, applied in the member states
within the South African Development Community (SADC), Van Wyk (2010) proposed
two mathematical models: a Disaster Recovery Plan (DRP) model and a stochastic
inventory model. An optimal DRP, composed of optimal combination of sub-plans that
utilize resources of aid supplies, maximizes the total recovery capability under a budget
constraint. A stochastic inventory model selects the appropriate quantities and types of
aid supplies while minimizing the total cost of inventory kept, while considering
uncertainty in demand due to disasters. Ozbay and Ozguven (2006) created an efficient
and quick-response humanitarian inventory management model which determines the
safety stock so that sufficient supply for a disaster operations will be maintained without
disruption and at a minimum cost. The safety stock and disruption are associated with
respective probability values. Beamon and Kotleba (2006) developed a multi-supplier
inventory model that determines optimal order quantities and reorder points for longterm, complex emergencies in humanitarian operations. The study is presented for the
South Sudan relief operations as a continuous inventory review system. It allows two
different lot sizes Q1 and Q2, which represent normal and emergency ordering and
respective reorder points, r1 and r2. Ponnaiyan (2013) presented a progression of models
to minimize the cost of relief operations, considering random demand as a primary effect
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27
of disasters. In doing such, he claims that his model is distinct from current disaster
operations management studies. Starting from a preliminary model and extending it to
more complex models, the research considers factors such as multi-product, multi-period,
multi-location, frequency of orders, minimization of expected cost, perishable products,
and unmet demand.
There are also authors who formulated optimization models with respect to
facility design. Akkihal (2006) formulated a facility location model which examines the
impact of inventory prepositioning on humanitarian operations. The study determines
optimal locations of non-consumable inventories with the objective of minimizing the
average global distance of the nearest warehouse to a forecasted homeless person.
It is evident that inventory planning would be useless if relief supplies are not
successfully delivered to victims; transportation aspect of relief operations is inseparable
from its inventory aspect. Reyes, Man, and Jaska (2013) have involved in their study the
concept of transshipment. The goal of their study was to test if transshipment is a tool
that could improve inventory management in a disaster relief system. To do this, they
have simulated various situations with regard to disaster frequency and inventory policy
and afterwards compared control and cost results. Costs depended on demand, and
probability of the degree of disaster in an area. Furthermore, the simulations involved
situations both with and without transshipment. Results of this study show that
transshipment can indeed improve costs as well as service to disaster victims with regard
to the inventory levels maintained in the warehouses. Although at times transshipment
may be more expensive, this is due to emergency purchases which is seldom but
necessary in a disaster relief system. On the other hand, Sharifyadi, Navangul, and Jahre
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28
(2014) aimed to create a humanitarian inventory disaster response model for both offshore and on-shore operations. Way advanced from the traditional prepositioning of these
items on-shore at warehouses and distribution centers of the humanitarian organizations,
they noted that this study paves the opportunity to preposition disaster relief items on
board their ships (off-shore) as well as at their port terminals (on-shore). They used the
concept of inventory pre-positioning and linear programming to create a model that is
able to minimize the total cost which comprise inventory holding costs on-board the
vessels and at the port terminals, replenishment costs and transport costs. It must be noted
that replenishment costs was defined in their study as including also costs that are not
sometimes classified as replenishment costs, but are paid per replenishment costs. They
wanted to determine how much inventory should be pre-positioned on board, and the
distribution methods to be used.
2.7.
Implementation of Microsoft Dynamics NAV
Philippine Red Cross Rizal Chapter planned to use software that will help manage
their inventory system, Microsoft Dynamics NAV. This section shall review literature
regarding the implementation of Microsoft Dynamics NAV. The literature discuss will
enumerate elements of successful implementation of the software.
Sternad and Bobek (2012) studied on the critical success factors of ERP
implementation among organizations in Slovenia and developed an ERP implementation
framework out of it. Microsoft Dynamics NAV was the ERP software featured in the
study. As to ERP softwares in general, they noted that the Critical Success factors are:
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29

clarity of goals, objectives, scope, and planning,

project team competence, and

support and involvement of the organization and top management
With their analysis on the implementation of Microsoft Dynamics NAV, with the aid of
Microsoft Sure step methodology, it showed that the most important factor was the clarity
of goals, objectives, scope, and planning. On another study, Ruivo, et al., (2013)
measured the perception of firms on the impact of their ERP systems on user
productivity. They used six productivity factors namely system compatibility, system
complexity, transactional efficiency, embedded best practices, online training and
employee empowerment. Results point out to Microsoft Dynamics NAV as the most
favorable software for executives.
2.8.
Disaster Inventory Management System as Applicable to PRC Rizal Chapter
Philippine Red Cross Rizal Chapter has a disaster management service similar
purpose, function, and objective as to other disaster humanitarian organizations. It needs
an effective, efficient, and optimized inventory management system in order to achieve
its objective and fully utilize its resources. As discussed in the previous sections, the
following are the characteristics and standards that Philippine Red Cross Rizal Chapter’s
inventory management must achieve and attain in order to give solution to its needs.
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2.8.1. Inventory Management System Standard Requirements
These are the functions, operations, processes, and materials that are essential for
the inventory management of a disaster humanitarian organization that are applicable to
the current state and setting of Philippine Red Cross Rizal Chapter.
2.8.1.1. Established Standard Policies and Guidelines
Standard policies and guidelines must be established in order to ensure the
organization, effectiveness, and efficiency of the organization. These policies and
guidelines must cover all the operation involved in inventory management for disaster
management service in clear, concrete, and full detail. It is also essential to have a
handbook that contains the following:

International and local laws and standards with respect to disaster management

Staffing levels and task description

Inventory operations/processes procedures guidelines and authorization level

Quality standards

Emergency procurement
2.8.1.2. Inventory Planning
It is important to have an efficient inventory plan in order to avoid wastes, reduce
cost, and fully utilize resources. An effective inventory plan must include the following:

Stock holding levels (re-order point, safety stock, maximum stock level)

Clear human resource delegation
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31

Strategies to optimize operation and resources

Communication network

Damage assessment/ needs assessment

Purchasing and distribution of relief goods

Donor management
2.8.1.3. Human Resource
One of the most important resources of an organization is their people. Staffs and
volunteers welfare should be prioritized and their functions should be clearly defined.
The following are the important matters to focus on with respect to the human resource of
Philippine Red Cross Rizal Chapter:

Clear staffing level

Clear job description and delegation of task

People empowerment

Training and orientations

Clear volunteer delegation

Member status
2.8.14. Inventory Control
Inventory of goods are essential in disaster management because the demands and
supply are uncertain and irregular. In addition, majority of the relief goods are perishable,
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32
therefore expiration dates should be prioritize. The following are the requirements for
inventory control:

Regular stocktaking

Appropriate storage organization

Indication of expiration date
2.8.1.5. Internal Audit
There should be a regular and irregular (unannounced) internal audit in order to
ensure that the organization is properly functioning.
2.8.1.6. Record Keeping
The content of records should be complete and detailed. It should be signed by
authorized personnel in order to prove the validity of the record. It should also be
regularly updated for the purpose of more accurate evaluation. Each concerned
department must have access to the records any time. Records of received, released, and
stored goods must contain the following:

