Margeret Hall
1
Abstract
The movement of supplies in a development or humanitarian relief context is one of
the most overlooked areas in the aid distribution field. Cast as a crisis-driven,
solution-based operational arena, relief and development practitioners and donor
communities often underestimate management and maintenance of the supply chain.
As humanitarian disasters increase in scope and number, the resource pool
becomes constricted, thus better management is a necessity. Transparency of
organizational spending becomes more central as the world continues to struggle
recovering from the latest global economic crisis. The need for efficiency and
accountability in relief and development programs is clear. Investigating the actors
involved in and the context of development and humanitarian aid distribution shows
the complexities and issues that are particular to the field, and have been underaddressed to date. This research reviews three expert interviews with international
non-government agencies involved in humanitarian logistics, namely the World Food
Programme, the Supply Chain Management System, and All Hands Volunteers to
inform the creation of operational benchmarks. This analysis displays the challenges
of integrating business-oriented concepts into critical life and death functions and
demonstrates the degree to which supply chain management has been implemented.
In response, this research proposes standardized Key Performance Indicators for
further integration of best practices throughout the aid and development community.
Future work will evaluate supply chain performance against the proposed
benchmarks and KPIs.
Keywords: Humanitarian Logistics, Performance Management, Best Practices
“Supply Chain Management in Humanitarian Logistics:
2
Anatomy of Effective Relief and Development Chains“
1.
Introduction
Worldwide, people are living in situations characterized by extreme fragility and
instability. This comes from both the continuing existence of (extreme) poverty and
an ever-increasing amount of disasters, natural and man-made. A quarter of
humanity currently copes with malnourishment, illiteracy, and lack of access to an
array of domains unknown of in the Western world such as water, sanitation, basic
governance, and infrastructure. Yet, with all of the efforts in both development and
relief aid, supply chain management, or humanitarian logistics, is consistently
underplayed as a necessary and key part of the aid distribution process (Kovács and
Spens, 2007; Holguín-Veras et al., 2012; Best, 2013). David Borstein and Tina
Rosenberg noted in a series of articles in the New York Times “Delivery and
sustainability are slighted because they fall outside the easy-to-measure and easy-toenvision last stage of the solution (Borstein and RosenbergA, 2010).” This is a fatal
error; the authors found that due to a single relatively simple upgrade in logistics
planning and maintenance, a healthcare distributor in Lesotho was able to increase
patient coverage by nearly 600% (Borstein and RosenbergB, 2010). As humanitarian
disasters increase in scope and number, resources become scarcer. Better
management is a necessity. Improving supply chain management (SCM)
mechanisms is one way to achieve increased efficiency and efficacy of international
aid and development (Van Wassenhove and Pedraza Martinez, 2012).
This review performs a meta-analysis on the applicability of private sector supply
chains principles on development and relief logistics. Such an analysis requires a
comprehensive research into the origins of humanitarian logistics. Accordingly the
paper is structured as follows: the following section “Methodological Framework:
Architecting Effective Relief and Development Chain”, the author describes the
design methodology; a synergy of standardized best practices, business critical
benchmarks, and Key Performance Indicators (KPI). The work then presents and
evaluates related literature. In In the section “Benchmarks to create and maintain
effective supply chains” a series of measurable benchmarks are introduced. The
utilization of these benchmarks in conjunction with KPIs is then described in
Margeret Hall
3
“Remapping SCM in the Humanitarian Sector.” In the final section, the author
concludes the paper and discusses future work.
2.
Methodological Framework: Architecting Effective
Relief and Development Chains
This theoretical research intends to align commercial sector best practices with
current humanitarian logistics practice in a series of organization benchmarks and
KPIs. Special attention is paid to competing SCM models and academic discussions,
in particular Hau Lee’s Triple-A model (2004). Further eliciting applicable best
practices, the results of three Strength, Weakness, Opportunity and Threat (SWOT)
analyses with organizational senior leadership from three current humanitarian
logistics actors are integrated. The target organizations were the World Food
Programme as represented by the Logistics Cluster, the Supply Chain Management
System, and All Hands Volunteers. These organizations comprise many aspects of
the public humanitarian sector; covering relief, development, non-governmental
organizations (NGOs), international organizations, government, and ‘young’ and
‘mature’ programs. With these first-hand expert reports it is possible to find common
trends between vastly different portfolios of SCM. Through a compilation of literature
and responses to the SWOT, the baseline for this research’s proposed benchmarks
are created. Having established the common points of relief and commercial
logistics, this research then goes further to suggest performance matrices in the form
of KPIs for SCM strategic assessment.