Description of goods

Code number and category of goods

Quantity and location

Transaction date and description

Unit price

Stock balance

Expiration date
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2.8.2. Relation of Literature Review to the Disaster Inventory Problem in PRC Rizal
Chapter
In order to have an efficient and effective inventory management system, the
innovative methods mentioned in the previous section can be applied to Philippine Red
Cross Rizal Chapter. One of the two methods mentioned is establishing a long-term and
good partnership with a private corporation. The other innovative method is to create an
inventory and allocation optimization model in order to optimize the disaster operation by
minimizing resources and maximizing served victims of disasters without delay.
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34
CHAPTER III
METHODOLOGY
The study focuses on the inventory management of the disaster management
service of Philippine Red Cross Rizal Chapter. The main objective of the research is to
create an effective and efficient inventory management. Different principles of industrial
engineering are used in order to come up with an integrated approach to attain the said
objective.
The first method was data gathering of relevant information that was within the
scope and related to the study. This was done through interview, research, and system
documentation. An interview with the Chapter Head of Philippine Red Cross Rizal
Chapter in order to determine the potential areas of improvement of the inventory
management system in a macro perspective. An interview was also done with the head of
Disaster Management Service for the whole Rizal Chapter in order to get a macro view
about the problem with respect to the Disaster Management Services. Lastly several
interviews were done with each head of Disaster Management System per branch in order
to understand and be familiarized with the inventory management system and processes
of each branch under the jurisdiction of Philippine Red Cross Rizal Chapter. Researches
were also conducted in order to determine the requirements and principles of a good
inventory management system. Several articles, books, manuals, reports, and other
sources were studied in order to determine the following:
1.
requirements and principles of conventional inventory management
2.
requirements and principles of humanitarian disaster inventory management
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35
3.
difference between conventional and humanitarian disaster inventory
management
4.
innovative practices and principles applied to disaster inventory management
5.
records of disasters in the Philippines from EMDAT.
As for system documentation, different process of inventory management of
disaster management services were studied and documented such as:
1.
General processes
2.
Storage of goods
3.
relief operation
4.
storage maintenance
5.
report generation
The second method was to analyze the data gathered from interview, research,
and system documentation. The main principle used is the cause and effect analysis in
order to determine the root causes of the problem. The last method was to use an
integrated approach in order to come up with a recommendation that will make the
inventory management system of the disaster management services of the Philippine Red
Cross Rizal Chapter effective and efficient. An inventory optimization model was
planned to be generated but due to the fact that the data gathered were not able to meet
the assumptions and requirements of forecasting methods due to the nature of the values
and that there was still no accurate forecasting method for disaster or climate oriented
problems. Therefore, the generation of an inventory optimization model was not included
in the recommendations. The other recommendation would be to create an inventory
management system manual for the disaster management services of Philippine Red
© Butlig, Regalado, Yodico, 2015. All rights reserved.
36
Cross Rizal Chapter. The principles used to create the manual were cognitive
ergonomics, methods engineering, systems engineering and facilities planning and
design.
© Butlig, Regalado, Yodico, 2015. All rights reserved.
37
CHAPTER IV
DOCUMENTATION OF THE CURRENT DISASTER
INVENTORY MANAGEMENT SYSTEM
In the documentation of the current system involving the relief inventory of Red
Cross Rizal Chapter, Mr. Von Ryan Ong (2014), Rizal’s chapter head was interviewed.
Measurements, copies, and pictures of various inventory aspects were also secured.
4.1.
Goods and Materials
The relief inventories of Red Cross – Rizal Chapter is mainly composed of
donations from various individuals as well as from companies and institutions. Donations
range from canned goods, sacks of rice, noodles, bottled waters to ready to eat food such
as pizzas and donuts. Red Cross typically refuse items that are close to expiry since the
goods are oftentimes not distributed right away. It is the Philippine Red Cross’ policy to
accept goods that will not be expired in less than 6 months. However, there are special
cases where they accept such -- in cases where there are first time donors so as not to
discourage them or in cases where goods are overlooked due to large amount of
donations being received. Those which are fit to be distributed as relief (e.g. canned
goods, rice, bottles of water, toiletries, etc.) will be packed into standard relief packages.
Those that are needed for immediate consumption (e.g. pizzas, donuts, packed meals,
etc.) are given to volunteers. Pasig-Pateros Branch, however, is a special case since the
quarters of the Rizal Chapter establishment is located only at the back of its building.
Confusion and misunderstandings arise as to who is in charge of the goods located in
either of the buildings since the office recipient of the goods can no longer be
© Butlig, Regalado, Yodico, 2015. All rights reserved.
38
distinguished. Evidently this confusion affects the actions-to-be (e.g. monitoring) for the
donated goods.
Relief goods by certain contributors can have stated beneficiaries if the donors
have direct contact with Red Cross officers. Though oftentimes, the contributions are for
those affected by typhoons, there are donors that specify that they would like to give for
the volunteers i.e., “helping the helpers”.
Part of the relief inventory can also come from purchases and/or requests in
excess of demand from the previous typhoon. For the case of Rizal’s Red Cross,
purchases and requests rarely happen since in-kind donations usually supply for the needs
of those affected by disasters.
The relief goods currently in store among the various branches headed by the Red
Cross-Rizal Chapter are canned goods, rice, and other food items as well as hygiene kits.
For some branches however, they also store clothes, blankets, and other items alike. The
relief content of the storage area from the different branches are shown in Table 4.1.
Branch
Pasig-Pateros-Taguig & Rizal
Chapter
Rizal (West, East, South)
Muntinlupa
Relief items in store
Canned Goods, Hygiene kits, Rice, Noodles,
Clothes
Packed Goods, Some Food Items
Canned Goods, Sacks of Rice, Noodles, Hygiene
Kits
Biscuits
Mandaluyong
Canned Goods, Hygiene Kits, Sleeping Mat
Makati
San Juan
Clothes, Blankets, Canned goods, Hygiene Kits
Las Piñas
Canned Goods, Hygiene kits
Paranaque
Canned Goods, Clothes, Hygiene Kits, Rice
Table 4.1. Relief Items in Storage Per Branch of Philippine Red Cross Rizal Chapter
© Butlig, Regalado, Yodico, 2015. All rights reserved.
39
In terms of stored relief goods, the different branches of the Rizal Chapter have
minor differences. The branches mostly contain canned goods and hygiene kits; the
Muntinlupa branch, however, have only biscuits in store which can be explained by their
recent office transfer. Some branches do not have rice, noodles, and clothes in their
storage areas; which are due to the capacity of their branch and also to the donations they
usually receive.
4.2.
Processes
4.2.1. General Process
4.2.1.1. Preparation
In preparation for a disaster, Red Cross Rizal Chapter does the following
activities: mapping, communication with the government and other involved parties,
establishment with the community, inventory checking, equipment monitoring, form
printing, and training of the volunteers and staff. There are no specific schedules for the
abovementioned activities. These tasks, however, if not accomplished by the time there is
information that there is an incoming typhoon, are accomplished right away. There are
designated officers responsible for the aforementioned activities.
4.2.1.2. Response
At the time of the disaster, the diagram below shows the flow of activities done by
the Red Cross – Rizal Chapter. There are some differences, however, in the way some
branches of the Rizal Chapter are performing them. These variances may come from the
assignments of the roles, the number of roles being handled by a single person, and the
© Butlig, Regalado, Yodico, 2015. All rights reserved.
40
sequence of the activities being done. For example, a Red Cross employee may be a
Relief Manager and at the same time be an Inventory Manager. This way the Red Cross
employee does simultaneously the releasing and packing of goods. The number of
employees per branch varies therefore allowing for variances in task assignments. The
response process is shown in Figure 4.1.
Start
End
Staff Meeting
PO looks for
partners and orders
items
TL contacts
purchase officer
Activate Water,
Search and Rescue
Team
Payment and
Receipt of Items
Relief Mgr Contacts
Team Leader about
insufficient items
Funds Records
Distribution of
Goods
Deployment
preparation (loading
of goods, waiver,
etc.)
No
No
Deployment Officer
coordinates with
Logistics Mgr for
transportation
Activate Operation
Center
Are the goods
enough for
distribution?
Activate Regular
Volunteers
Stock Room
Manager release
items upon request
of Relief Manager
Counting Officer
Updates
Relief Mgr of the
Count of Packs
Number of
goods reach
number of
Families in a
community
Meeting/Orientation
of Volunteers (task
assignments)
Move to Storage
Room (packing
room)
Relief Mgr update
OpCen Mgr
OpCen Determines
Receiving
Community
Yes
Relief Packing
Yes
Opcen provides
Deployment officer
of Evacuation Center
Details
No
Receive Donations
Fill-up Receiving
Form
Cash?
Yes
Send to Office for
Official receipt
Funds Records
Figure 4.1. Disaster Relief Response Process Flow Chart
The disaster process of Red Cross Rizal Chapter involves the operation center
(OpCen). They are composed of Red Cross 143 (Red Cross designated person living in
© Butlig, Regalado, Yodico, 2015. All rights reserved.
41
each barangay) which is a group of personnel tasked to update Red Cross about the status
of the barangays under their responsibility. The Red Cross staff also contacts government
organization such as DSWD to confirm the number of people they need to cater.
Also key players on the disaster relief processes of Red Cross are the regular
volunteers. During disaster operations, the regular volunteers are divided to various
committees headed by the employees. The following are the committees generated during
disaster: logistics, relief management, manpower mobilization, deployment, food,
hotmeals, reporting, fund generation (for promotion), receiving/receptionist, and fund
management. On all of these committees there is an over-all head usually the branch
head.
4.2.2. Inventory Management Processes
The major operations with regard to the inventory management of Red Cross – Rizal
Chapter involve receiving, storage, counting, packing, and releasing. Figure 4.2 shows
the general flow of the processes involving the current inventory system of Red CrossRizal Chapter.
Receive
Store
(Monitor)
Pack
Figure 4.2. Inventory System High Level Process Chart
© Butlig, Regalado, Yodico, 2015. All rights reserved.
Release
42
4.2.2.1. Receiving
The receiving process involves filling up of a receiving form (refer to Figure 4.3).
This form contains the name of the donor as well as a description and/or number of goods
delivered. Also, the form generates two copies of a single donation -- one of which is
kept by Red Cross and the other given to the donor. Red cross copies encoded once a
personnel is free of other important tasks. Delivered goods are afterwards transferred and
stored to a temporary area.
Figure 4.3. Acknowledgement of Donation in Kind Form
© Butlig, Regalado, Yodico, 2015. All rights reserved.
43
The acknowledgement/receipt form includes the name of the donor, address,
contact number, email address, the kind of donations, description/remarks, quantity, and
estimated cost. What is usually filled up however is just the name, the
description/remarks of the donation, quantity, and the estimated cost. All of the Red
Cross branches under the Rizal Chapter use the same form in receiving the goods.
Red Cross may receive in kind donations or in cash. Should the donations be in
kind, the goods are stored or transferred to the storage area where the packing operations
are. If it is in cash, it is forwarded to the office for an official receipt.
4.2.2.2. Stocktaking
The stocktaking of inventory differs in the different Red Cross Rizal Chapter
branches. For some, counting only takes place when needed (e.g. when there is an
upcoming storm to be ready for) where checking of expiry dates of the goods are done
simultaneously in this process. Significantly, only big items such as sacks of rice are
really counted and the number of available canned goods, biscuits, and others are
estimated by just looking. The values taken are then used for immediate action (e.g.
ordering/requesting for goods) therefore not needing to take note of the count. Some
branches, on the other hand, have schedules on when to count their inventories.
Oftentimes, they count quarterly but for a few branches, they count whenever there are
new donations and also when donations are released from the storage area (refer to Table
4.2).
© Butlig, Regalado, Yodico, 2015. All rights reserved.
44
Branch
Frequency of Stocktaking
Pasig-Pateros-Taguig & Rizal
Chapter
Rizal (West, East, South)
Makati
Muntinlupa
Mandaluyong
Every Disaster
Every Disaster
Every 2-3 Months
Every Disaster
Every 3 Months
Every release and receipt of relief items, Every 2
San Juan
weeks to 1 month
Las Piñas
Every 3 Months, Month of July
Paranaque
Every release and receipt of relief items
Table 4.2. Stocktaking Frequency per Branch
There are no forms used in the counting of items. For some however, they
monitor their goods via encoding the values in a Microsoft Word file.
4.2.2.3. Packing
The packing of goods (food packs and clothe packs) usually happen in preparation
for an expected typhoon or during the typhoon. For some Red Cross branches under the
Rizal Chapter, a number of 200 packs are stored ready for distribution should there be an
unexpected disaster. When relief packs would be taken due to an emergency, they will
immediately replenish the stored good up to 200 packs therefore ensuring that there will
always be 200 relief packs available in the storage. For most of the Red Cross – Rizal
Chapter branches however, packing ahead of time is not practiced (refer to Table 4.3).
This is to avoid damage or corruption of goods and also to have an easier control over the
expiry of goods.
© Butlig, Regalado, Yodico, 2015. All rights reserved.
45
Branch
Store packs of goods
Pasig (Rizal Chapter)
Yes
Rizal (West, East, South)
Makati
Muntinlupa
Mandaluyong
San Juan
Las Piñas
Paranaque
Table 4.3. Stored Relief Packs per Branch
Yes
No
No
No
Yes
No
No
When packing, Red Cross see to it that all of the packs for a particular community
contain the same goods. In cases where there is an insufficient number of a certain good,
they do not include them in the pack. The relief items are packed in a customized
Philippine Red Cross relief bags which they get from the Philippine Red Cross National
Headquarters. In case of the PRC Rizal chapter, they order 10,000 bags per batch in the
past years and 20,000 bags at the present. They will re-order, when the bags in storage
reached 1000.
The number of packs to prepare for a particular location depends on the feedback
of the team leader under the program Red Cross 143 who is on-site. The decision as to
which community will receive the items however is coordinated by the chapter’s
Operation Center with the other relief organizations. The items that are packed were
clothes, food, and toiletries. The standard content of each relief pack is shown in Table
4.4.
© Butlig, Regalado, Yodico, 2015. All rights reserved.
46
Pack type
Content
Food Pack
(intended to supply a family of 5)
5 canned goods
5 noodles
5kg rice
Additional: 1 gallon(3.78 L)/ 5 500mL
water bottle
Clothe Pack
2 pants for adults
2 upper garment for adults
4 pants for teenagers/kids
4 upper garment for teenagers/ kids
4 upper garment for babies
4 lower garment for babies
Table 4.4. Relief Pack Contents
The packing of the clothes and other items alike involves sorting. In this process,
some of the clothes are deemed unacceptable and therefore rejected and the remaining
items are classified by gender, age, and type. Currently, Red Cross - Rizal Chapter does
not accept clothe items nonetheless their current process involving this is shown in Figure
4.4:
Start
Open Pack of
clothes and stack
Sort: Ladies, Men,
Kids Male, Kids
Female
Pack Pairs of each
Category
Count the number
of Packs and note
End
Figure 4.4. Assembly of Relief Packs for Clothes
Food items also have a particular way of packing. Rice are put inside the pack
first followed by canned goods and afterwards, noodles/biscuits. This is to avoid damage
of goods by taking into consideration the respective weights if the goods being packed as
shown in Figure 4.5.
© Butlig, Regalado, Yodico, 2015. All rights reserved.
47
Start
Unpack Goods
Order to rice,
canned goods,
noodles
Pack according to
specifications
Count the number
of packs and note
End
Figure 4.5. Assembly of Relief Packs for Goods
With regard to the hygiene kits, the packing does not have a particular order.
Critical-to-quality is only the content – the type and number of items in the pack. The
packing of hygiene kits are prepared by health services.
4.2.2.4. Releasing
Releasing of goods involves the counting of packs to be delivered. This count is
then recorded on a log book including details as to where it will be delivered and who is
in-charge as seen in Figure 4.6. The pack contents however are not documented.
Start
Team 1 will be
deployed to the
affected area
Distribute
beneficiary tickets
Team 2 will arrive
with the goods
Check the name on
Yes
the list
Distribute goods and
retrieve ticket
From DSWD list?
No
Fill-out the Award
Distribution sheet
End
Figure 4.6. Releasing Process Flowchart
When the goods are distributed to the victims, their names will have to check if
they are in the DSWD list or they will have to fill-up the Award Distribution Sheet (refer
to Figure 4.7), which will be taken back to the PRC Branch Office for record keeping.
© Butlig, Regalado, Yodico, 2015. All rights reserved.
48
Figure 4.7. Award Distribution Sheet
© Butlig, Regalado, Yodico, 2015. All rights reserved.
49
The Award Distribution Sheet serves a record of the families who received relief
packs. It will be returned to the Rizal Chapter office or the branch office after the
releasing of relief packs.
4.2.2.5. After Disaster
The disaster operations of Red Cross remain active not until the last evacuation
center closes. After the operations are declared done, the following activities are done in
the order shown in Figure 4.8.
Start
Final meeting for
volunteers:
debriefing and
evaluation
General Cleaning
Thank you emails
and text messages
Encoding of Forms
Report Generation
End
Figure 4.8. Post- Disaster Operations Flow Chart
The first three processes happen right after the disaster. The last two processes
however, are done without any particular schedule. The encoding of the details on the
forms are sometimes not done but left on stock in folders.
4.3.
Inventory Planning and Allocation
With regard to the relief inventory of the Rizal Chapter of Red Cross, there are no
designated persons that manage the donated goods. There is however, a relief inventory
head and inventory committee at the time of disaster only. Any Red Cross personnel
and/or volunteer may be tasked to be in charge; Priority, however, is that a regular Red
Cross crew should head the said duty.
© Butlig, Regalado, Yodico, 2015. All rights reserved.
50
There is no planning in the amount of inventory to be stored in the
chapter/branches. There is however a system for the relief allocation. The recipient
community/evacuation center of the goods is determined by the operations center of Red
Cross activated during disaster. The relief manager informs the OpCen of the count of
packs prepared and then the OpCen determines the community that matches the count.
Prioritization as to what community to serve id depended on the damage level/ need level
as reported by the volunteers located on various evacuation centers.
4.4.
Existing Policies
There are no existing documents with regard to policies concerning the inventory
management of the relief goods. There are however executed practices that varies per
branch of the Red Cross-Rizal Chapter. With regard to the standard content of each relief
pack, there is a mention of a document file that determines the contents of the packs vary
with the level of disaster. However, the said file cannot be found by the employees of the
Chapter. The branches under Red Cross-Rizal chapter do not have this file at hand as
well.
4.5.
Facility Design
The sizes of storage areas, the materials used, and the classifications in stacking
the goods differs among branches. Usually, donated goods are stored in a particular area
within the Red Cross Branch that received them. Some branches there are no permanent
areas for storage of the donated goods. In addition, there branches that do not have
storage compartments/cabinets used and classifications as to how to store the goods.
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51
Moreover, other branches fail to separate food items from the hygiene kits. They are,
however, retained in their boxes not allowing spoilage to easily happen. Furthermore,
there are cases also where relief goods are stored in the same place mixed with equipment
used in the rescue operations. Descriptions of the storage areas and classifications
observed per Red Cross branch are detailed by the table below.
Some goods are currently placed at both floors of the branch and some of which
are at the fourth floor of the chapter establishment. The chapter, however, is planning for
a renovation of the said branch which would alter this arrangement. The storage area for
this branch is described in Table 4.5.
Branch
Pasig-Pateros-Taguig
& Rizal Chapter
Storage area
1 floor Pasig Branch
Approximately 25 sq. m
Rizal Chapter Bldg.
Approximately 112.5 sq. m
Inc.  23 sq. m for medicine
*renovation plans
Description of storage area
Medicines are separated, the
rest of the goods are mixed.
Goods are retained in their
respective boxes
Rizal
(West, East, South)
South:
West:
East:
Approximately 50 sq. m for
food items
Approximately 25 sq. m for
hygiene items
Relief Packs
Muntinlupa
Approximately 12 sq. m
*plan for building extension
None at the Moment (only 4
boxes of biscuits in store)
Mandaluyong
Approximately 12 sq. m for
food items
Approximately 6 sq. m for
hygiene items
-1st Floor
Approximately 25 sq. m
2nd Floor
Approximately 50 sq. m
By brand and expiration year.
Stored in boxes with labels
Makati
San Juan
st
Table 4.5. Description of Storage Area per Branch
© Butlig, Regalado, Yodico, 2015. All rights reserved.
Segregated by expiration
month and separated by
compartments
By Expiration Date
Stored in boxes with labels
52
Branch
Storage area
Las Piñas
Approximately 75 sq. m
Paranaque
Approximately 50 sq. m
Description of storage area
By expiration date and stored
in boxes with labels (on boxes
with labels)
By expiration year and
retained in respective boxes
Table 4.5, continued. Description of Storage Area per Branch
Although there are estimates as to the sizes of the storage areas, these areas are,
more often than not, not fully utilized. These areas are filled only at times of disaster
where donations come rushing in. Also, for some branches these areas are used for other
purposes (e.g. trainings and/or other operations. In line with this, the storage areas of
other branches are regularly cleaned while some are not (See Appendix A for pictures of
the storage areas for some branches).
4.6.
Information Systems
The Philippine Red Cross has recently purchased NAV, Microsoft Office so as to
monitor and control their operations more efficiently. There are on-going trainings about
NAV for some of the Red Cross employees; however, the software is not yet properly
instigated among chapters and branches. At the moment, the programs being used in
monitoring or recording the operations of Red Cross – Rizal Chapter are the basic
Microsoft Office Software such as Microsoft Word, Excel, and Power point. In
communicating information, Red Cross uses Google Mail, mobile phone and radios.
4.7.
Reports
The Philippine Red Cross- Rizal Chapter has a record of the evaluation and
inventory reports of the branches under its jurisdiction. These reports include the monthly
© Butlig, Regalado, Yodico, 2015. All rights reserved.
53
and annual financial report, monthly performance evaluation, and monthly relief goods
inventory report. These will be consolidated into Annual and Monthly Report of all the
services of PRC Rizal Chapter. In addition, there are Annual and Monthly Reports
dedicated for the Disaster Management Service only. Based on observation, some of the
monthly and annual reports are not available. In addition, there are reports that are not
properly turned-over when there are changes in staff. Lastly, the formats of the reports
frequently changes as described in Table 4.6 (refer to Appendix B for images).
Year
2007
Report Description




Training (type, date, venue, no. of participants, and instructor)
Drills in paragraph form
Relief Operation (date of disaster, type, no. of families served, no. of
individual served, place, date of relief operations)
All branches and services in one report



Training (branch, place, date, no. of participants)
Drills (branch, date, venue, no. of participants
Relief Operation (branch, date, type, area, no. of families served, no.
2010
of individuals served , remarks), arranged per branch
 Incidents (date, type, area, no. of families affected, no. of individuals
affected)
 Different report for different services
 Training (branch, place, date, no. of participants, instructors,
organizers)
 Drills (branch, date, venue, no. of participants
 Relief Operation (date, type, area, no. of families served, no. of
2013
individuals served , remarks), not arranged per branch
 Incidents (date, type, area, no. of families affected, no. of individuals)
affected, distributed goods, classification of goods)
 Recommendation
 Different report for different services
Table 4.6. Disaster Management Annual Reports from 2007, 2010, 2013
© Butlig, Regalado, Yodico, 2015. All rights reserved.
54
CHAPTER V
ANALYSIS OF THE INVENOTRY
MANAGEMENTSYSTEM
In the previous chapters, the inventory management of different humanitarian
organization and the current inventory management of Philippine Red Cross Rizal
Chapter are discussed. This chapter analyzes the current inventory management system
of Philippine Red Cross Rizal Chapter. In addition, it identifies the root causes of the
problem regarding the ineffectiveness and inefficiency of the inventory management of
the disaster management service of the Philippine Red Cross Rizal Chapter.
5.1.
Standard Inventory Management Functions Missing in PRC Rizal Chapter
The standard characteristics, functions, and operations that are essential in disaster
inventory management that are applicable to Philippine Red Cross Rizal Chapter are
discussed in the review of related literature.
Among the said characteristics and
functions, there are certain areas that are not observed in Philippine Red Cross Rizal
Chapter. The following characteristics and functions are:

Established standard policies and guidelines

Standard policies and guidelines handbook

Stock holding levels

Purchasing, receiving, and releasing plan for relief goods

Donor Management

Regular stocktaking

Appropriate storage organization

Indication of expiration date in storage
© Butlig, Regalado, Yodico, 2015. All rights reserved.
55
Internal audit

Complete and detailed records
5.2.

Analysis of Current Inventory Management System
The current inventory management system of Philippine Red Cross Rizal Chapter
is documented in the previous chapter. In this chapter, the documented inventory system
will be analyzed in order to assess its effectiveness and efficiency.
5.2.1. Stocktaking Method
There is a need for regular stocktaking in order for the records to be kept updated.
It is also a way to keep track of the quality and expiration of goods. The branches under
Rizal Chapter conduct stocktaking in different time interval as seen Figure 5.1:
25%
Every Disaster
37%
Every 2-3 months
Every recipt and release
of Items
38%
Figure 5.1. Percentage of Rizal Chapter Branches Practicing Stocktaking in a given
Frequency
It can be seen that 25% (2 branches) of the branches does stocktaking every time
the release or receive an item. On the other hand, 38% (3 branches) of the branches do it
© Butlig, Regalado, Yodico, 2015. All rights reserved.
56
every 2-3 months, and 37% (3 branches) only do it when there is a disaster. It can be seen
that a big percentage do not practice regular stocktaking.
5.2.2. Storage System
The storage system for each branch of Philippine Red Cross Rizal Chapter differs
from each other. The storage areas are used for different purposes such as meeting area,
relief goods assembly area, and storage for other equipment. Storage some storage areas
are not suitable for storing foods and other goods due to clatters, pests, and some goods
are just scattered on the floor (refer to Appendix A). The storage organization method of
each branches vary as seen in Table 5.1.
Branch
Pasig-Pateros-Taguig Branch
& Rizal Chapter office
Storage Organization
Medicines are separated, the rest of the goods are
mixed. Goods are retained in their respective boxes
Rizal (West, East, South)
Relief Packs
Makati
Segregated by expiration month, first-in-first-outs
system, and separated by compartments
Muntinlupa
None at the Moment (only 4 boxes of biscuits in store)
Mandaluyong
By brand and expiration year. Stored in boxes with
labels
San Juan
By expiration date and stored in boxes with labels
Las Piñas
By expiration date and stored in boxes with labels
Paranaque
By expiration year and retained in respective boxes
Table 5.1. Storage Organization Per Branch of Philippine Red Cross-Rizal Chapter
It can be seen that only one branch (Makati branch) have proper compartments
and expiration arrangement of their goods in stored. As for Pasig-Pateros-Taguig branch,
some goods are mixed with others which may result to damage and spoilage of goods,
since there are goods that are not compatible with each other. The Rizal branch does not
© Butlig, Regalado, Yodico, 2015. All rights reserved.
57
store goods, but they store relief packs. As for Muntinlupa branch, it does not have stored
goods at the moment since they just recently move into a new office.
13%
Boxes
13%
Compartments
Relief Packs
12%
None
62%
Figure 5.2. Percentages of Type of Storage of Rizal Chapter Branches
It can be seen in Figure 5.2 that only one branch (12%) has proper compartments.
There is one branch (13%) that only store relief packs, and one branch (13%) that does
not store goods at the present. While majority of the branch (62%) store their goods in
boxes.
40%
Yes
No
60%
Figure 5.3. Percentages of Rizal Chapter Branches Practicing Labelling of Boxes
© Butlig, Regalado, Yodico, 2015. All rights reserved.
58
A seen in Figure 5.3, out of the 62% (5 branches) which stores their goods in
boxes, 60% (3 branches) of them use labeled box, and 40% (2 branches) do not.
25%
Yes
No
13%
62%
Not Applicable
Figure 5.4. Percentages of Rizal Chapter Branches Practicing Prioritization by Expiration
It can be seen in Figure 5.4 that 62% (5 branches) organize their goods by their
expiration. While 13% (1 branch) do not practice this method, and the rest (25%, 2
branches) cannot adapt this method because it is not applicable to their respective branch.
These shows that 24.8% (40% of 62%) of the branches do not practice proper
labeling which may lead to difficulty of locating goods. 87% of the branches do not
practice the method of storing goods in compartments which may lead to potential
damage of goods. Lastly, not all branches (if applicable) prioritize the expiration of their
goods in storage which may lead to high probability of spoilage.
5.2.3. Record Keeping
Reports are important to assess the performance and status of an organization.
However, in the case of Rizal Chapter, a lot of the information they gather from forms
and evaluation are not immediately encoded, or not encoded at all. In addition, is a lack
© Butlig, Regalado, Yodico, 2015. All rights reserved.
59
of proper turnover of data and reports when the staff of Rizal Chapter changes. Therefore,
the current staff in position does not have access to the previous records handled by the
previous staff. Lastly, the format of the records and reports frequently changes (refer to
Table 4.7 and Appendix B). These changes may cause confusion, inconsistency, and lack
of essential data.
5.2.4. Forms
The Rizal Chapter has two forms used for releasing and accepting relief goods.
These are the Acknowledgement of Donation in Kind form for receiving of donations,
and Award Distribution Sheet for releasing of relief packs.