3.
Related Work
Supply chain management as a holistic management strategy was popularized in the
1990’s, as businesses realized that economies of scale were created by managing
the cost, speed and efficiency of warehousing and transportation of goods and
services, while simultaneously benefiting from positive customer perception (Basu
and Wright, 2008). While this transformation occurred throughout private sector
organizations worldwide, logistics deliberations in the public sector loitered behind.
Professionalized SCM in the relief and development context remains an ongoing
process, in some cases lagging years behind the best corporate practices (Holguín-
“Supply Chain Management in Humanitarian Logistics:
4
Anatomy of Effective Relief and Development Chains“
Veras et al., 2012). For the purposes of this work, relief and development chains are
subsumed under the term “humanitarian logistics” unless otherwise noted.
Demand-side supply chains are complex in any situation; in the development and
relief world much more so due to numerous factors like unknown and/or
unpredictable events which are varied in size, time, geography, scale and type.
Defining supply chain concepts in development related terminology is a first step to
better understanding and creating change in the humanitarian sector. Thomas and
Rock-Kopczak (2005, 2) define the humanitarian supply chain as:
“… the process of planning, implementing and controlling the efficient, costeffective flow and storage of goods and materials, as well as related
information, from
the point of origin to the point of consumption for the
purpose of alleviating the suffering of vulnerable people. [It] encompasses a
range of activities, including preparedness, planning, procurement, transport,
warehousing, tracking and tracing, and customs clearance.”
The key conceptual difference is the clause ‘for the purpose of alleviating the
suffering of vulnerable people.’ The vulnerability of the beneficiary community due to
either natural or man-made disasters intensifies an already acute urgency, where
intensity is calculated as the amount of tasks to be included divided by the time and
resources available (Tomasini and Van Wassenhove, 2009).
3.1
Uncharted Territories: SCM theories in the public sector
Very little research addressed the possibilities of exporting SCM to the public sector
until the end of the 1990’s. Richard Oloruntoba and Richard Gray’s (2006) work on
agile supply chains examines business best practices in management and applies
them to the humanitarian aid supply chain while recognizing that the elements
between the two sectors are similar, though not always transferable. Ron Basu and
J. Nevan Wright also expand supply chains to the not-for-profit arena in their book
Total Supply Chain Management. Their analysis makes a strong case of publicprivate partnerships, citing the efficiency of corporate suppliers over public suppliers
in the post-Hurricane Karina timeframe. Paraphrasing the authors, Wal-Mart was
distributing supplies to the disaster-struck regions before the Red Cross or the
Margeret Hall
5
Federal Emergency Management Agency (FEMA), namely due to Wal-Mart’s
specialization in supply chain and logistics management (2008, 7).
Establishing frameworks for evaluation and issue identification were a first attempt at
subject-matter crossover. Beamon’s work on relief chains draws this need for
identification of the issues and missing pieces of performance measurement (2004).
Availability of baseline data is necessary for measurements of performance, but
baseline data is often not collected in the aid distribution life cycle due to the urgency
of the situation (Beamon, 2004). Anne Davidson (2006) contributed to the debate by
assessing and developing KPIs for humanitarian logistics. Davidson’s four KPIs
relate to appeal coverage, donation-to-delivery time, financial efficiency, and
assessment accuracy. Her focus is mainly on the balance between speed, cost and
efficiency of the value chain, representing a traditional approach to SCM. While
modest compared to corporate KPIs, this represents a crucial attempt to engrain
commercial SCM concepts into the public sector.