Donation variation

Facility variation

Norms variation

Size of population and area of jurisdiction variation
Figure 5.5. Acknowledgement of Donation-in-Kind Form
It can be seen in Figure 5.5 that the Acknowledgement of Donation in Kind Form
does not include expiration dates which is essential.
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60
5.2.5. Variation of Process
The goods stored by each branch differ from other branches. Some branches have
stored goods, while other branches store relief packs, and one branch does not have
current stored goods or relief packs. This is caused by the variation of donations that are
received per branch. In addition, different branches of Rizal Chapter have different types
of facilities as well as size of storage (refer to Table 5.1). This leads to different storage
capacities of each branches, as well as different types each branches have. Lastly,
different branches of Rizal Chapter have different ways and processes on how they
execute their operations. However, these norms are not established policies. They
practice this processes because these are the ones that they are used to. This causes nonstandardization of the process of Philippine Red Cross-Rizal Chapter.
5.3.
Analysis of the Problem
The main objective of the research is to give solution to Philippine Red Cross
Rizal Chapter’s problem regarding the effectiveness and efficiency of the inventory
management system of their disaster management service. The following are the stated
underlying sub-problems based on interview and further observation:
1. There is no standard inventory policy as well as stock control system.
2. There is a need for effective and efficient inventory management operations
processes.
3. Inappropriate storage system for goods.
4. There is no standard method for record keeping.
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61
5. 5% of their total inventories of goods are subjected to spoilage and damages
yearly from 2012 to 2014.
6. 20% of the received goods upon donations were rejected every disaster from 2012
to 2014.
Therefore, the main objective of the study to address these problems is to
formulate an effective, efficient, and optimized disaster response inventory management
system.
5.3.1. Cause and Effect Analysis
The cause categories considered in the cause and effect analysis using Ishikawa
diagram are Materials, Management, Environment, and Methods. Ishikawa diagram is a
tool used to identify the probable causes of the problem under 6 categories namely:
environment, machine, man, management, materials, and method (Tague as cited by
American Society for Quality). In this regard the ineffectiveness and inefficiency of the
inventory management system is caused by the following (refer to Figure 5.6):
© Butlig, Regalado, Yodico, 2015. All rights reserved.
62
Materials
Management
No proper monitoring
No regular stocktaking
Donation variation
Overlooked goods
Variation of
Variation of facility
norms
Variation of processes per
branch
No standard policy
No standard
policy
Lack of proper storage
system
Inconsistency of stock per branch
Expiration date
not recorded
Lack of standard storage organization
Inappropriate storage environment
No standard policy
Variation of facility
Difficulty in locating goods
Lack of information
Demanded by forms
Lack of information demanded by forms
No standard policy
Ineffective, Inefficient and
Non-Optimal Inventory
Management
Difficulty in finding records
No standard policy
Lack of information
demanded by forms
No regular stocktaking
No standard policy
No information
recorded
Misplaced records
Lack of standard storage organization
No standard policy
No proper monitoring
Lack of standard storage organization
No proper turnover
of records
Inappropropriate storage environment
Inappropriate storage environment
Lack of availability of information
Space for goods used for other purposes
Environment
Frequent changing of record
and report format
Lack of proper
Storage system
No standard policy
Information
not
encoded
No standard policy
No standard stock control sysrem
Method
Figure 5.6. Ishikawa Diagram of the Disaster Inventory Management System Problem of Philippine Red Cross-Rizal Chapter
© Butlig, Regalado, Yodico, 2015. All rights reserved.
63
The problems with respect to the ineffectiveness, inefficiency, and optimization of
the inventory management system of Philippine Red Cross-Rizal Chapter are:
Overlooked Goods. There are instances when spoiled goods are discovered among the
current inventory in the storage of each branch because they are overlooked. These
goods end up being spoiled due to the fact that they are discovered or being pulled out
beyond their expiration dates. This causes increase in wastes and decrease in potential
goods to be distributed.
Lack of proper monitoring system. There is no proper and standard monitoring system for
goods that are in storage for each branch. The current practice is basically based on the
norms of the branch.
Lack of proper storage system. There is no properly established storage system for the
whole chapter which leads to difficulty on monitoring the goods that are currently in
storage,
Inconsistency of stock per branch. There are variations with respect to the type and
quantity of items that are held in storage per branch.
No standard stock control system. There is no existing system regarding doing stock/or
inventory control in majority of the branches. They often do stocktaking when there are
disasters or emergencies. In addition, there are no permanent assigned personnel to do
the stocktaking.
Lack of availability of information. If there happens to have a request for a certain
information regarding inventory or other matters under the Disaster Management
Service. There are times either information or report is misplaced or not available.
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64
Difficulty in locating goods. There are problems regarding inaccurate inventory or
damages due to the fact that some goods that are in storage are difficult to locate due to
the present storage system.
Space for goods that are used for other purposes. In several branches, the storage area for
goods is often times used as storage area for other equipment, makeshift relief assembly
space, function or meeting area.
Variation of processes per branch. There is no general or standard policy for the
branches under the Rizal Chapter’s jurisdiction due to their differences in processes and
norms of doing things.
Ineffective Storage System. The current storage systems of Philippine Red Cross-Rizal
Chapter’s branches have problems with respect to space, organization, and storage
environment.
5.3.2. Identification of Root Causes
As seen in the previous section, causes related to the ineffectiveness and
inefficiency of the inventory management system were enumerated in detail. In this
section, the identification of root cause will be done with respect to the cause categories:
Environment, Management, Materials, and Methods.
Environment. The causes of ineffectiveness, inefficiency, and optimization of the
inventory management system attributed under the category Environment or Work
Setting are the following: 1) lack of standard storage organization, 2) inappropriate
storage environment, and 3) storage space for goods that are used for other purposes.
© Butlig, Regalado, Yodico, 2015. All rights reserved.
65
Management. The causes of ineffectiveness and inefficiency of the inventory
management system attributed under the category Management are the lack of standard
policy and guidelines, as well as the variation of system processes per branch. The
variation of systems processes is caused by variations in norms and facilities, as well as
the lack of standard policy and guidelines.
Materials. The causes of ineffectiveness and inefficiency of the inventory management
system attributed under the category Materials are: 1) overlooked goods, 2)
inconsistency of stock per branch, and 3) lack of information demanded by forms. The
goods that reached or nearly reaching their expiration are overlooked and still kept in
the storage. This is further caused by lack of proper monitoring due to lack of regular
stocktaking and standard policy. In addition, it is also caused by lack of proper storage
system due to lack of standard storage organization and inappropriate storage
environment. The last reason why goods are overlooked is the lack of recorded
expiration date due to the lack of information demanded by forms. Lastly, the
inconsistency of stock per branch is caused by lack of standard policy, donation
variation, and facility variation.
Method. The causes of ineffectiveness and inefficiency of the inventory management
system attributed under the category Method are: 1) lack of availability information, 2)
lack of standard storage control system, 3) lack of standard policy and guidelines, and
4) lack of proper monitoring. The lack of availability of information is caused by: 1)
difficulty in finding records, 2) frequent changing of record format, and 3) information
are not encoded. The difficulty of finding and locating previous records is caused by
records being misplaced due to lack of standard policy and proper turnover of records.
© Butlig, Regalado, Yodico, 2015. All rights reserved.
66
It is also caused by lack of recorded information due to lack of standard policy and
information demanded by forms. Lastly, the lack of proper monitoring is due to lack of
regular stocktaking, and standard policy, and the lack of proper storage system due to
the lack of standard storage organization and inappropriate storage environment.
Given the cause and effect analysis method, the identified root causes of
ineffectiveness and inefficiency of the inventory management of the Philippine Red
Cross-Rizal Chapter Disaster Management Service are:

Lack of standard policy

Lack of standard storage organization

Inappropriate storage environment

Lack of regular stocktaking

Space for goods used for other purposes

Not encoded information

Frequent changing of record and report format

Lack of proper turnover of records

Lack of information demanded by forms

Donation variation

Facility variation

Norms variation
However, there are root causes that cannot be controlled. Therefore, the study will
focus on giving solution to the following root causes:
© Butlig, Regalado, Yodico, 2015. All rights reserved.
67
Lack of standard policy

Lack of standard storage organization

Inappropriate storage environment

Lack of regular stocktaking

Space for goods used for other purposes

Not encoded information

Frequent changing of record and report format

Lack of proper turnover of records

Lack of information demanded by forms

Norms variation
5.4.

Determining Optimal Stock Replenishment Levels
Based on the identified root causes, Philippine Red Cross Rizal Chapter has no
established standard policy for inventory management. In an inventory management, it is
essential to establish optimal inventory policies (re-order point, safety stock, maximum
and minimum level of stock, etc.).
The first and simple approach determines the demand for a certain period of time
(monthly or quarterly) through forecasting in order to set the target supply to be
produced. On the other hand, the second approach determines the optimal inventory
policies using optimization models.
Based on the procedures and nature of both approaches, it is seen that an accurate
forecast is the basic and most essential requirement for these approaches. In this study,
the data that will be used for the forecasting of the demand are the relief goods for year
© Butlig, Regalado, Yodico, 2015. All rights reserved.
68
2005, 2006, 2007, 2010, and 2013 released by Philippine Red Cross Rizal Chapter
through the number of families and individuals they served, and the total number of
people affected by incidents that occur in the areas under the jurisdiction of the Philippine
Red Cross Rizal Chapter. However, there are encountered problems regarding the data
that resulted in the inability to forecast an accurate data.
Failure to have
accurate forecasted
demand
Incomplete data
Red Cross Reports
are lacking
Lacking data
from EMDAT
Large Error in
Forecasting
Large variation
in data
Improper
Record
Keeping
Figure 5.7. Fault Tree Diagram of Failure to Obtain Accurate Forecasted Demand
© Butlig, Regalado, Yodico, 2015. All rights reserved.
69
Fault Tree Diagram, as seen in Figure 5.7, is used in order to determine the cause
of failure to obtain accurate forecast. It is a logical block diagram that represents
connection of events and systems (Weibull.com). It is found out that the failure to obtain
accurate forecasted is due to large error in forecasting and incomplete data. The sources
of data gathered are the records available from Philippine Red Cross and disaster reports
available from EM-DAT, an international disaster database are not sufficient. The only
available monthly assessment of disasters in Philippine Red Cross are for the years 2010
and 2013 (from Annual Report), and 2005, 2006, and 2007 (from Monthly Report). There
are no data for years 2009, 2008, 2011, and 2012 (see appendix C: Data from Philippine
Red Cross). As for the data from the international disaster database, some of the
information regarding the damages incurred from every disaster are incomplete (refer to
Appendix D). In addition, based on the data gathered, there is a high probability that it
will result to a large forecasting error due to large variations between data.
The data for the quantity relief goods released per month in year 2005 (refer to
Figure 5.8), shows that there are large variations between the data. The months April,
September, and December have very high values, while the months February, March,
May, June, and October have no relief goods released.
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70
2005
400
354
350
300
253
250
200
181
150
158
50
# of families
115
100
68
0
0
0
0
11
0
0
Figure 5.8. Relief Packs Released in 2005
The data for the quantity relief goods released per month in year 2006 (refer to
Figure 5.9), shows that there are large variations between the data. The month of May
have a very high value, while the months September, October, November, December
have no relief goods released.
2006
700
627
600
500
400
300
294
200
100
136
88
131
178
0
23
Figure 5.9. Relief Packs Released in 2006
© Butlig, Regalado, Yodico, 2015. All rights reserved.
33
0
0
0
0
71
The data for the quantity relief goods released per month in year 2007 (refer to
Figure 5.10) shows that there are large variations between the data. The months of April
and July have a very high value, while the months August, September, and December
have no relief goods released.
2007
5000
4500
4000
3500
3000
2500
2000
1500
1000
500
0
4371
3298
# of families
0
86
322
236 266
0
0
144 8
0
Figure 5.10. Relief Packs Released in 2007
The data for the quantity relief goods released per month in year 2010 (refer to
Figure 5.11) shows that there are large variations between the data. The month of
December have a very high value, while the months July and August have no relief goods
released.
© Butlig, Regalado, Yodico, 2015. All rights reserved.
72
2010
400
350
339
300
250
200
150
100
184
# of families
123 128
98 99
50
38
3
0
0
63
0
25
Figure 5.11. Relief Packs Released in 2010
The data for the quantity relief goods released per month in year 2013 (refer to
Figure 5.12) shows that there are large variations between the data. The month of August
have a very high value, while the months February, March, May, and June have no relief
goods released.
2013
20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
18725
# of families
50 0
0
85 0
0
525
164 171 105 277
Figure 5.12. Relief Packs Released in 2013
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73
The data for the quantity relief goods released per month in year 2014 (refer to
Figure 5.13) shows that there are large variations between the data. The month of July
have a very high value, while the months January, May, October, and November have no
relief goods released.
2014
3500
3272
3000
2500
2000
1500
# of families
1000
500
0
0
71 78 124 0
21
224
683
483
0
0
Figure 5.13. Relief Packs Released in 2014
It can also be observed that the values each year when compared by month is not
constant. There months when there are no relief-packs released for particular years. There
are moths such as April and July where there is one or two years that the values are
extremely higher compared to the other values within those months. In addition, the
difference between the values per month greatly vary (refer to Figure 5.14). This shows
that the values are not stable.
© Butlig, Regalado, Yodico, 2015. All rights reserved.
74
1
0
0
December
683
339
354
0
0
25
8
0
158
0
11
63
144
0
0
483
0
38
0
0
253
224
2
0
0
33
11
November
October
September
August
3272
455
0
23
115
21
0
99
266
294
0
0
0
98
236
627
0
124
212
184
178
181
78
0
3
322
131
0
71
0
128
86
88
0
0
200
123
0
136
68
July
June
May
April
March
February
January
0
500
1000
Y 2014
4371
3298
1500
Y 2013
2000
Y 2010
2500
3000
Y 2007
Y 2006
Figure 5.14. Relief Packs Released per Year for Each Month
© Butlig, Regalado, Yodico, 2015. All rights reserved.
3500
4000
Y 2005
4500
5000
75
However, it is natural for relief data to have a very high variation due to the fact
that the occurrence of disaster and its magnitude are uncontrollable. There are several
studies done that develops humanitarian inventory models. Still, these models will not
work if the data are not complete, therefore, the real problem is the fact that the records
and reports from Philippine Red Cross Rizal Chapter and other sources are lacking.
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76
CHAPTER VI
RECOMMENDATIONS
The analysis of the inventory management system of the Disaster Management
Service of the Philippine Red Cross Rizal Chapter pointed out the identified root causes
of the ineffectiveness and inefficiency of the inventory management system. In order to
give solution to these root causes, there should be an integrated improvement solution in
order to improve the effectiveness and efficiency of the inventory management of the
Disaster Management Service of the Philippine Red Cross Rizal Chapter. The integrated
solution will be composed of:

Inventory Management System Manual

Generation of Stock Holding Levels

Other Recommendations
6.1.
Inventory Management System Manual
The purpose of the inventory management system manual is to have a published
and established inventory management policy in order to ensure the organization and
efficiency of the inventory management system. The principles used and followed in
creating the inventory management system manual are:

Cognitive Ergonomics. The concept of cognitive ergonomics is to make it easier
for the reader/user to perceive, process, and retain the information easily. The
manner that the information in the manual is arranged, the font and font size used,
and the use of graphical information are partially based on cognitive ergonomics.
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77
In addition, the concept of cognitive ergonomics is applied in creating the policies
for inventory management control.

Methods Engineering. There is the principle of proper drafting of reports and
forms in methods engineering in order to lessen the cycle time filling up the
forms, and to eliminate inessential information fields. The manner of drafting the
inventory management system manual, as well as the forms attached to it is
partially based on methods engineering, as well as some of the policies and
guidelines.

Warehouse Operations Facilities Planning and Design. The principles are used to
create an ideal storage and relief facilities layout and policies in order to make the
storage and relief system efficient.