Stephen Pettit and Anthony Beresford (2009) address the concept of Critical Success
Factors (CSFs) in humanitarian aid. While common in successful commercial supply
chains, according to the authors this area is ‘poorly addressed’ in humanitarian
logistics. Their proposed CSFs are adapted from a review of commercial SCM and
include supply chain strategy, strategic planning, inventory management, transport
and capacity planning, information management and technology utilization, human
resource management, continuous improvement and collaboration. By addressing
the missing measurements Beamon, Davidson, and Pettit and Beresford attempt to
mainstream commercial concepts into development and humanitarian dialogue. In
giving definition to KPIs and CSFs in humanitarian terms, these authors contributed
an initial framework by which best practices can be established and exported.
3.2
Business applicability of SCM for the humanitarian sector
Supply chain management has been highly monitored and theorized for decades and
composes a vast field of literature in economics, engineering, and business.
Theoretical frameworks from these fields are meant to be broadly applicable
(Stewart, 1997; Stadtler and Kilger, 2008). However, the models that explain the
supply chain phenomena and support its management tend to fall short when it
comes to detailed processes, especially in humanitarian settings.
6
“Supply Chain Management in Humanitarian Logistics:
Anatomy of Effective Relief and Development Chains“
Overriding policy questions on SCM developed in the business world simultaneously.
A major debate coalesced around businesses focusing on traditional core
competencies, by outsourcing their supply chain component in order to create the
best value for money, or investing internal resources in order to maintain in-house
control over the entire life cycle. Oliver Williamson’s (2008) article on outsourcing
makes the case that outsourcing should be seen from the perspective of transaction
costs, and that different types of outsourcing should be utilized at different levels of
transaction costs to the organization. This principle is applicable to humanitarian
actors assuming a thoroughly vetted partnership is established.
The alternative view includes all points of logistics managed within an organization,
including reverse logistics capacities; this can include closed-loop supply chains
(Dekker et al., 2004). A best practice example of this can be seen in Spanish clothier
Zara, which manages all points of procurement, assembly, and transportation to
stores worldwide through a single operations and logistics hub in–house. By directing
the end-to-end process internally, Zara is able to by-pass some of the most common
bottlenecks in supply chain management, including over-stock, stock-outs, and
quality/stock controls (Ferdows, Lewis, and Machuca, 2006). These objectives
represent a best practice to be implemented in humanitarian logistics.
A second debate across the private sector hinges on concepts of efficiency: speed
balanced by cost-effectiveness, or agility, adaptability, and alignment. In order to gain
market advantage over competitors, companies focused on increasing speed and
decreasing delivery costs across the board. This naturally caused management to
focus on speed during the boom periods and cost-effectiveness during the bust
times. While these balancing points are the hallmarks of traditional SCM, companies
focusing on these points were still resorting to mark-downs for stock liquidation, and
occasional stock-outs (Lee, 2004). When compared to the giants of supply chain
management such as Wal-Mart and Amazon, companies struggle to gain market
shares. This led Stanford professor Hau Lee (2004) to theorize a new supply chain
triumvirate: supply chains based on agility, adaptability, and alignment. By focusing
on these three core competencies, organizations become more responsive, better
able to deal with uncertainty, and verify that the interests of all stakeholders are being
counted and met.
Margeret Hall
7
With regards to SCM modeling, Lee’s Triple A model is most applicable to the public
sector. Whereas speed is all-important in humanitarian situations, cost-efficiency is of
secondary importance. This is the challenge of utilizing the conceptual framework of
speed and cost-efficiency balancing. The gains from exchanging logistics expertise
have been shown both by disaster relief efforts from the private sector and by publicprivate partnerships. Benefits derived from public-private partnerships are bidirectional. Private sector logisticians gain from the humanitarians’ experience with
risk-laden, dynamic demand-side SCM (Tomasini and Van Wassenhove, 2009).
Relief and development professionals not only gain from technical expertise of
private sector logisticians, but also from Lee’s concept of alignment. Lee’s model
demarcates forward operational standards for humanitarian logistics.
4.
Remapping SCM in the Humanitarian Sector:
Benchmarks and KPIs to create and maintain
effective supply chains
Cross-industrial best practices in creating and maintaining an effective humanitarian
supply chain have been discussed throughout this research in order to analyze the
hallmarks of an efficient humanitarian supply chain. These best practices are
established both via the completed meta-analysis and a Strengths Weaknesses
Opportunities and Threats interview series completed with the World Food
Programme, the Supply Chain Management System, and the volunteer aid group All
Hands Volunteers (Stanhope, 2011; Jamieson, 2011; Jilnek, 2011). Insights gained
from the interviews form the body of the proposed competitive benchmarks. An
overview of the method and suggested processes is found in Figure 1.
8
“Supply Chain Management in Humanitarian Logistics:
Anatomy of Effective Relief and Development Chains“
Figure 1. The author’s rendition of Humanitarian Benchmarks for Supply Chain Management
Setting criteria allows for standardization in a highly unpredictable field. It also serves
to create quality assurance for stakeholders, namely donor and beneficiaries. Table
1’s eight benchmarks should be following with consistency, and applied as a group
instead of as an ad hoc improvement mechanism. Implementation of these
benchmarks will be a large step forward towards professionalizing the humanitarian
supply chain. The target groups are relief and development supply chain
departments, inclusive of all strategy, planning, assets, communications packages
and systems, procurement and logistics tasks.
Margeret Hall
9
Table 1. Humanitarian Benchmarks for Supply Chain Management
Identify Critical Success Factors
The public sector must define the factors that characterize mission success when providing aid to
beneficiaries. Identification of essential factors for core achievements provides mandate clarity, justification
for expenditures, and accountability to stakeholders (Pettit and Beresford, 2009). Organizations should
adopt an overriding framework that allows for specificity in each relief or development assistance role. CSFs
work with the mission statement and mandate to ascertain the activities which must be completed in order
to have organizational competitiveness.
Demand Forecasting
Proper demand forecasting, when combined with warehousing of small, nonperishable items in sensitive
locations facilitates agility (Duran et al., 2013; Lee, 2004). This also delivers more finely targeted goods to
beneficiaries in a timely manner ahead of the initial post-disaster assessment. SCMS and All Hands
Volunteers highlighted the role of product availability as a measure of data availability as a potential
weakness (Jamieson, 2011; Jilnek, 2011).
Relationship Vetting
Creating relationships with suppliers and partners must be in conjunction with a thorough vetting process. In
accordance with Lee’s model (2004), there must also always be mutual gain. These factors, along with
commitment to humanitarian principles must be considered in contracts. Oxfam’s selective donation base,
including donation refusals, is an excellent example of utilizing only suppliers and partners that are
committed to social-corporate responsibility (Thomas and Fritz, 2006). The vetting process of WFP includes
variables of general organizational dynamics, CSR goals, the effectiveness of the partnership, and value
added, representing a best practice when considering partnerships (Stanhope, 2011).
Consistency across procurement policies
An internal guideline for procuring locally and internationally increases agility, making the value chain more
responsive. WFP and SCMS utilize the ‘best value for money’ principle (Stanhope, 2011; Jamieson, 2011).
WFP’S P4P procurement program gives a framework to buyers on quality, price and volume requiring
standardization across the Procurement group. Deviations from these standards must be reported to Rome
headquarters, a mechanism to increase transparency (Stanhope, 2011). WFP noted that localized
procurement should and does have different measurement requirements when in place. All Hands
Volunteers purchases locally even if supplies aren’t readily available to build the local economy and trust
with community members (Jilnek, 2011).
Outsourcing Matrix
Outsourcing is often useful for non-core activities of development and humanitarian organizations, such as
transportation and warehousing, as defined by the CSF exercise. Outsourcing in the public sector implies
ability to gauge core competencies of the organization in order to manage the vetting and engagement of
suppliers and/or partnerships. Solidly identifying operations which may or may not be outsourced the
organization contributes to adaptability (Lee, 2004; Williamson, 2008).
Human Resources
Newly recruited logisticians must be formally inducted to the organization with a training program for use in
the field and at headquarters (Thomas and Rock-Kopczak 2005). A standardized introduction point will also
foster working relationships in that colleagues can be assured of baseline knowledge. The further
development of professional associations is to be encouraged by senior management, focusing on a crosssection private and public sector professionals. Asynchronous seminars or MOOC technology focusing on
post-disaster and development learning should be held annually at a minimum to avoid loss of institutional
memory and sponsor the trading of knowledge and best practices (Thomas and Rock-Kopczak 2005).