Benchmarking. The principles and standards of the International Federation of
Red Cross and Red Crescent Societies, as well as other non-government
organizations that have humanitarian disaster management system are used as
guidelines for drafting the policies and guidelines for the inventory management
of the Disaster Management Services of Philippine Red Cross Rizal Chapter.
The inventory management system manual entitled “Philippine Red Cross Rizal
Chapter Disaster Management Services Inventory Management Manual” (See Appendix
F, Philippine Red Cross Rizal Chapter Disaster Management Services Inventory
Management Manual) includes the following features:
© Butlig, Regalado, Yodico, 2015. All rights reserved.
78

Task and responsibilities of the Philippine Red Cross Staff

Guidelines and processes of inventory management:

-
Segregation of Donated Goods
-
Storage of Goods
-
Storage Cleaning and Maintenance
-
Physical Counting and Monitoring of Inventory
-
Disposal of Damaged and Expired Goods
-
Receipt of Donations
-
Releasing of Goods from Storage
-
Packing of Relief Goods
-
Releasing of Relief Packs
-
Generation of Reports
Documentation of the Disaster Relief Inventory Management Operations
Process

Format of Forms and Reports
The Philippine Red Cross Rizal Chapter office must have one (1) copy of the
Philippine Red Cross Rizal Chapter Disaster Management Services Inventory
Management Manual, as well as the office of Disaster Management Service for each
branch. The manual must be available at all times and must be administered by the
Disaster Management Services Head per each branch.
The Philippine Red Cross Rizal Chapter Disaster Management Service Inventory
Management Manual addresses the following root causes as stated in Table 6.1:
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79
Root Cause Addressed
Inventory Management Manual Part
Lack of standard policy
PRC Rizal Chapter Disaster Management
Services Inventory Management Manual
Lack of standard storage organization
III.A Segregation of Goods
III.B Method of Storage of Goods
Inappropriate storage environment
III.C Storage Cleaning and Maintenance
Lack of regular stocktaking
III.D Physical Counting and Monitoring of
Inventory
Space for goods used for other purposes
Appendix A. Storage Layout
Not encoded information
III.J Generation of Reports
Frequent changing of record and report
format
III.J Generation of Reports
Lack of proper turnover of records
III.J Generation of Reports Section 5
Lack of information demanded by forms
III.J Generation of Reports
Norms variation
PRC Rizal Chapter Disaster Management
Services Inventory Management Manual
Table 6.1. Root Causes Addressed by the Inventory Management Manual
6.2. Determining Optimal Stock Replenishment Policies
Establishing optimal stock replenishment policies (e.g. re-order point, safety
stock, maximum and minimum level of stock, etc.) is essential to have an efficient stock
control system. There are two methods to determine the stock holding levels: 1) setting a
periodic demand through forecasting, and 2) optimization model.
The first approach computes the required amount of relief goods based on the
forecasted demand. The approach does not guarantee optimality, but given that the
forecast is accurate, it could determine for the management the number of relief goods to
© Butlig, Regalado, Yodico, 2015. All rights reserved.
80
be prepared for a certain period. The objective of the first approach is to provide the
target supply based on the forecasted demand.
The foundation of both methods is accurate forecasted demand. Unfortunately,
there are problems with data such as incomplete data and high variation of values. With
these, it is impossible to achieve an accurate forecast of demand. Therefore, both methods
would be infeasible.
It is recommended that there are complete records of the following in order for the
mathematical model to determine the stock holding levels feasible by having an accurate
forecast of demand:

Complete records of disaster/incidents within the jurisdiction of Red Cross (total
number affected with respect to area and disaster) per year, month and disaster

Complete records of quantity of donated goods with respect to type of goods per
year and month

Complete records of damaged and spoiled goods per year and month

Complete record of goods in storage per year and month

Complete records of relief packs made, released and currently in storage per year
and month

Costs associated with inventory (e.g., warehouse rental, estimated cost of a relief
bag, cost of transporting relief goods from one place to another, etc.)
In order to ensure that the said records will be available, policies and guidelines
regarding proper record and report generation of inventory management system is
incorporated in the Philippine Red Cross Rizal Chapter Disaster Management Services
© Butlig, Regalado, Yodico, 2015. All rights reserved.
81
Inventory Management Manual. These policies and guidelines are indicated in Part III. J
Generation of Reports.
6.3 Other Recommendations
6.3.1. Staff and Volunteer Orientation
In order to ensure that the staff and volunteers will be accustomed to the policies
and guidelines stated in the Philippine Red Cross Rizal Chapter Disaster Management
Service Inventory Management Manual, they should be oriented about the stated policies
and guidelines. These ensure that the staff does the right things at the right circumstances
which will lead to the effectiveness and efficiency of the inventory management system.
6.3.2. Visual Guides and Reminders
In order for the volunteers and staff to remember the policies, processes, and
guidelines easily and to lessen the error committed by the volunteers and staff, there
should be visual reminders that are easy to perceive, understand, and remember. These
visual guides and reminders can be in the form of infographic/simple posters. They
should be posted near the entryway (approximately 18 x 24“) and in a very visible spot in
order for them to be prepared before doing the task. The following are the recommended
visual guides and reminders:

Storage System Control visual guide (placed in storage area)

Relief Operation Control visual guide (placed in relief operation area)

Record Keeping visual guide (placed in the record keeping area)
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82

General Inventory Management Guideline (placed in the general area of the
Disaster Management Office)
6.3.3. Record Database Back-up
Philippine Red Cross Rizal Chapter will be using the Microsoft NAV as the main
software of the whole chapter. This includes an inventory management function that
would be useful for their inventory management system. However, since Microsoft NAV
will be used by Rizal Chapter for the first time, there is a need for transition and trials
before the use of Microsoft NAV in Rizal Chapter will be 100% effective. Therefore,
during the transition method, the Rizal Chapter should also use a temporary back-up
software such as Microsoft Excel and Google Docs for record keeping to ensure that their
records are complete and reliable. However, they should still follow the policies and
guidelines stated in Philippine Red Cross Disaster Management Services Inventory
Management Manual III.J Generation of Reports. In addition all the details and
information needed indicated in the forms (refer to Philippine Red Cross Disaster
Management Services Inventory Management Manual Appendices B and C).
These are the recommendations in order to improve the effectiveness and
efficiency of the inventory management system of the Disaster Management Services of
Philippine Red Cross Rizal Chapter
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83
6.4.Cost and Benefit of the Recommendations
The recommendations stated in order to improve the effectiveness and efficiency
of the inventory management system of the Disaster Management Services of Philippine
Red Cross Rizal Chapter are the following:

0% to small percentage quantity of spoiled and damaged goods

0% to small percentage quantity of goods rejected upon receiving

100% availability of complete, clear, and reliable records

Ease in monitoring the movement of goods

Ease in locating goods and reports in storage

Reduce time spent in locating goods and reports in storage

Ensure that the data is complete 100% of the time

Increase the probability that all the victims affected will be given relief goods.
The recommended integrated solution in order to improve the effectiveness and
efficiency of the inventory management of the Disaster Management Service Philippine
Red Cross Rizal Chapter will entail the following cost stated in Table 6.2:
per page
No. of
office
10
Price per unit
(in Pesos)
1.38
Total Price
(in Pesos)
691.67
1
per document
10
30.00
300.00
Poster Printing (18
x24")
4
per poster
10
100.00
4,000.00
Sticker Paper (8.7 x
11.69")
3
per 25 sheets
10
81.33
2,440.00
Item
Qty
Unit
Bond Paper Black
and White Printing
(8.5 x 11")
Ring Bind
50
Table 6.2. Initial Expenses
© Butlig, Regalado, Yodico, 2015. All rights reserved.
84
Item
Qty
No. of
office
Unit
Warehouse
Compartment
(2.5mx2.4mx2.7m)
(optional)
2
Per
compartment
9
Orientation Cost
(Php.100meal/person, Php.5printouts)
1
Orientation
10
for
approximately
75 staff and
volunteers
Price per unit
(in Pesos)
Total Price
(in Pesos)
5,999.67
107,994.06
7,875.00
78,750.00
OVERALL TOTAL PRICE
Table 6.2, continued. Initial Expenses
194,175.73
The initial expenses cover the printing of the Philippine Red Cross Disaster
Management Service Inventory Management Manual, the printing of visual guides and
reminders, and the labels for the goods and compartments. The total initial expenses are
PHP 19,417.57
per branch, and PHP 194,175.73 for the whole Philippine Red Cross
Rizal Chapter.
Item
Quantity
Unit
Bond Paper Black and
White Printing (8.5 x
11")
102.25
per page
3
per 25
sheet
Sticker Paper (8.7 x
11.69")
No. of
office
10
Price per unit
(in pesos)
1.38
Total Price
(in pesos)
1,411.05
10
212.72
6,381.6
OVERALL TORAL PRICE
Table 6.3. Estimated Monthly Expenses
7,792.65
The estimated monthly expenses (refer to Table 6.3) cover the printing of the
forms indicated in Appendices B and C of the Philippine Red Cross Disaster
Management Service Inventory Management Manual (6 per forms in Appendix B, 3
© Butlig, Regalado, Yodico, 2015. All rights reserved.
85
monthly forms and 0.25 annual forms (3 annual forms divided into 12 months) in
Appendix C) and the sticker papers use for the label of goods. The total estimated
monthly expenses are PHP 779.26 per branch and PHP 7,792.65 for the whole Philippine
Red Cross Rizal Chapter.
These are the benefits and cost of the recommendation to improve the
effectiveness and efficiency of the inventory management system of the Disaster
Management Services of Philippine Red Cross Rizal Chapter.
6.5.
Implementation Plan
In order to ensure that the recommendations will be implemented effectively in
order for the Philippine Red Cross Rizal Chapter to easily adjust to the changes entailed
by the recommendations, an implementation plan must be followed (refer to Table 6.4).
Action
Person In charge
Duration
Start
End
Initial study of the
inventory management
system manual
PRC Rizal Chapter
Head and DMS
Branch Head
1 week
June 4,
2015
June 11,
2015
Printing of the inventory
management system
manual
PRC Rizal Chapter
Head and DMS
Branch Head
2 weeks
June 12,
2015
June 19,
2015
Modification of Rizal
Chapter’s inventory
management system and
facilities
Staff and volunteers
supervised by DMS
Branch Head
1 month
June 22,
and 2 weeks 2015
Table 6.4. Implementation Plan
© Butlig, Regalado, Yodico, 2015. All rights reserved.
July 3,
2015
86
Action
Monthly internal audit per
branch (representative of each
branch is assigned to check a
branch in which they do not
belong)
Person In
charge
1 volunteer/staff
and DMS
Branch Head
Duration
1 week per
month
Start
End
Friday
Monday
of 4th
of 4th
week of
week of
the
the month
month
Table 6.4, continued. Implementation Plan
6.6.
Contingency Plan
Implementation of a modified system will not be 100% successful, therefore there
is a need for a contingency plan (refer to Table 6.5) in order to determine the actions to
be taken in the event of a failure or an error.
© Butlig, Regalado, Yodico, 2015. All rights reserved.
87
Strategy 1
Activity
Modified policy
and guidelines
orientation
Practice of new
policy , guidelines
and modifications
Internal Audit
Strategy 2
Practice of new
policy , guidelines
and modifications
Preventive Measures
Responsible
Possible
Agencies
Problem
Rizal Chapter
The
Head, DMS Branch modifications
Head
will be negatively
received by the
staff and
volunteers
Rizal Chapter
Incompliance to
Head, DMS Head, policies and
staff and volunteers guidelines
Rizal Chapter
Delay or inability
Head, DMS Head, to conduct
Branch
internal audit
Representative
Corrective Measures
Rizal Chapter
Incompliance to
Head, DMS Head, policies and
staff and volunteers guidelines
Action to be taken
Start of Action
Give emphasis on the benefits
of the modification to the
different stakeholders of
inventory management
During the
orientation to
avoid or lessen
the negative
views on
modification
From the start of
implementation






© Butlig, Regalado, Yodico, 2015. All rights reserved.
Strict supervision on the
implementation and
practice of the policies,
guidelines, and
modification
Regular internal audit
Assign a back-up
representative in case of
emergency
Inform the Rizal Chapter
Head
about the policy or rules
that are not complied to
as well as the reason of
incompliance
DMS Head and Rizal
Chapter Head must plan
a counteraction for the
cause of incompliance
The branch must be
given a warning about
the incompliance and it
should also be recorded
Duration of
Action
Entire
orientation
Always
Assignment of
representative per
branch
Always
From the moment
the incompliance
is reported
Until the
problem is
solved
88
Internal Audit
Rizal Chapter
Head, DMS Head,
Branch
Representative
Delay or inability
to conduct
internal audit


Implementation of Rizal Chapter
modifications
Head, DMS Head
Strategy 3
Application of
inventory
optimization
model if the
records are
complete
Budget is not
enough for
modifications
Perfective Measure
Rizal Chapter
Head, DMS Head
Table 6.5. Contingency Plan
© Butlig, Regalado, Yodico, 2015. All rights reserved.



Inform the DMS Head
and Rizal Chapter Head
about the delay and its
cause
Ask for a substitute
representative from
within the branch or
from other branch as
long as the auditor does
not belong to the audited
branch.
Prioritize what is more
useful to the branch
Ask financial aid from
Rizal Chapter or
National Headquarters
From the moment
of the report of
delay or inability
to conduct
internal audit
Until the
internal audit is
successfully
conducted
Immediately after
assessment of the
financial
capability
Until the
modifications
or some of it
are
implemented.
Ensure that the records
are complete and
reliable, follow
Philippine Red Cross
Rizal Chapter Disaster
Management Services
Inventory Management
Manual Part III.J
Once the records
satisfy the
requirement of the
inventory
optimization
model
Until the model
will give a
satisfactory
result
89
6.7.
Recommendations for Future Study
The stated recommendations make the inventory management system of the
Disaster Management Services of Philippine Red Cross Rizal Chapter efficient and
effective. However, there is always a possibility for continuous improvements.
6.7.1. Application of Inventory Models
Despite the unavailability of data to be used for forecasting the demand of relief
items, the following models are considered necessary for inventory and production
planning. Once the needed data for these strategies are already documented, an analyst
could use the following strategies and mathematical models in determining the inventory
levels and production quantities within each period in the planning horizon. Presented
below are options of tools to be used for inventory planning:
6.7.1.1. Target-Based Production Plan
In principle, the aim of this strategy is to prepare the number of relief packs
needed based on the forecasted demand, making it a strategy purely based on forecasting.
For instance, when it is forecasted that 200 relief packs are needed, the branch shall
prepare such quantity. Evidently, the actual demand may be greater than the forecasted
quantity; the relief packs may run out anytime in the middle of the period. In this case, it
is necessary to “chase” the unsatisfied demand by requesting or producing the number of
relief packs needed. When there are excess relief packs at the end of the period, these
must be carried over to the next period. Table 6.6 illustrates this strategy:
© Butlig, Regalado, Yodico, 2015. All rights reserved.
90
Month
Forecasted
Number of
Relief Bags
Needed
Forecasted number of relief
items needed
Canned
goods
Noodles
Rice
Actual
Number of
Relief Bags
demanded
Number of
relief bags
carried over
to the next
month
(excess)
January
February
March
April
May
June
July
August
September
October
November
December
Table 6.6. Sample Table for Target-Based Planning
6.7.1.2. Deterministic Inventory Model
It is necessary to consider the cost of holding excess inventory and the fixed cost
associated with purchasing. This type of inventory model is discussed by Taha (2007). In
this model, let
𝑧𝑖 = 𝑎𝑚𝑜𝑢𝑛𝑡 𝑜𝑟𝑑𝑒𝑟𝑒𝑑 (𝑜𝑟 𝑝𝑟𝑜𝑑𝑢𝑐𝑒𝑑)
𝐷𝑖 = 𝑑𝑒𝑚𝑎𝑛𝑑 𝑓𝑜𝑟 𝑝𝑒𝑟𝑖𝑜𝑑 𝑖
𝑥𝑖 = 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑎𝑡 𝑡ℎ𝑒 𝑠𝑡𝑎𝑟𝑡 𝑜𝑓 𝑝𝑒𝑟𝑖𝑜𝑑 𝑖
𝐶𝑖 (𝑧𝑖 ) = 𝑎𝑠𝑠𝑜𝑐𝑖𝑎𝑡𝑒𝑑 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑖𝑛𝑔 𝑐𝑜𝑠𝑡 𝑓𝑜𝑟 𝑒𝑎𝑐ℎ 𝑝𝑒𝑟𝑖𝑜𝑑
ℎ𝑖 = ℎ𝑜𝑙𝑑𝑖𝑛𝑔 𝑐𝑜𝑠𝑡 𝑝𝑒𝑟 𝑝𝑒𝑟𝑖𝑜𝑑
𝐾 = 𝑜𝑟𝑑𝑒𝑟𝑖𝑛𝑔 𝑐𝑜𝑠𝑡
The model, which assumes that demand is deterministic and is always satisfied, has the
balance equation
𝐵𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 + 𝑎𝑚𝑜𝑢𝑛𝑡 𝑝𝑟𝑜𝑑𝑢𝑐𝑒𝑑 − 𝐷𝑒𝑚𝑎𝑛𝑑 = 𝐸𝑛𝑑𝑖𝑛𝑔 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦
𝑥𝑖 + 𝑧𝑖 − 𝐷𝑖 = 𝑥𝑖+1
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91
Not allowing shortage, the model is based on minimizing the holding and production
costs for all 𝑛 periods. In this mathematical model, the following assumptions are
considered:

All items needed in the preparation of relief bags are purchased by the
organization.

Demand is deterministic (which means the model could only be successful
through accurate forecasts)

Demand is always satisfied; that is, shortage of relief goods is not allowed.

The model may consider the beginning inventory at the start of the planning
horizon.