Communications Management
Communication in the field and during operations is essential; this is well-known. Communication between
disasters, with suppliers and partners, and the communications system delivery tools are equally essential.
Clear and established channels of communication are in place with suppliers and partners at all times, and
are not ill-maintained between incidents (Stanhope, 2011). Investment (in terms of funding and training) in
an Enterprise Resource Planning (ERP), cloud computing and/or data management system facilitates
communications management.
Performance Assessment
Performance assessment remains a major constraint in humanitarian logistics (Jamieson, 2011).
Assessing measurement of performance against human lives seems non-calculable. However, achieving
transparent efficiency requires continuous assessment loops as proposed in Figure 1 and the KPIs in
Appendix 1.
10
“Supply Chain Management in Humanitarian Logistics:
Anatomy of Effective Relief and Development Chains“
4.1
Humanitarian Key Performance Indicators
The proposed series of strategic, tactical, and operational KPIs in Appendix 1 are
delineated for use in development and/or relief circumstances. While there are
distinct features to humanitarian operations that preclude the cost vs. efficiency
planning, standards can be adopted and must be rolled out to ensure better use of
resources. Humanitarian organizations, like commercial operations, must constantly
monitor the success of strategies in place in order to adjust or reevaluate non- or
under-producing processes.
This proposed series is not exhaustive by design. KPIs are already available for most
business processes or can be created within innovation projects. In order to avoid
measurement fatigue this assessment series aims to identify and measure only the
most pressing processes. The KPIs are not meant to act as a replacement for
optimization. KPI assessments are also dynamic; when a metric becomes irrelevant
due to innovation or disuse, it should be reformed or replaced. This list is intended to
be a living document for export to humanitarian logistics departments, and can and
should be updated as necessary. By simplifying and decreasing the number of
suggested metrics, and using commonplace data sources when possible, the author
creates an easily adapted and adoptable series of performance matrices. These KPIs
are simplified for public use; this is done purposefully as to not preclude younger or
budget-constrained organizations from adopting the suggested KPIs.
5.
Further Research and Conclusion
As a whole, continued research focusing on rapid-onset disaster management
modeling must be undertaken to have a more complete view of emergency logistics,
and the ability and limitations of private sector processes in said circumstances. The
next phase of this research will evaluate a young and mature humanitarian operation
against the proposed benchmarks and KPIs. While an ex-post metric, this evaluation
will prove the strengths and limitations of this approach. A final area of interest is
communication and feedback processes of beneficiary communities, as a function of
customer relationship management (Jilnek, 2011; Sheppard et al., 2013).
Professionalization of public sector logistics contributes to aid effectiveness and
transparency with clearer, easily monitored results to donors and faster, high quality
Margeret Hall
11
deliveries to beneficiaries. As commercial SCM theories and functions steadily
progressed, economies of scale along the entire value chain and higher customer
satisfaction are created. This can be seen when looking at companies such as Zara,
Wal-Mart and Amazon, which base their corporate strategies on logistics
management and have effective market dominance. With roots in corporate sector
supply chain management practices and theories, new logistics applications help the
humanitarian logistics sector to better respond quickly and flexibly to sudden
disasters and changing aid landscapes. This is a positive trend seen in the largest of
the aid organizations, and must be continued across the broader humanitarian
sector.
Overall, standardization is a first step in enabling this fledgling community to better
serve stakeholders, the donors and beneficiaries. Applying the best practices from
this research by the way of benchmarks and KPIs will map problem areas to increase
effectiveness and transparency in humanitarian and development operations. As aid
effectiveness is an overarching goal for the humanitarian community, better supply
chain management is not only important; it is a necessity.
6.
References
Basu, R., & Wright, J. N. (2008). Total supply chain management. Routledge.
Beamon, B. M. (2004, November). Humanitarian relief chains: issues and challenges.
In Proceedings of the 34th International Conference on Computers and
Industrial Engineering (pp. 1-6). University of Washington.
Best, M. L. (2013). Peacebuilding in a networked world. Communications of the
ACM, 56(4), 30-32.