No excess inventory left at the end of the planning horizon.
The model is expressed as a dynamic programming model with the recursion equation
𝑓1 (𝑥2 ) =
min
𝑧1 =𝐷1 + 𝑥2 −𝑥1
𝑓𝑖 (𝑥𝑖+1 ) =
min
{𝐶1 (𝑧1 ) + ℎ1 𝑥3 }
0 ≤ 𝑧1 ≤𝐷𝑖 + 𝑥𝑖+1
{𝐶𝑖 (𝑧𝑖 ) + ℎ𝑖 𝑥𝑖 + 𝑓𝑖−1 (𝑥𝑖+1 + 𝐷𝑖 − 𝑧𝑖 )} , 𝑖 = 1,2,3, … , 𝑛
An inventory level at any period is enough to satisfy the total demand of the remaining
periods in the planning horizon (Taha, 2007).
6.7.1.3. Stochastic Inventory Model
The deterministic model above is more realistic if demand is treated as
probabilistic. In order to derive a stochastic multi-period model, it is necessary to
formulate a stochastic single-period model. This model, in order to reflect reality must
take into consideration an ordering cost (a fixed cost) 𝐾. The derivation of the model is
patterned from Hillier and Lieberman and Taha (2007). Unlike these authors who both
© Butlig, Regalado, Yodico, 2015. All rights reserved.
92
introduced a progression of models until it reaches to a stochastic single-period model
with setup cost, the discussion will immediately proceed to the derivation of such model
based on the principles these authors provided.
Variables:
𝐷 = 𝑑𝑒𝑚𝑎𝑛𝑑
𝛿 = 𝑟𝑎𝑛𝑑𝑜𝑚 𝑣𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝑓𝑜𝑟 𝑑𝑒𝑚𝑎𝑛𝑑
𝑧 = 𝑠𝑡𝑜𝑐𝑘 𝑙𝑒𝑣𝑒𝑙 𝑎𝑓𝑡𝑒𝑟 𝑟𝑒𝑝𝑙𝑒𝑛𝑖𝑠ℎ𝑚𝑒𝑛𝑡
𝑥 = 𝑖𝑛𝑖𝑡𝑖𝑎𝑙 𝑠𝑡𝑜𝑐𝑘 𝑢𝑝𝑜𝑛 𝑒𝑛𝑡𝑟𝑦 𝑖𝑛 𝑡ℎ𝑒 𝑝𝑒𝑟𝑖𝑜𝑑
ℎ = ℎ𝑜𝑙𝑑𝑖𝑛𝑔 𝑐𝑜𝑠𝑡 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡 𝑜𝑓 𝑒𝑥𝑐𝑒𝑠𝑠 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦
𝑟 = 𝑠ℎ𝑜𝑟𝑡𝑎𝑔𝑒 𝑐𝑜𝑠𝑡 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡 𝑜𝑓 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑠ℎ𝑜𝑟𝑡
𝑐 = 𝑢𝑛𝑖𝑡 𝑐𝑜𝑠𝑡 𝑜𝑓 𝑝𝑟𝑜𝑑𝑢𝑐𝑖𝑛𝑔 𝑜𝑟 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑖𝑛𝑔 𝑒𝑎𝑐ℎ 𝑢𝑛𝑖𝑡
𝐾 = 𝑠𝑒𝑡𝑢𝑝/𝑜𝑟𝑑𝑒𝑟𝑖𝑛𝑔 𝑐𝑜𝑠𝑡
This model depends heavily on the probability distribution of demand. In the
statistical sense, an optimal stock level is to be determined to balance the risk of (1)
incurring shortage cost due to demand exceeding the stock level and (2) incurring holding
costs by carrying too much excess inventory (Hillier and Lieberman, 2011). Hence the
holding and shortage cost function is therefore defined as
𝑓(𝐷, 𝑧) = {
ℎ(𝑧 − 𝐷),
𝑟(𝐷 − 𝑧),
𝑧 > 𝐷
𝑧 ≤ 𝐷.
The model much reflects reality if an initial stock level is included in the model. In this
model the decision variable is in 𝑧, the level of inventory after replenishment through
ordering or purchasing. Hence this follows the balance equation
𝐴𝑚𝑜𝑢𝑛𝑡 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 = 𝑖𝑛𝑖𝑡𝑖𝑎𝑙 𝑠𝑡𝑜𝑐𝑘 + 𝑎𝑚𝑜𝑢𝑛𝑡 𝑜𝑟𝑑𝑒𝑟𝑒𝑑
𝑧 = 𝑥 + (𝑧 − 𝑥)
This follows that the cost incurred if the demand is 𝐷, 𝑧 is the inventory in stock after
replenishment, setup cost, and holding or shortage cost is
© Butlig, Regalado, Yodico, 2015. All rights reserved.
93
𝑇𝐶(𝐷, 𝑧) = 𝐾 + 𝑐(𝑧 − 𝑥) + ℎ max{0, 𝑧 − 𝐷} + 𝑟 max{0, 𝐷 − 𝑧}.
Since the demand is seen as a random variable with the discrete probability
distribution 𝑃𝐷 (𝑑), the cost will automatically be a random variable. The expected cost
𝑇𝐶(𝑧) is expressed as
𝑇𝐶(𝑧) = 𝐸[𝑇𝐶(𝐷, 𝑧)]
=𝐾
∞
+ ∑[𝑐(𝑧 − 𝑥) + ℎ max{0, 𝑧 − 𝑑} + 𝑟 max{0, 𝑑 − 𝑧}] 𝑃𝐷 (𝑑)
𝑑=0
= 𝐾 + 𝑐(𝑧 − 𝑥)
𝑧
∞
+ ∑ ℎ (𝑧 − 𝑑) 𝑃𝐷 (𝑑) + ∑ 𝑟 (𝑑 − 𝑧) 𝑃𝐷 (𝑑)
𝑑=0
𝑑=𝑧
According to Hillier and Lieberman (2011), a representation of the discrete probability
distribution function is hard to find, most especially when the demand ranges over a large
number of probable values. Therefore it is necessary to approximate the discrete
probability distribution function by a continuous probability distribution function. In the
derivation of the optimal policy, a continuous probability distribution function is
therefore assumed. For the continuous random variable 𝐷, let
𝜑𝐷 (𝛿) = 𝑝𝑟𝑜𝑏𝑎𝑙𝑖𝑡𝑦 𝑑𝑒𝑛𝑠𝑖𝑡𝑦 𝑓𝑢𝑛𝑐𝑡𝑖𝑜𝑛 𝑜𝑓 𝐷 and
𝛷𝐷 (𝑎) = 𝑐𝑢𝑚𝑢𝑙𝑎𝑡𝑖𝑣𝑒 𝑑𝑖𝑠𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 𝑓𝑢𝑛𝑐𝑡𝑖𝑜𝑛 𝑜𝑓 𝐷,
Which means that
𝑎
𝛷𝐷 (𝑎) = ∫ 𝜑𝐷 (𝛿) 𝑑𝛿 .
0
Also, the holding and shortage costs must be denoted as
𝐿(𝛿, 𝑧) = {
ℎ(𝑧 − 𝛿),
𝑟(𝛿 − 𝑧),
𝑧 > 𝛿
𝑧≤ 𝛿
© Butlig, Regalado, Yodico, 2015. All rights reserved.
94
Given this, the discrete-probability expected cost shown above could be therefore
expressed as
𝑇𝐶(𝑧) = 𝐸[𝑇𝐶(𝐷, 𝑧)]
∞
= 𝐾 + ∫ [𝑐(𝑧 − 𝑥) + ℎ max{0, 𝑧 − 𝛿} + 𝑟 max{0, 𝛿 − 𝑧}] 𝜑𝐷 (𝛿) 𝑑𝛿
0
𝑧
∞
= 𝐾 + 𝑐𝑧 + ∫ ℎ(𝑧 − 𝛿) 𝜑𝐷 (𝛿) 𝑑𝛿 + ∫ 𝑟(𝛿 − 𝑧) 𝜑𝐷 (𝛿) 𝑑𝛿
0
𝑧
To extend the analysis, it is necessary to denote 𝑇𝐶(𝑧) as
𝑇𝐶 (𝑧) = 𝐾 + 𝐿(𝑧)
𝐿(𝑧), evidently, is the purchasing cost plus expected holding and shortage cost. Hillier
and Lieberman (2011) and Taha (2007), in their discussion on the progression of their
inventory model, note that 𝐿(𝑧) is a convex function in which a minimum value could be
found. Hence, the minimization of 𝐿(𝑧) is included in this discussion. Taking the first
derivative of 𝐿(𝑧)1 and setting it equal to zero leads to
𝑧
∞
𝑑 𝐿(𝑧)
= 𝑐 + ℎ ∫ 𝜑𝐷 (𝛿) 𝑑𝛿 − 𝑟 ∫ 𝜑𝐷 (𝛿) 𝑑𝛿 = 0
𝑑𝑧
0
𝑧
since
∞
∫ 𝜑𝐷 (𝛿) 𝑑𝛿 = 1,
0
it implies that
𝑐 + ℎ 𝛷𝐷 (𝑧 ∗ ) − 𝑟[1 − 𝛷𝐷 (𝑧 ∗ )] = 0
𝛷𝐷 (𝑧 ∗ ) =
1
𝑟−𝑐
𝑟+ℎ
It must be noted that
𝑑 𝑏
∫ 𝑓(𝑥, 𝑦)𝑑𝑥
𝑑𝑦 𝑎
𝑏 𝜕𝑓(𝑥,𝑦)
= ∫𝑎
𝜕𝑦
𝑑𝑥 (Hillier and Lieberman, 2001).
© Butlig, Regalado, Yodico, 2015. All rights reserved.
95
According to Taha (2007) and Hillier and Lieberman (2011), it is also necessary to prove
that the solution of this equation minimizes 𝐿(𝑧). To begin,
𝑧
∞
𝑑 𝐿(𝑧)
= 𝑐 + ℎ ∫ 𝜑𝐷 (𝛿) 𝑑𝛿 − 𝑟 ∫ 𝜑𝐷 (𝛿) 𝑑𝛿 = 𝑐 − 𝑟 + ℎ 𝛷𝐷 (𝑧) + 𝑟 𝛷𝐷 (𝑧)
𝑑𝑧
0
𝑧
𝑑 2 𝐿(𝑧)
= ℎ 𝜑𝐷 (𝑧) + 𝑟 𝜑𝐷 (𝑧) = (ℎ + 𝑟) 𝜑𝐷 (𝑧)
𝑑𝑧 2
Since ℎ + 𝑠 > 0 and 𝜑𝐷 (𝑧) ≥ 0, it could be concluded that 𝐿(𝑧) is convex; hence, it
could be minimized.
The formulation of the stochastic inventory model with setup cost, according to
Taha (2007) and Hillier and Lieberman (2011) points to the need to develop an (𝑠, 𝑆)
policy. 𝑠 denotes the reorder point; when the level of inventory goes below 𝑠, it signals to
replenish the inventory to 𝑆. 𝑆 is denoted as the level of inventory that minimizes 𝑇𝐶(𝑧);
therefore,
𝛷(𝑆) =
𝑟−𝑐
𝑟+ℎ
and 𝑠 smallest value that satisfies the expression (Taha, 2007; Hillier and Lieberman,
2011):
𝐿(𝑠) = 𝑇𝐶(𝑆) = 𝐾 + 𝐿(𝑆)
is the level of inventory that Evidently, 𝑠 < 𝑆.
The addition of a setup cost 𝐾 to the cost equation means that 𝐿(𝑧) is raised 𝐾
units above to become 𝑇𝐶(𝑧). To present the analysis lucidly, a graph will be shown in
Figure 6.1.
© Butlig, Regalado, Yodico, 2015. All rights reserved.
96
Figure 6.1. Graph for the Stochastic Single Period Model
This means that when 𝑥 is the amount of inventory on hand before an order is placed, the
amount of units to be ordered must be investigated under three conditions (Taha, 2007;
Hillier and Lieberman, 2011):
Case 1: 𝑥 < 𝑠, when the inventory is less than the reorder point 𝑠. In this case, there are
two options: do not order of raise the inventory level to 𝑆 it is logical to order because
min 𝑇𝐶(𝑧) < 𝐿(𝑥)
𝑧≥𝑥
𝐾 + 𝐿(𝑆) < 𝐿(𝑥)
Case 2: 𝑠 ≤ 𝑥 ≤ 𝑆, when the inventory level is above the reorder point yet less than the
level of inventory after replenishment. It is not recommended to order because
min 𝑇𝐶(𝑧) ≥ 𝐿(𝑥)
𝑧≥𝑥
Case 3: 𝑥 > 𝑆, when one intends to raise the inventory above the after-replenishment
level. It is also not recommended to order since
𝐿(𝑥) < 𝑇𝐶(𝑧)
© Butlig, Regalado, Yodico, 2015. All rights reserved.
97
The optimal policy is therefore summarized as (Taha, 2007; Hillier and Lieberman,
2011):
𝐼𝑓 𝑥 < 𝑠, 𝑜𝑟𝑑𝑒𝑟 𝑆 − 𝑥
𝐼𝑓 𝑥 ≥ 𝑠, 𝑑𝑜 𝑛𝑜𝑡 𝑜𝑟𝑑𝑒𝑟
Hillier and Lieberman (2011) note that the stochastic single-period model could only be
used to plan ahead only one period at a time. Although the model could be extended to a
multi-period one, the exact values 𝑠 and 𝑆, which may vary for each period, is very hard
to determine (Hillier and Lieberman, 2011).
If there is an availability of complete quantitative records and reports,
recommendations and the assessment of the benefits and cost will be able to be accurately
quantified.
6.7.2. Microsoft Dynamics NAV
The Philippine Red Cross Rizal Chapter will be using Microsoft Dynamics NAV
as their main software. The staff and volunteers will be trained how to use the software
and there will also be a trial period in order for them to get accustomed to it. The new
software will make the inventory management easier, more reliable, and more efficient.
The stated recommendations will not be affected by the use of Microsoft Dynamics
NAV. However, if Microsoft Dynamics NAV will have a malfunction, there should be a
back-up database in order to avoid disruptions with regard to the operations of Philippine
Red Cross Rizal Chapter.
© Butlig, Regalado, Yodico, 2015. All rights reserved.
98
BIBLIOGRAPHY
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Bullock, J., Coppola, D., & Haddow, G., (2008). Introduction to Emergency
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Effective Supply Chain Management to Support UNHCR’s Beneficiaries. Retrieved
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Heck, Guido van (2009). Inventory Management: Introducing a Framework to Assess
Operational Management. Retrieved 26th of February from
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eling_Infrastructure_Systems_and_Services/Sectie_Informatie_en_Communicatie_Tec
hnologie/medewerkers/jan_van_den_berg/news/doc/GvHeck_THESIS_FINAL.pdf
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International Federation of Red Cross and Red Crescent Societies (2002). Handbook for
Delegates 2002. Retrieved 22nd of April 2015 from
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Red Crescent Societies (2008). Handbook of the International Red Cross and Red
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Michigan Department of State Police (2012). Local Disaster Logistics and donations
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Management_Planning_Handbook_-_Pub_107a__Stakeholder_Review_Draft_Sept_396838_7.pdf
Muller, M. (2011). Essentials of Inventory Management (5th ed.). New York, USA:
American Management Association (AMACOM)
Ozbay, K. & Ozguven, E. E. (2006). A Stochastic Humanitarian Inventory Control Model
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Humanitarian_Inventory_Control_Model_for_Disaster_Planning/links/5400b6760cf2c
48563ae7914.pdf.
Ozguven, E. (2012). A Secure and Efficient Inventory Management for Disasters.
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Philippine Red Cross-Rizal Chapter. 9th Chapter Assembly: Effective Delivery of Red
Cross Services Through Strengthened Branches. Manila, Philippines:PRC Rizal
Chapter
Ponnaiyan, S. (2013). Supply Chain Network Planning For Humanitarian Operations
During Seasonal Disasters. Retrieved 9th of December 2014 from
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f
Reyes, P., Man, J., and Jaska, P. (2013). A Disaster Relief Inventory Model Based on
Transshipment. Independent Journal of Management and Production. Retrieved 9th of
December 2014 from http://ijmp.jor.br/index.php/ijmp/article/viewFile/105/pdf
Roebuck, Kevin (2012). Supply Chain Management (SCM): High-impact Strategies What You Need to Know: Definitions, Adoptions, Impact, Benefits, Maturity, Vendors.
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ing+costs+of+inventory,+asset+management,+inventory+forecasting,+inventory+valua
tion&source=gbs_navlinks_s
Ruivo, P., Johansson, B., Oliveira, T., and Neto, M. (2013). Commercial ERP systems
and user productivity: A study across European SMEs. Procedia Technology, 9.
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Sharifyazdi, M; Navangul, KA; Jahre, M (2013). On-And-Off-Shore Prepositioning and
Delivery Mechanism for Sudden-Onset Disaster Response, 4. Retrieved 6th of
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Stapleton, O., Tomasini, R., & Van Wassenhove, L. (2008). Corporate Responses to
Humanitarian Disasters: The Mutual Benefits of Private-Humanitarian Cooperation.
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Sternad, S. and Bobek, S. (2012). Success Factors for Dynamics NAV Solution
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Taha, H. (2007). Operations Research: An Introduction. Retrieved from
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Thomas, L. (2005). Capacity for Building Local NGOS: A Guidance Manual for Good
Practice. London, UK: Catholic Institute for International Relations
UNHR, ASEAN Committee on Disaster Management, BAKORNAS PB (2008). ASEAN
Training On Emergency Logistics Management – Participant Guide. Retrieved 27th of
February from
http://www.researchgate.net/profile/Eren_Ozguven/publication/239439262_Stochastic_
Humanitarian_Inventory_Control_Model_for_Disaster_Planning/links/5400b6760cf2c
48563ae7914.pdf.
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van Wyk, E., Bean, W., and Yadavalli, V. (2011). Modeling of Uncertainty in Minimizing
the Cost of Inventory for Disaster Relief. South African Journal of Industrial
Engineering 22 (1): 1-11. Retrieved 7th of December 2014 from
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df?sequence=1
Weibull.com. Fault Tree Analysis. Retrieved 6th of May 2015 from
http://www.weibull.com/basics/fault-tree/
© Butlig, Regalado, Yodico, 2015. All rights reserved.
104
APPENDICES
Appendix A. Images of storage of goods
© Butlig, Regalado, Yodico, 2015. All rights reserved.
105
Appendix B. Philippine Red Cross Rizal Chapter Annual Reports
Appendix B.1. Difference in presenting reports in general
© Butlig, Regalado, Yodico, 2015. All rights reserved.
106
Appendix B.2 Incident Report
Appendix B. 3 Differences in Relief Operation
© Butlig, Regalado, Yodico, 2015. All rights reserved.
107
Appendix C. Relief Packs Released
Month
January
February
March
April
May
June
July
August
September
October
November
December
Number of Relief Packs Released Per Family
2005
2006
2007
2010
2013
68
136
0
123
200
0
88
86
128
0
0
131
322
3
0
181
178
3298
184
212
0
627
236
98
0
0
294
266
99
0
115
23
4371
0
455
11
33
0
0
2
253
0
0
38
0
0
0
144
63
11
158
0
8
25
0
354
0
0
339
1
© Butlig, Regalado, Yodico, 2015. All rights reserved.
2014
0
71
78
124
0
21
3272
224
483
0
0
683
108
Appendix D. EM-DAT Data for Natural Disaster
Disaster No
Type
Date
2010-0543
2010-0659
2011-0379
2012-0272
2012-0500
2013-0274
2013-0395
2013-0433
2014-0330
2014-0479
Storm
Flood
Storm
Flood
Storm
Flood
Earthquake
Storm
Storm
Storm
18-10-2010
24-12-2010
24-09-2011
6/8/2012
4/12/2012
13-08-2013
15-10-2013
8/11/2013
17-09-2014
12/12/2014
Total
Total
damage
Death
('000 US$) ('000)
2009026
275745
1972446
110
3030846
178881
103
4451725
72330
112
6246664
898352
1901
3096422
2190000
3222224
230
16106870
10000000
7354
2052157
75783
4150400
Total affected
Disaster No
Type
Date
2011-0379
2013-0430
2014-0227
Storm
Storm
Storm
24-09-2011
12/10/2013
15-07-2014
Total Damge in
US
344173
96723
165492
Disaster No
2010-0308
2010-0391
2011-0519
2012-0031
Type
Storm
Epidemic
Storm
Earthquake
Date
12/7/2010
1/1/2010
15-12-2011
6/2/2012
Total Death
146
737
1439
113
© Butlig, Regalado, Yodico, 2015. All rights reserved.
109
EM-DAT Data for Technical Disasters
Disaster No
Type
Date
2010-0095
Transport accident
Miscellaneous
accident
Transport accident
Transport accident
Miscellaneous
accident
Miscellaneous
accident
Transport accident
Transport accident
Transport accident
Transport accident
6/3/2010
2010-0165
2010-0412
2010-0620
2011-0058
2011-0059
2011-0502
2013-0318
2013-0522
2014-0358
Disaster No
2010-0226
2010-0632
2011-0060
2011-0565
2012-0170
2012-0239
Total
affected
11
Total damage Total
('000 US$)
Death
25-04-2010 2000
18-08-2010 9
3/12/2010
14
40
14-02-2011 10006
234
8/2/2011
10/12/2011
17-08-2013
16-12-2013
13-09-2014
20011
20
629
20
14
467
Date
13-06-2010
Total Death
15
18-12-2010
15
29-01-2011
25-12-2011
13-06-2012
12
22
24
9/5/2012
18
Type
Transport accident
Miscellaneous
accident
Miscellaneous
accident
Transport accident
Transport accident
Miscellaneous
accident
© Butlig, Regalado, Yodico, 2015. All rights reserved.
18
137
22
110
Appendix E. Prices
Item
Unit
Bond Paper Black per page
and White
Printing (8.5 x 11")
Ring Bind
per document
Supplier 1
Price Per Unit (Php)
Supplier 2 Supplier 3
1.001
0.652
2.503
Average
Price
1.38
20.004
45.005
25.006
30.00
1
http://www.olx.ph/index.php/view+classifieds/id/72665049/PISO+print++document+printing+%28Bulk%29+or+per+page?referralKeywords=document+printing
+price+list&event=Search+Ranking,Position,1-1,1
2
http://www.olx.ph/index.php/view+classifieds/id/72014869/Full+Color+Letterhead+Pri
nting+%28Paper+Included%29+.65+cent+per+page?referralKeywords=printing+prices+
bond+paper&event=Search+Ranking,Position,1-16,16
3
http://www.olx.ph/index.php/view+classifieds/id/72155365/Mini+Offset+Printing%2C+
Laser%2C+Smudge+proof%2C+Off+set+Print%2C+Offset?referralKeywords=printing+prices+bond+paper&event=Search+Ranking,Position,113,13
4
http://www.olx.ph/index.php/view+classifieds/id/72124053/Affordable+Reprint+Medica
l+Books+Colored+Hard+Soft+or+Ring+Bind+p1?referralKeywords=book+binding+pric
e&event=Search+Ranking,Position,1-15,15
5
http://www.olx.ph/index.php/view+classifieds/id/72548701/Books+Yearbook+Comics+
Printing+Perfect+Binding+Quezon+City?referralKeywords=book+binding+price&event
=Search+Ranking,Position,1-5,5
6
http://www.olx.ph/index.php/view+classifieds/id/72124143/Affordable+Reprint+Medica
l+Books+Colored+Hard+Soft+or+Ring+Bind+p2?referralKeywords=book+binding+pric
e&event=Search+Ranking,Position,1-14,14
© Butlig, Regalado, Yodico, 2015. All rights reserved.
111
Poster Printing (18
x24")
Sticker Paper (8.7
x 11.69")
Warehouse
Compartment
(2.5mx2.4mx2.7m)
per poster
100.007
50.008
150.009
100.00
per 25 sheets
100.0010
76.0011
68.0012
81.33
Per
compartment
7,000.0013
5000.0014
5,999.0015
5,999.67
7
http://www.olx.ph/index.php/view+classifieds/id/42599462/large+format+printing?refer
ralKeywords=Poster+print&event=Search+Ranking,Position,1-11,11
8
http://www.olx.ph/index.php/view+classifieds/id/72233443/large+format+printing?refer
ralKeywords=Poster+print&event=Search+Ranking,Position,1-13,13
9
http://www.olx.ph/index.php/view+classifieds/id/72261650/GREM+Advertising+%26+
Printing?referralKeywords=price+list+poster+printing&event=Search+Ranking,Position,
1-12,12
10
http://www.olx.ph/index.php/view+classifieds/id/72341207/Sticker+Paper+Waterproof
+Glossy?referralKeywords=a4+sticker+paper&event=Search+Ranking,Position,1-1,1
11
http://www.alibaba.com/product-detail/Sticker-Labels_127620504.html
12
http://www.alibaba.com/product-detail/Stickers-Labels-Sticker-Labels-Printingor_50004661885.html
13
http://www.alibaba.com/product-detail/Guaranteed-Quality-Steel-Custom-PrintingHeavy_60173362550.html
14
15
http://www.alibaba.com/product-detail/Warehouse-Rack_100014545.html
http://www.costuless.com.ph/virtuemart/racking-storage-systems/racking-systems/sr6dg-steel-racking-system.html
© Butlig, Regalado, Yodico, 2015. All rights reserved.
112
Appendix F. Disaster Inventory Management Manual
© Butlig, Regalado, Yodico, 2015. All rights reserved.
Disaster Management Services
Inventory
Management
Manual
Philippine Red Cross
Rizal Chapter
May 2015
Philippine Red Cross Rizal Chapter Disaster Management
Services Inventory Management Manual |i
Table of Contents
The Philippine Red Cross
1
The Philippine Red Cross Rizal Chapter
2
PART I. GENERAL INFORMATION
I.A. Description of Disaster Management Inventory Manual
3
I.B. Purpose
3
I.C. Objective
4
I.D. Proper Use of Manual
4
PART II. ROLES AND RESPONSIBILITIES FOR INVENTORY MANAGEMENT
CONTROL
II.A. Before and After Disaster
5
II.A.1 Chapter Head
5
II.A.2 Branch Administrator
6
II.A.3 Inventory Relief Manager
6
II.B. During Disaster
7
II.B.1 Overall Operation Branch Head
7
II.B.2 Committee Heads
7
II.B.3 Volunteers
8
II.B.4 Committees
8
PART III. INVENTORY MANAGEMENT CONTROL PROCESS
III.A Segregation of Donated Goods
10
III.B Method of Storage of Goods
11
III.C Storage Cleaning and Maintenance
12
III.D Physical Counting and Monitoring of Inventory
13
Philippine Red Cross
Rizal Chapter
© Butlig, Regalado, Yodico, 2015. All rights reserved.
Philippine Red Cross Rizal Chapter Disaster Management
S e r v i c e s I n v e n t o r y M a n a g e m e n t M a n u a l | ii
III.E Disposal of Damaged and Expired Goods
15
III.F Receipt of Donations
15
III.G Releasing of Goods from Storage
17
III.H Packing of Relief Goods
18
III.I Releasing of Relief Packs
20
III.J Generation of Reports
21
PART IV. INVENTORY MANAGEMENT OPERATIONS PROCESSES
IV.A Overall Disaster Relief Operations System
25
IV. B Disaster Relief Operations Processes
26
PART V. APPENDICES
Appendix A. Storage Layout
31
Appendix B Disaster Management Inventory Forms
34
Appendix B.1 Maintenance Log Sheet
34
Appendix B.2 Relief Inventory Form
35
Appendix B.3 Damaged Goods Log Sheet
36
Appendix B.4 Acknowledgement of Donation In-kind Form
37
Appendix B.5 Donated Goods Log Sheet
38
Appendix B.6 Goods Released Log Sheet
39
Appendix B.7 Relief Pack Count Log Sheet
40
Appendix B.8 Relief Pack Released Log Sheet
40
Appendix B.9 Awards Distribution Sheet
41
Appendix B.10 Relief Pack Returned Form
42
Appendix B.11 Record Monitoring Log Sheet
42
Appendix C Reports Format
43
Appendix C.1 Maintenance Monthly Report
43
Appendix C.2 Relief Pack Monthly Report
44
Appendix C.3 Goods In Storage Report
45
Appendix C.4 Maintenance Annual Report
46
Appendix C.5 Relief Pack Annual Report
47
Appendix C.6 Goods In Storage Annual Report
48
Philippine Red Cross
Rizal Chapter
© Butlig, Regalado, Yodico, 2015. All rights reserved.
Philippine Red Cross Rizal Chapter Disaster Management
S e r v i c e s I n v e n t o r y M a n a g e m e n t M a n u a l | ii
Philippine Red Cross
Rizal Chapter
© Butlig, Regalado, Yodico, 2015. All rights reserved.
Philippine Red Cross Rizal Chapter Disaster Management
Services Inventory Management Manual |1
THE PHILIPPINE RED CROSS (PRC)
The Philippine Red Cross is the premier non-political, non-religious, independenthumanitarian organization in the Philippines. It aims to provide aid and services to the
Filipinos in order to protect their lives and their dignity as well as help in their recovery in
disastrous and vulnerable situations. The organization was officially established in 1947
but it traces back its roots during the Philippine Revolutionary days. At the present,
Philippine Red Cross (PNRC) has six major services in order to aid and promote
awareness amongst the Filipinos. The following services that PNRC offers are listed
below:
Disaster Management Services. Disaster Management Services aim to minimize,
reduce, if not eradicate the effects that disasters entails by providing knowledge and
skills for the Filipinos to be more aware and prepared. In addition, they provide
rehabilitation and relief assistance to victims of disasters.
Blood Services. Blood Services provide safe blood and blood products under a quality
management system.
Safety Services provides training for volunteers on first aid, swimming, water safety,
and basic life support-Cardio Pulmonary Resuscitation (CPR), and rescue measures and
procedures.
Community Health and Nursing Services. The Community Health and Nursing
Services provide the vulnerable and underserved quality and basic health services.
Social Service focuses on counseling, inquiry tracing, health and welfare reporting,
inter-country case work, and emergency leave assistance for the Filipino in the US
military service.
Red Cross Youth.The Red Cross Youth educates and empowers the youth, and
cultivate them to be the best servers and leaders of humanitarian activities.
Philippine Red Cross
Rizal Chapter
© Butlig, Regalado, Yodico, 2015. All rights reserved.
Philippine Red Cross Rizal Chapter Disaster Management
Services Inventory Management Manual |2
THE PHILIPPINE RED CROSS RIZAL CHAPTER
The Philippine Red Cross Rizal Chapter became an independent Chapter from being
a Sub-Chapter of the Manila Chapter in 1948 led by Governor Sixto Antonio and Mr.
Maximo Hernandez as Chairman and Vice Chairman, respectively. Having a wide area
of jurisdiction, the Rizal Chapter created branches and sub-chapter in each city/province
under its jurisdiction in order to ensure a quality, fast, and efficient service to the Filipino
citizens. As of 2014, there are nine (9) branches and one (1) sub-chapter under the
jurisdiction of Philippine Red Cross Rizal Chapter:

Las Piñas Sub-Chapter

Makati Branch

Mandaluyong Branch

Muntinlupa Branch

Parañaque Branch

Pasig-Pateros-Taguig Branch

San Juan Branch

East Rizal Branch

South Rizal Branch

West Rizal Branch
Source: 9th Chapter Assembly: Effective Delivery of Red
Cross Services Through Strengthened Branches, n.d.
Philippine Red Cross
Rizal Chapter
© Butlig, Regalado, Yodico, 2015. All rights reserved.
Philippine Red Cross Rizal Chapter Disaster Management
Services Inventory Management Manual |3
PART I
GENERAL INFORMATION
I.A
Description of Disaster Inventory Management Manual
“Philippine Red Cross Rizal Chapter Disaster
Policy Handbook Title
Management Services Inventory
Management Manual”
Authors
Contributors to the Policy Concept
Policy Focus
I.B

Aubrey Butlig

Patricia Minette Regalado

Jayson Yodico

Philippine Red Cross National

International Federation of Red Cross
Disaster Inventory Management System
Purpose
The Philippine Red Cross Rizal Chapter Disaster Management Services
Inventory Management Manual is designed to establish efficient and sustainable
procedures for the management of relief items of Philippine National Red Cross – Rizal
Chapter and its branches. The relief items include food items such as canned goods,
noodles, biscuits, sacks of rice, clothes, blankets and other items alike. The processes
to be included in this manual are the receipt and tagging of goods, physical inventory
count, record keeping, release of goods from the storage area and from the branch,
acceptance of in-kind donations, report of missing goods, and disposal of expired food
items.
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I.C
Objectives
This policy handbook is intended to outline the necessary details for a
sustainable and efficient disaster inventory management procedures for PNRC Rizal
Chapter. Hence, the handbook aims to achieve the following objectives:
●
Facilitate easy counting and control over stored items therefore ensuring that
sufficient quantities are on hand to meet agency needs;
●
Clarify roles and responsibilities among Red Cross personnel with regards the
inventory during or before/after disaster;
●
Ensure that inventories are safeguarded from loss due to deterioration,
obsolescence and expiration
●
That supplies and materials inventories are accurately reported,
●
That based on the cost benefit of maintaining inventory records, that
departments and units do not spend unnecessary time and effort inventorying
low dollar value items, and
●
Expedite process flows that would instigate the aforementioned objectives.
I.D Proper Use of Manual
A hard copy and soft copy of Philippine Red Cross Rizal Chapter Disaster
Management Services Inventory Management Manual must be available in all the offices
under the jurisdiction of Philippine Red Cross Rizal Chapter. It must be easily accessible
and must be administered by the Rizal Chapter Head (for Philippine Red Cross Rizal
Chapter’s office) and Branch Head or appointed person by Branch Head (for the branch
offices).
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PART II
ROLES AND RESPONSIBILITIES FOR INVENTORY
MANAGEMENT CONTROL
This section outlines the responsibilities of the officers with regard to inventory
management control. The officers-in-charge to be discussed in this section are the
following:

Chapter Head

Branch Administrator

Relief Inventory Manager

Overall Operations

Branch Head

Committee Heads

Volunteers.
II.A Before and After Disaster
II.A.1 Chapter Head
The Chapter head is the overall head of the branches under his/her office as well as
the employees. With regards the inventory, the head of the chapter should assume the
following responsibilities:
a. Consolidate inventory monthly reports from the various branches so as to
exercise greater control over inventory, and to see the available goods stored
over various branches as well as the total number of goods for the chapter.
Necessary action may also be instigated so as to further reduce damaged or
expired items The report may also be used as references for future studies.
b. Should there be a report of missing inventory, should initiate, with the aid of the
Branch Administrator, an inquiry about the case and do necessary actions with
regards the findings
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c. Respond to all questions and concerns raised by the branches regarding the
policies and procedures prevailing over inventory control.
II.A.2
Branch Administrator
The Branch Administrator is the head of all the employees in its respective
branch. He/she is knowledgeable of all the activities of the branch including those that
involves inventory. It is his/her responsibility to perform the following with regards
inventory:
a. Supervise the completion of the branch’s inventory monthly report to be
submitted to the chapter head.
b. Should there be a report of missing inventory, should coordinate with the
chapter head in the inquiry about the case.
c. Respond to all questions and concerns raised by the employees/volunteers
regarding the policies and procedures prevailing over inventory control.
II.A.3 Inventory Relief Manager
The Relief Inventory Manager is the employee taking up different roles in the
branch. He/she, however, is the primary person responsible of the inventory and all
related aspects of his/her respective branch. It is only to this officer that access to the
stock room at any particular time is granted. Also, it is to him/her that other parties
should ask permission from in taking/ releasing goods from the storage room. Further,
the relief inventory manager is the person-in-charge of the following:
1) Regularly counting the current inventory content of the storage area
2) Monitoring the inflow and outflow of goods from the storage area
3) Generating the inventory report of the branch submitted to the branch
administrator every month.
4) Ensuring the cleanliness and order or the storage area therefore
promoting an environment that avoids damage to the stocked items
5) Monitoring the expiry of perishable goods and disposing of them properly,
and
6) Securing the goods from access of unauthorized persons
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II.B During Disaster
II.B.1 Overall Operation Branch Head
The Chapter head at the time of disaster takes the role of the overall operations
head therefore tasked to supervise all the activities done during a disasters. The duties
of this person also include the following:
1) Coordinating the timely counts of the available and needed goods/prepared
packs among various officers and committees that deals with the inventory
2) Updating the aforementioned officers of the state of the process -- its items,
materials as well as the personnel involved
3) Takes note of the deployments, the details, and the goods released for it
4) Takes note of the purchases, the details, and the funds used.
II.B.2 Committee Heads
The committee heads are usually the regular employees in that particular branch
of Red Cross. The assignments of tasks are delegated at the first day of disaster. An
officer may assume one or more roles (e.g. the head of two committees). It is the
responsibility of the committee heads to do the following:
1) Coordinates with and update the overall operations officer about the
processes and the outputs consequently generated.
2) Records the values related and reported to the overall head
3) Assign specific tasks to the volunteers under the committee
4) Oversee the performance of the volunteers and check if they are doing things
the right way and efficiently
5) Answers all questions and concerns of the volunteers under the same
committee
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II.B.3 Volunteers
The volunteers may be the regular volunteers of Red Cross or the walk-ins. The
regular ones are contacted at the time of the disaster, pre-oriented, and are usually
assigned the crucial roles. Regardless of this classification however, they are tasked to
do the following:
1) Perform their assignments as designated by their committee head
2) Ask for questions should they be unsure of what they are doing
3) Stay in their committees and ask permission should they be requested to help in
a task with another committee
4) Inform their heads in case that they are taking a break or leaving
II.B.4 Committees
Different Committees are activated to execute the different operations needed for
a disaster. A Committee is composed of a committee head and volunteers. The
committees involved with inventory at the time of disaster and their respective functions
are the following (refer to Table 2.1.):
Committee
Receiving Committee
Function
1) Controls and records the goods received from
purchase or from donations and those released
for packing or for other purposes
2) Responds to the requests of the relief committee
by transferring needed goods
3) Transports the goods from the storage area
4) Arranges the goods according to expiry date
5) Receives donated goods
6) Records the goods received
7) Delivers the goods to the storage area
Relief Committee
1) Packs goods ready for distribution
2) Notes the goods requested and taken from the
storage area (Asks permission from the reception
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committee)
3) Transport also the goods to the vehicle for
distribution
Food Committee
1) Responsible for the welfare of the volunteers and
personnel involved in disaster operations
2) Notes the goods requested and taken from the
storage area (Asks permission from the reception
committee)
Hot Meals Committee
1) Prepares cooked meals for the affected people
2) Notes the goods requested and taken from the
storage area (Asks permission from the reception
committee)
Table 2.1 Disaster Committees
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PART III
INVENTORY MANAGEMENT CONTROL PROCESS
III.A Segregation of Donated Goods
The receipt of donated goods must be systematic and efficient in order to ensure
that the goods are within the standards of Philippine Red Cross.
1) If the goods that arrived are already segregated by type, brand, and expiration
date, they should be kept in their respective container. If they are not yet
segregated, a group of volunteers should segregate them by type, brand, and
expiration date and shall be assigned a particular container.
2) All containers should be sealed well with a tie or packing tape and labeled at the
outer side. The following should be the details of the label as seen in Figure 3.1:

Type and Brand

Expiration Date: month and year

Quantity

Full/Not Full

Code (The code shall be the date of receipt and a number (e.g. 15042201 for the first donation received for April 22, 2015))
Item
Classification:
Brand:
Exp. Date:
Qty.__________
O Full
O Not full ______
Item Code:
Figure 3.1. Goods Storage Container Label
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III.B Method of Storage of Goods
When there are no big disasters, all donated in-kind items shall be stored in a
particular storage area within the branch. The following guidelines should be observed
for an efficient storage area:
1) The manner of arrangement of goods will depend on the storage capacity of the
branch. However, the arrangement should consider the expiration date of the
goods (those that would expire earliest should be nearest the order picking area
as shown in or should be more accessed first). In addition, the fragility and
weight of goods should be considered (e.g. noodles and biscuits should have the
minimum stacking height), as well as the size of the containers (to ensure
balance, the bigger containers should be at the lower part of the stack). In
stacking the goods, the easy accessibility of each container should be ensured. If
boxes are too small to provide accessibility to each box, they should be placed in
bigger container, sealed, and labelled. An example layout of storage area would
be seen in Appendix A.
2) Once, the arrangement of goods is determined, it should be ensured that the
labels of items are facing outward or facing the aisle for easier checking.
Note: At the time of disaster, a temporary storage area shall be made at the same
location of the packing operation. This means that incoming donations as well as nearexpiring food items from the stock room shall be directed or moved to the operations
room. Not all goods from the storage room, however, shall be moved to the said area.
The arrangement of goods in the temporary storage area shall assume the same mode
of arrangement same as the permanent storage area.
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III.C Storage Cleaning and Maintenance
It is essential that the storage areas are suitable for storage of perishable and
non-perishable relief goods. Therefore, cleanliness and order should always be
maintained in order to avoid damage and spoilage of goods (especially perishable
goods).
1) Cleaning and maintenance check of the storage area should be done once
every two weeks. It includes sweeping, dusting, and wiping compartments.
2) If there are major maintenance work needed (fixing compartments, walls,
doors, etc.) it should be fixed at least 2 days after being reported.
3) If there is an observed need for maintenance work seen during the
maintenance check, it should be reported and recorded immediately in the
Maintenance Log Sheet (refer to Appendix B.1) within the day of recognition
of the need with the following details:

type of damage

date recognized

date reported

date fixed

maintenance action done

cost of maintenance
4) The relief inventory manager should be the one who conducts the
maintenance check and should be the one to report and record major
maintenance work.
5) As for the actual cleaning, it is not required to be done only by the relief
inventory manager. However, supervision and authorization of the relief
maintenance manager are needed before other people are allowed to do the
task.
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III.D Physical Counting and Monitoring of Inventory
The physical counting and monitoring of the storage items helps in tracking the
movement of the items in storage and determines the current stock available for use.
1) The inventory manager is responsible for recording the physical count and
the conditions of the goods. It is necessarily solely the responsible of the
relief inventory manager to conduct the actual physical count and inspection.
However, there should be authorization and supervision from the relief
manager if the tasks will be done by other people in the organization.
2) Physical counting and inspection of goods in storage should be done within
the last week of every month.
3) Inspection of the condition of the goods should be done simultaneously with
the physical counting.
4) If the content of the container is full (will be indicated in the label shown in
Figure 3.1.), the details from the label (refer to section III.A.3) should be
recorded. Otherwise, the inspector should count and inspect the contents of
the container and record the finding. In addition, the details of the label
should also be updated by crossing out the previous detail and put the
current detail on the available space in the field and indicate the date below
the new entry as shown in Figure 3.2:
Qty. 9 packs 8 packs09/11/
Figure 3.2. Proper Cancellation of Information
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5) The Relief Inventory Form (refer to Appendix B.2) will be used in order to
record the result of the physical inventory. Each detail should be complete
and clear.
6) If there are damaged or expired goods, it should be recorded immediately in
the Damaged/Expired Goods Log Sheet (refer to Appendix B.3), before
removing the item in storage. The following details should be indicated:

Type of item

Brand

Qty.

Damage/ Expiration description

Expiration date

Date removed
7) Damaged items should be removed on the same day of the inspection.
8) The details of the report should be encoded within the week after the actual
physical count and inspection.
9) The encoded goods should be arranged by expiration date.
10) If the goods will be expired within 3 days based on the Donated Goods Log
Sheet (refer to Appendix B.3), the goods should be automatically removed
from the storage.
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III.E Disposal of Damaged and Expired Goods
Ones the goods are identified as damaged or expired, they should be properly
disposed.
1) Goods that are damaged should be separated from goods that are expired.
2) The goods should be segregated according to the following classifications:
plastic and styrofoam, paper, can or bottles, and biodegradable wastes.
3) Wastes should be put into a garbage container by classification and sealed
properly.
4) The garbage container should be labeled if it is expired/damaged and the
classification of its contents.
5) There should be a designated area which is allotted for wastes.
III.F Receipt of Donations
One of the main resources of goods for disaster management operations are
donations from corporations, institutions, organizations, and individuals. Donations may
come in the form of monetary donations and in-kind donations (food, clothes, blankets,
etc.)
1) Monetary donations are handled by the Cashier Office of Philippine Red
Cross Rizal Chapter. The volunteer will assist the donor to the Cashier Office
for the monetary donation transaction. Then, if the monetary donation is
needed by the Disaster Management Service, the funds will be withdrawn
from the Cashier Office, and the Cashier Office will issue an official receipt to
the Disaster Management Office.
2) Donations that are in-kind (e.g. noodles, rice, canned goods, water, clothes,
etc.) will be received by the First Receiving volunteers under the supervision
of the Receiving/ Reception Committee Head in the designated receiving
area (depends on the branch).
3) Goods that will expire within six months or less should not be accepted.
4) The Second Receiving Volunteer will check the following details of the
donated goods:

Type of good

Brand

Quantity
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
Expiration Date
5) An Acknowledgement Receipt of Donation Form (refer to Appendix B.4) will
be filled out by the First Receiving volunteer assigned in the receiving area,
and signed by the donor and the First Receiving Volunteer who receives the
donation. One copy will be given to the donor, while the other copy will be
kept for the purpose of recording.
6) The Second Receiving Volunteer will put the label (refer to Figure 3.1) on the
container if the container contained goods that are of the same type, brand,
and have the same expiration date. Otherwise, goods will be segregated and
combined with other goods of the similar type, brand, and expiration date until
a container is full and ready for labeling.
7) A Third Receiving Volunteer will take care of segregating the goods if they
are of mix type, brand, and have mix expiration date.
8) Another group of Receiving Volunteers will transfer the labeled goods to the
designated storage area.
9) The Receiving Committee Head must record the donations received every
time there are donations in the Donated Goods Log Sheet (refer to Appendix
B.5).
10) The Goods in Storage Monthly Report (refer to Appendix C.3) must be
generated monthly.
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III.G Releasing of Goods from Storage
Goods which are stored in the storage area (e.g. noodles, canned goods, rice,
clothes, blankets, etc.) during a relief operation and non-relief operation should be
monitored. Therefore, the movement out of goods out of the storage area should be
organized.
1) The Releasing Volunteers/other requesting party should ask authorization
from the Relief Inventory Manager if it occurs before/after the disaster. If the
request occurs during a disaster, the Releasing Volunteers/other requesting
party should ask authorization from the Releasing Committee Head.
2) The Relief Inventory Manage/Releasing Committee Head must accompany
and supervise the requesting party to gather the needed goods.
3) A Goods Released Log Sheet (refer to Appendix B.6) must be filled out and
signed by the Releasing Volunteers/other requesting party and the Relief
Inventory Manage/Releasing Committee Head before the official releasing of
the goods.
4) The Relief Inventory Manager must consolidate the information of the
releasing of good into a Goods in Storage Monthly Report (refer to Appendix
C.3). The report will be generated monthly.
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III.H Packing of Relief Goods
The assembly of relief packs or packing of relief goods only happens during a
disaster or if the stored relief packs do not suffice the demand.
1) Once the goods are brought by the Releasing Volunteers other requesting
party, they will be segregated according to the classification: food items and
non-food items by the First Relief Volunteer.
2) The relief packs content and arrangement should follow the following
standards in Table 3.1:
PACK TYPE
CONTENT
Food Pack
5 canned goods
(intended to supply a family of 5)
5 noodles
5kg rice
Additional: 1 gallon(3.78 L)/ 5 500mL water
bottle
Clothe Pack
2 pants for adults
2 upper garment for adults
4 pants for teenagers/kids
4 upper garment for teenagers/ kids
4 upper garment for babies
4 lower garment for babies
Table 3.1. Relief Packs Content
3) The non-food item containers will be opened by the Second Relief Volunteer
and sorted by other Relief Volunteers.
4) Then the non-food item will be paired and folded (blankets, sleeping mat, or
clothes) by another group of Relief Volunteers. Then it will be packed into a
Philippine Red Cross relief bag by anoother Relief Volunteer. The food item
containers will be placed by Relief Volunteers near the designated area for a
particular food item assembly. One Relief Volunteer per area will be assigned
to open the container.
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5) The Relief Volunteers assigned in packing a particular food-item should
follow the assembly line flow (will depend on the branch).
6) Empty boxes and container from every assembly area should be collected by
Relief Volunteers. Another group of volunteers will segregate them if they
suitable to be containers of relief packs. If they are, they will be brought near
the packing area of tied relief packs. Otherwise, they will be brought to a
designated area for wastes.
7) Relief Volunteers are assigned at the end of the assembly line to tie the relief
bags. Then other Relief Volunteers are assigned to put the relief packs in a
container by a standard number of relief packs per container (depends on the
branch and the capacity of container) ready for delivery. In addition, the
containers of relief packs should be grouped per time of counting. Example
shown in Figure 3.3.:
Relief packs made
during 9am-10am
Relief packs made
during 10 am-11am
Figure 3.3. Relief counting Positioning
8) The Relief Volunteers should count the number of relief packs made and
shall include the following in the Relief Pack Count
Log Sheet (refer to
Appendix B.7) :

Date and time of counting

Quantity

Assigned Person

Signature
9) The Relief Committee Head should consolidate the information from the
Relief Pack Count Log Sheet to generate a Relief Pack Monthly Report (refer
to Appendix C.2) at the of each month.
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III.I Releasing of Relief Packs
After the relief packs are assembled and prepared for delivery. The releasing of relief
packs from the assembly establishment or the branches office should be monitored.
1) One Relief Volunteer per transportation vehicle should count the number of relief
packs loaded in the transportation vehicle.
2) The same Relief Volunteer shall record the following in the Relief Pack Released
Log Sheet (refer to Appendix B.8):

Date and time the loading starts

Date and time of departure of transportation vehicle

License Number of Transportation Vehicle

Quantity of relief bags loaded

Name and Signature of the assigned person who receive the goods

Name and signature of Relief Volunteer who issue the goods
3) Upon the return of the transportation vehicle from the affected area, the Award
Distribution Sheet (refer to Appendix B.9) should be returned. The following
should be encoded by a Relief Volunteer (one per vehicle) on the Relief Pack
Returned Log Sheet (refer to Appendix B.10):

Date and time of arrival of transportation vehicle

License Number of Transportation Vehicle

Quantity of Relief Packs Returned

Assigned person who return the goods

Assigned volunteer who receive the goods
4) The Relief Committee Head should consolidate the information from the Relief
Pack Released Log Sheet (refer to Appendix B.10) and Relief Pack Returned
Log Sheet (refer to Appendix B.10) to generate a Relief Pack Monthly Report
(refer to Appendix C.2).
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III. J Generation of Reports
Records are important in order to know the performance of Philippine Red Cross
Rizal Chapter. In addition, it served as a basis for future decisions and modifications.
1) General Guidelines
a. All records and reports must have complete, concrete, and clear details.
b. All reports must be generated at their exact deadlines.
c. All recorded information must be encoded in the database, following the exact
format within a week after the information is given.
2) Generation of Monthly Reports
a. All monthly reports must be consolidated in one file which is the Disaster
Management Monthly Inventory Report (hard copy and soft copy).
b. The monthly records and reports must follow the method of generation in Table
3.2:
Type final
Report
Presentation
Disaster Management Inventory
Monthly Report
Deadline
At least 2 weeks after the
Hard Copy
month
At least 1 weeks after the
Maintenance Monthly Report
Soft Copy
previous month
At least 1 weeks after the
Goods in Storage Monthly Report
Soft Copy
previous month
At least 1 weeks after the
Relief Pack Monthly Report
Soft Copy
previous month
Table 3.2. Generation of Monthly Report
All monthly reports can be seen in Appendix C.
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3) Generation of Annual Report
a. All monthly reports must be consolidated in Disaster Management Annual
Inventory (hard copy and soft copy).
b. The monthly records and reports must follow the method of generation in Table
3.3.
Type final
Report
Presentation
Deadline
At least 1 month and 2
Disaster Management Inventory
Annual Report
weeks after the previous
Hard Copy
year
At least 3 weeks after the
Maintenance Annual Report
Soft Copy
previous year
At least 3 weeks after the
Goods in Storage Annual Report
Soft Copy
previous year
At least 3 weeks after the
Relief Pack Annual Report
Soft Copy
previous year
Table 3.3. Generation of Annual Report
All annual reports can be seen in Appendix C.
4)
Records and Reports Method of Storage
a. All hard copy reports and records must be kept in a file room, file cabinet, and/or
shelves. It should be segregated by type of records or report, and must be
arranged by chronologically. The file room, file cabinet, and/or shelves ‘ divisions
must be labeled as seen in Figure 5.4:
File Type:
Philippine Red Cross
Rizal Chapter Annual
Report
Year/ Date:
2013-2014
Figure 5.4 Record/Reports Compartment Label
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c. All soft copy records and reports must be segregated by type of record and
report must be segregated per type and arranged chronologically. Each folder
must be named “ (Type of Report)_(Year/Date)” (e.g. “Philippine Red Cross Rizal
Chapter Annual Report_2013-2014”).
d. All soft copy of reports and records must have back-up files in a CD, flash drive,
or external hard drive, and must have a label attached or a list of their content, as
seen in Table 3.3.
No.
File Type
Year/ Date
1
2
:
:
N
Table 3.3 Back-up File Label
e. All storage drive should be put in a designated area and arranged
chronologically. It should be labeled “Back-up Files of Soft Copy of Records and
Reports”
f.
Record rooms, file cabinets, and/or shelves should be cleaned, maintained, and
organized regularly by the second week of every month.
g. Upon borrowing and returning of record and report, the following should be filled
up in the Record Monitoring Log Sheet (refer to Appendix B.11):