Borstein, D., and Rosenberg, T.A (October 22, 2010). FIXES: Beyond Ribbon Cutting,
New York Times Online, www.nytimes.com.
Borstein, David, and Rosenberg, T.B (October 18, 2010). FIXES: Healthcare and the
Art of Motorcycling. New York Times Online, www.nytimes.com.
Davidson, A. (2006). Key Performance Indicators in Humanitarian Logistics. Masters
diss, Massachusetts Institute of Technology, Engineering Systems Division.
Boston: MA.
Dekker, R., & Fleischmann, M. (Eds.). (2004). Reverse logistics: quantitative models
for closed-loop supply chains. Springer Verlag.
12
“Supply Chain Management in Humanitarian Logistics:
Anatomy of Effective Relief and Development Chains“
Duran, S., Ergun, Ö., Keskinocak, P., and Swann, J. L. (2013). Humanitarian
logistics: advanced purchasing and pre-positioning of relief items. Handbook
of Global Logistics (pp. 447-462). Springer New York.
Ferdows, K., Lewis, M. A., & Machuca, J. A. (2004). Rapid-fire fulfillment. Harvard
Business Review, 82(11), 104-117.
Holguín-Veras, J., Jaller, M., Van Wassenhove, L.N., Pérez, N., Wachtendorf, T.
(2012). On the unique features of post-disaster humanitarian logistics, Journal
of Operations Management, (30) 7–8, 494-506
Jamieson, D. (7 October 2011). Interviewed by Hall, M. Strengths, Weaknesses,
Opportunities, and Weaknesses in the Supply Chain Management System,
Hotel Cornavin, Geneva Switzerland.
Jilnek, M. (2 November 2011). Interview by Hall, M. Strengths, Weakness,
Opportunities, and Threats for the All Hands logistics base in Leogane, Haiti,
Telephone interview.
Kovács, G., & Spens, K. M. (2007). Humanitarian logistics in disaster relief
operations. International Journal of Physical Distribution & Logistics
Management, 37(2), 99-114.
Lee, H. L. (2004). The triple-A supply chain. Harvard Business Review, 82(10), 102113.
Oloruntoba, R., & Gray, R. (2006). Humanitarian aid: an agile supply chain? Supply
Chain Management: An International Journal, 11(2), 115-120.
Pettit, S., & Beresford, A. (2009). Critical success factors in the context of
humanitarian aid supply chains. International Journal of Physical Distribution &
Logistics Management, 39(6), 450-468.
Sheppard, A., Tatham, P., Fisher, R., Gapp, R. (2013). Humanitarian Logistics:
Enhancing the Engagement of Local Populations. Journal of Humanitarian
Logistics and Supply Chain Management, (3)1.
Stadtler, H., & Kilger, C. (2008). Conclusions and Outlook. Supply Chain
Management and Advanced Planning, pp. 497-502. Springer Berlin
Heidelberg.
Stanhope, A. (20 July 2011). Interview by Hall, M. Strengths, Weaknesses,
Opportunities, and Weaknesses in the United Nations Logistics Cluster: World
Food Programme, United Nations Office in Geneva.
Stewart, G. (1997). Supply-chain operations reference model (SCOR): the first crossindustry framework for integrated supply-chain management. Logistics
information management, 10(2), 62-67.
Margeret Hall
13
Thomas, A., & Fritz, L. (2006). Disaster relief, inc. Harvard Business Review, 84(11),
114.
Thomas, A. & Rock-Kopczak, L. (2005). From Logistics to Supply Chain
Management: The Path Forward in the Humanitarian Sector. Fritz Institute
San Francisco, 2-15.
Tomasini, R. M., & Van Wassenhove, L. N. (2009). Humanitarian logistics. Palgrave
Macmillan Limited.
Van Wassenhove, L. N. and Pedraza Martinez, A. J. (2012). Using OR to adapt
supply chain management best practices to humanitarian logistics.
International Transactions in Operational Research, 19: 307–322.
7.
Appendix I
The overarching strategic concerns in this review have been identified in five areas:
delivery, cost, reliability, capacity and information. A total of 15 tactical KPIs are
proposed. The KPIs are configured by strategic interest, operational level, and
tactical measurements then separated by development and relief value indictors.