Reports or records borrowed

Location

Date and time borrowed

Deadline of return

Date and time of return

Name and Signature of borrower

Contact information of borrower

Name and Signature of the one who issue the report

Name and Signature of the one who received the returned report
h. The authorization of the Branch Administrator or the one appointed by him/her
should be given before any records and reports should be accessed.
Philippine Red Cross
Rizal Chapter
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5) When there is a change of employee in charge of making/keeping the forms
and reports, the previous staff must turnover all the reports and forms in
hand, and the location and type of the reports in the records and reports
storage to the incoming staff.
Philippine Red Cross
Rizal Chapter
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PART IV
INVENTORY MANAGEMENT OPERATIONS PROCESSES
The inventory management system of the Disaster Relief Operations of the
Philippine Red Cross Rizal Chapter are composed of receiving of donations, storage of
goods, releasing of goods, assembly of relief packs, and releasing of relief packs.
IV.A Overall Disaster Relief Operations System
Figure 4.1 Overall Disaster Relief Operations Process Flowchart
The authorized stakeholders for the overall disaster relief operations system are
the Receiving Committee composed of volunteers and administered by the Receiving
/Reception Committee Head, and the Relief Committee composed of volunteers and
administered by the Relief Committee Head.
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Rizal Chapter
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IV. B Disaster Relief Operations Processes
1) Receiving of Donation. There are two types of incoming donations for the
Philippine Red Cross Rizal chapter Disaster Management: monetary donations
and donations in-kind (e.g. noodles, canned goods, rice, water, clothes, blankets,
etc.). This process is done by the Receiving /Reception Committee administered
by the Receiving Committee Head.
2) Storage of Goods. Donations in-kind are arranged in a designated storage are by
the Receiving volunteers by type, brand, and expiration dates. They are
segregated by compartments with labels.
3) Packing of Relief Goods. This process is done by the Relief Committee
administered by the Relief Committee Head. This includes: unpacking of goods,
assembly of relief pack, and releasing of monitoring of relief pack.
Philippine Red Cross
Rizal Chapter
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Activity
Responsibility
Details
START
Receipt of Goods
No
In-Kind?
Direct and Assist
donor to office for
Official Receipt
Reception Volunteer 3
For cash donations, the
donor shall proceed to the
cashier to be issued an
official receipt
Yes
Checks goods of the
details needed in
the form
Fill-up receiving/
acceptance form
Take note of the
details
Label boxes/
containers of details
Checking of Goods –
Reception Volunteer 2;
Filling up of acceptance
form – Reception
Volunteer 1
Noting details –
Reception Volunteer 2;
Labelling – Reception
Volunteer 1
Transport to storage
area
Reception Volunteer 1
shall fill out a
receiving/acceptance form.
On the other hand, Relief
volunteer 2 shall check the
goods donated and take
note of the important
details regarding the
donation: expiry date,
quantity, type of good
donated, etc. The donation
information shall be
relayed to Reception
Volunteer 1 so that this
information will be written
as well in the form.
Reception Volunteer 2
shall label the boxes or
containers with the said
important details.
Reception Volunteer 4 shall
transport the goods to the
storage area
A
Philippine Red Cross
Rizal Chapter
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Reception Volunteer 4
Activity
Responsibility
Details
A
Arrange to
classification
Request for
relief
Requesting Party
The requesting party shall ask permission
from the relief inventory manager
(before/after a disaster) or reception
committee (during disasters).
Yes
Note details of
requested goods
and fill up log book
Deliver goods to
designated area
Before/after a disaster –
Relief inventory manager;
During disasters –
reception committee
The officer-in-charge shall accompany
the reserving party in getting their
requested goods. The release of in-kind
donations must be documented as to the
type of item, quantity, and for what
purpose (i.e., for volunteers’
consumption or for relief operations). A
log book shall be used in recording the
aforementioned data.
Requesting Party
B
Philippine Red Cross
Rizal Chapter
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Activity
Responsibility
Details
B
Bring Goods to
Designated Stations
Food Items?
Release Volunteers
No
Open Goods for
sorting
Relief Volunteers
Yes
For volunteeers?
Yes
Open goods for
disstribution
Once the goods are brought
by the Release Volunteers,
it will be checked if it is a
food or non-food item. If it
is a non-food item, the
goods will be opened for
sorting. The other
processes involved with
non-food items are pairing
and folding prior packing.
The aforementioned
activities with regards nonfood items shall be handled
by various relief volunteers
simultaneously.
Relief Volunteers
No
Open goods for
packing
Packing Volunteers
Fill-up bag at station
Packing Volunteers
Move to other
stations
Packing Volunteers
If released goods were food
items, goods will be
brought to their designated
stations. Another group of
volunteers shall be in
charge of opening the
containers and setting
them up for the packing
volunteers. The packing
volunteers shall follow a
flow of packing just like an
assembly line.
No
Bag content
complete?
Yes
C
Philippine Red Cross
Rizal Chapter
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Activity
Responsibility
Details
C
Seal/Tie bag
Packing Volunteers
Packing Volunteers
Move to pile while
counting
No
At the end of the line will be
the sealers who will tie the
relief packs and the counters
who will pile the packs and
count them, reporting to the
committee head or recording
their count every time.
Go signal for
release?
Yes
Release and
transport packs
Record number of
released packs and
other details
Packing Volunteers
Packing Volunteers
END
Table 4.2.
Philippine Red Cross
Rizal Chapter
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PART V
APPENDICES
Appendix A. Storage Layout
1) Storage Area Arrangement
The storage areas of the different branches under the Red Cross-Rizal Chapter
vary in sizes and division, and storage arrangement may consequently vary. An
example storage area arrangement is shown in Figure 5.1
Figure 5.1. Storage Arrangement Example
In this particular example, the following are considered:
1.
The stocking of inventory should consider the axis of the room. The
goods should be stored parallel to the axis of the room.
2.
The door should face an isle.
3.
The width of the isles should be enough to safely maneuver the goods in
store.
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Rizal Chapter
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The layout notes listed above is recommended to be considered with the storage
efficiency guidelines in section so as to be productive while maximizing the use of space.
2) Operations Area Plan
The working areas of various Red Cross branches differ in sizes and division. In
line with this, a box storage area arrangement is shown below. Two working area
diagrams were made: on for the food items (refer to Figure 5.2) and another one for
the non-food items (refer to Figure 5.3).
Figure 5.2 Storage for Food Items
For the food items diagram the stations placed are the snacks and water station,
the reception, the temporary storage area, plastics, goods, sealing and packed items.
Snacks shall be placed at the back of the door so as to minimize distraction on the
packing process. Reception shall be nearest the door as well with the temporary storage
area at its back followed by the assembly line and the stack of finished packs. This is to
minimize the distance travelled by the items therefore reducing movement and effort.
The shaded areas are areas designated to the packing volunteers while the middle area
is allotted for the transferring and opening of the donated goods. It is recommended that
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Rizal Chapter
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tables be used in packing so as to avoid improper postures for the volunteers. Labels
per station and/or floor lines (masking tape) to designate areas would also aid the
facilitation of the operation. In addition, a guide as area layout, the flow of assembly, the
ethical reminders (do’s and don’ts), and the how-to on properly carrying heavy items
should be displayed in the working room.
Figure 5.3. Storage for Non-Food Items
The working area for clothe items shall be separated from that of the food items.
The stations in this diagram are snacks and water, unopened sacks of clothes, the area
for mixed clothes, the packing stations,the sealing station, and the packed items station.
The sacks of clothes shall be opened at the middle of the vicinity, and the shaded areas
in the diagram are for volunteer stations not doing the sorting. The sorting shall be done
at the same time with the other operations concerning clothes (folding, packing, sealing,
etc.).
Philippine Red Cross
Rizal Chapter
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Appendix B Disaster Management Inventory Forms
Appendix B.1 Maintenance Log Sheet
PHILIPPINE RED CROSS
RIZAL CHAPTER
(Branch)
DISASTER MANAGEMENT SERVICES
Maintenance Log Sheet
For the period: ________ to _______
Damage
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Type of Damage
Recognized
Date
Reported
Fixed
Maintenance
Action
Cost (Php.)
TOTAL
Philippine Red Cross
Rizal Chapter
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Appendix B.2 Relief Inventory Form
PHILIPPINE RED CROSS
RIZAL CHAPTER
(Branch)
DISASTER MANAGEMENT SERVICES
Relief Inventory Form
Checker
Type
Canned Goods
Rice
Noodles
Water
Others
Type
Clothes
Blanket
Others
Type
Food
Canned
goods/Rice/Noodles
Water
Non-Food
Clothes
Blanket
Mat
Hygiene Kit
Others
Date
Items in Storage
Food Items
Quantity
Unit
Non-Food Items
Quantity
Unit
Relief Packs
Quantity
Unit
Philippine Red Cross
Rizal Chapter
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Appendix B.3 Damaged Goods Log Sheet
PHILIPPINE RED CROSS
RIZAL CHAPTER
(Branch)
DISASTER MANAGEMENT SERVICES
Damaged/Expired Goods Log Sheet
From period _____ to_______
Item No.
Type
Brand
Qty.
Damage
Description/ Date Removed
Expiration Removed
by
Date
Philippine Red Cross
Rizal Chapter
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Appendix B.4 Acknowledgement of Donation In-kind Form
Donor’s Copy/ Chapter’s Copy
PHILIPPINE RED CROSS
RIZAL CHAPTER
(Branch)
Disaster Management Service
ACKNOWLEDGEMENT OF DONATION IN-KIND
No.____________________
Name of Donor
Address
Contact No.
Email Address
Item
Description
Donated by: _________________
Signature
Expiration
Date
Qty.
Estimated
Cost (Php.)
Received by:___________________
Name and Signature
Contact Info: 697-1508/ 0917-509-30598
Philippine Red Cross
Rizal Chapter
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Appendix B.5 Donated Goods Log Sheet
PHILIPPINE RED CROSS
RIZAL CHAPTER
(Branch)
DISASTER MANAGEMENT SERVICES
Donated Goods Log Sheet
For the period: ________ to _______
Date
Received
Item
Code
Type
Brand
Qty
Unit
Expiration
Estimated
Cost (Php.)
Donated Received
by
By
Philippine Red Cross
Rizal Chapter
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Appendix B.6 Goods Released Log Sheet
PHILIPPINE RED CROSS
RIZAL CHAPTER
(Branch)
DISASTER MANAGEMENT SERVICES
Released Goods Log Sheet
For the period: ________ to _______
Item Code
Type
Brand
Expiration
Date
Qty.
Date
Released
Name and Signature
Received by Released by
Philippine Red Cross
Rizal Chapter
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Appendix B.7 Relief Pack Count Log Sheet
PHILIPPINE RED CROSS
RIZAL CHAPTER
(Branch)
DISASTER MANAGEMENT SERVICES
Relief Pack Count Log Sheet
For the period: ________ to _______
Date
Time
Food
Rice/Noodles
/Canned
Water
goods
Quantity of Relief Pack
Non-Food
Clothes
Blanket
Hygiene
Kit
Mat
Others
Counted by
TOTAL
Appendix B.8 Relief Pack Released Log Sheet
PHILIPPINE RED CROSS
RIZAL CHAPTER
(Branch)
DISASTER MANAGEMENT SERVICES
Relief Pack Released Log Sheet
For the period: ________ to _______
Time
Date
Loading Starts
Departed
Food
Rice/Noodles
/Canned
Water
goods
Quantity of Relief Pack
Non-Food
Clothes
Blanket
Mat
Hygiene
Kit
Others
Vehicle
License No.
Received Released
by
by
TOTAL
Philippine Red Cross
Rizal Chapter
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1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
No.
© Butlig, Regalado, Yodico, 2015. All rights reserved.
Adult
Child
CG/Nd/R
Water
Food
Clothes
Blanket
Mat
No. of Relief Packs Distributed
Non-Food
Award Distribution Sheet
Hygiene
Kit
Others
Contact No.
Address
Place of Distribution:______________________
Date of Distrbution:__________________
We hereby certify that the goods were actually distributed in quantities as indicated above.
Total
No. of Individuals in Family
Name and Signature of Relief Worker
TOTAL
Name of Family
Head
Disater:__________________________________
Date Occurred:____________________________
DISASTER MANAGEMENT SERVICES
PHILIPPINE RED CROSS
RIZAL CHAPTER
(Branch)
Signature
Philippine Red Cross Rizal Chapter Disaster Management
S e r v i c e s I n v e n t o r y M a n a g e m e n t M a n u a l | 41
Appendix B.9 Award Distribution Sheet
Philippine Red Cross
Rizal Chapter
Philippine Red Cross Rizal Chapter Disaster Management
S e r v i c e s I n v e n t o r y M a n a g e m e n t M a n u a l | 42
Appendix B.10 Relief Pack Returned Form
PHILIPPINE RED CROSS
RIZAL CHAPTER
(Branch)
DISASTER MANAGEMENT SERVICES
Relief Pack Returned Log Sheet
For the period: ________ to _______
Date
Time
Food
Rice/Noodles
/Canned
Water
goods
Quantity of Relief Pack
Non-Food
Clothes
Blanket
Mat
Hygiene
Kit
Others
Vehicle
License No.
Received Returned
by
by
TOTAL
Appendix B.11 Record Monitoring Log Sheet
PHILIPPINE RED CROSS
RIZAL CHAPTER
(Branch)
DISASTER MANAGEMENT SERVICES
Record Monitoring Log Sheet
For the period: ________ to _______
Date
No.
File/s
Borrowed
Due
Returned
Borrowed
by
Released
by
Returned
by
Received
by
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Philippine Red Cross
Rizal Chapter
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Appendix C Reports Format
Appendix C.1 Maintenance Monthly Report
PHILIPPINE RED CROSS
RIZAL CHAPTER
(Branch)
DISASTER MANAGEMENT SERVICES
Maintenance Monthly Report
As of ____________
Frequency of
Type of Maintenance Work
Carpentry
Storage Compartment/Equipment
Storage Room
Painting
Storage Comaprtment/Equipment
Storage Room
Plumbing
Others
Problem Reported
Resolved
Not Resolved
Total Cost of Maintenance per
Type (Php.)
OVERALL TOTAL
Philippine Red Cross
Rizal Chapter
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Appendix C.2 Relief Pack Monthly Report
PHILIPPINE RED CROSS
RIZAL CHAPTER
(Branch)
DISASTER MANAGEMENT SERVICES
Relief Pack Monthly Report
As of _________________
Quantity
Type of Relief Pack
Beginning
Inventory
Packed
Released
Returned
Ending
Inventory
Food
Rice/Noodles/Canned Goods
Water
Others
Non-food
Clothes
Blanket
Mat
Hygiene Kit
Others
TOTAL
Philippine Red Cross
Rizal Chapter
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Appendix C.3 Goods In Storage Report
PHILIPPINE RED CROSS
RIZAL CHAPTER
(Branch)
DISASTER MANAGEMENT SERVICES
Goods In Storage Monthly Report
As of _________________
Quantity
Type of Goods
Beginning
Inventory
Donated
Released
Damaged
Expired
Ending
Inventory
Food
Canned Goods
Rice
Noodles
Water
Others
Non-Food
Clothes
Blanket
Mat
Hygiene Kit
Others
TOTAL
Philippine Red Cross
Rizal Chapter
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Appendix C.4 Maintenance Annual Report
PHILIPPINE RED CROSS
RIZAL CHAPTER
(Branch)
DISASTER MANAGEMENT SERVICES
Maintenance Monthly Report
(Year)
Frequency of
Type of Maintenance Work
Carpentry
Storage Compartment/Equipment
Storage Room
Painting
Storage Comaprtment/Equipment
Storage Room
Plumbing
Others
Problem Reported
Resolved
Not Resolved
Total Cost of Maintenance per
Type (Php.)
OVERALL TOTAL
Philippine Red Cross
Rizal Chapter
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Appendix C.5 Relief Pack Annual Report
PHILIPPINE RED CROSS
RIZAL CHAPTER
(Branch)
DISASTER MANAGEMENT SERVICES
Relief Pack Monthly Report
(Year)
Quantity
Type of Relief Pack
Beginning
Inventory
Packed
Released
Returned
Ending
Inventory
Food
Rice/Noodles/Canned Goods
Water
Others
Non-food
Clothes
Blanket
Mat
Hygiene Kit
Others
TOTAL
Philippine Red Cross
Rizal Chapter
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Appendix C.6 Goods In Storage Annual Report
PHILIPPINE RED CROSS
RIZAL CHAPTER
(Branch)
DISASTER MANAGEMENT SERVICES
Goods In Storage Monthly Report
(Year)
Quantity
Type of Goods
Beginning
Inventory
Donated
Released
Damaged
Expired
Ending
Inventory
Food
Canned Goods
Rice
Noodles
Water
Others
Non-Food
Clothes
Blanket
Mat
Hygiene Kit
Others
TOTAL
Philippine Red Cross
Rizal Chapter
© Butlig, Regalado, Yodico, 2015. All rights reserved.