Targets are closely aligned with industry standards as discovered throughout the
meta-analysis.1
Strategic
Concern
Tactical KPI
Operational Metric
(relief)
Indicator
Operational Metric
(development)
Indicator
Adaptability in
lead time
Hours between
Creation of a
Reroute Request
and the Setting of
the Request Status
to Closed
Hours after
emergency request
sent (mean,
median)
Days between
Creation of a
Reroute Request
and the Setting of
the Request Status
to Closed
SLA + # business
days (mean,
median)
Donation to
delivery cycle
time (goods
based)
Consignment date goods receipt date
Donations
available within two
weeks (mean,
median)
Consignment date goods receipt date
Donations
available within two
weeks (mean,
median)
Percentage (%) of
item-referenced
goods
Supplied Quantity /
Ordered Quantity
Ratio of PO to nonPO orders
% within SLA
∆(actual delivery
date – SLA
expected delivery
date per supplier)
% within SLA
Delivery
Order fill rates
On-time
delivery
1
# PO and donated
items with item
reference fulfilling
time and quantity
expectations of the
requester / # PO
and donated items
with item reference
∆(actual delivery
date – SLA
expected delivery
date per supplier)
The formulae were developed via the author’s experience with ERP measurements, then were crossreferenced for applicability and target levels by a field-user and business process expert interviews,
and triangulated with an open-source community wiki available from the SAP Users Business
Support. To access the wiki, see http://wiki.sdn.sap.com/wiki/display/KPI/Business+KPIs.
“Supply Chain Management in Humanitarian Logistics:
14
Anatomy of Effective Relief and Development Chains“
Emergency
orders
Cost
Maverick
spend
Stockouts
Percent of
goods on
backorder
White stocks
Reliability
Perfect orders
fill rate
Training
Invoice Value
without PO and
without Contract /
Total Invoice Value
Product volume on
stockout per
commodity type / #
total product lines
per commodity type
Volume of product
on backorder in the
system with firm
customer orders / #
total orders
Volume of
earmarked goods
per region/ total
goods in region
# Perfect Orders
(Order Fill-Rate *
Order Shipping
Accuracy * Damage
free order % * OnTime Order % *
Claim free Order %
* Order Entry
Accuracy * Order
Communication
Accuracy * Order
Document
Accuracy) Outbound / #
Orders-Outbound
(Days of training
per employee +
days of training per
subcontractor) /
year
% of total orders
have standard
shipping
% unplanned
spend
% availability
% of backordered
goods
% availability
% of orders with
zero errors
# learning
objectives
achieved
Working capital
Operating Cash
Flow (cash earned cash payments) /
current liabilities
∆ capital liquidity
Turnover rate
# Leavers in
Department /
Headcount of
Department
% annually
Innovation
# pilots conducted /
# adopted
programs
% of annual
products/services
from innovation
pipeline
Forecast
accuracy
Volume committed
quarterly / volume
closed annually
% accuracy
Capacity
Information
Inventory marked
as urgent freight /
total inventory
delivered
Inventory marked
as urgent freight /
total inventory
delivered
Invoice Value
without PO and
without Contract /
Total Invoice Value
Product volume on
stockout per
commodity type / #
total product lines
per commodity type
Volume of product
on backorder in the
system with firm
customer orders / #
total orders
Volume of
earmarked goods
per region/ total
goods in region
# Perfect Orders
(Order Fill-Rate *
Order Shipping
Accuracy * Damage
free order % * OnTime Order % *
Claim free Order %
* Order Entry
Accuracy * Order
Communication
Accuracy * Order
Document
Accuracy) Outbound / #
Orders-Outbound
(Days of training
per employee +
days of training per
subcontractor) /
year
Operating Cash
Flow (cash
donations - cash
payments) / current
liabilities
# Leavers in
Department /
Headcount of
Department
Gross delivery of
New Products or
Services / Gross
delivery
Volume committed
quarterly / volume
closed annually
% of total orders
have standard
shipping
% unplanned
spend
% availability
% of backordered
goods
% availability
% of orders with
zero errors
# learning
objectives
achieved
∆ capital liquidity
% annually
% of annual
products/services
from innovation
pipeline
% accuracy