Humanitarian procurement coordination - Distributed decision-making as an alternative coordination strategy

Humanitarian procurement coordination (HPC), one of the most critical processes in humanitarian logistics, is generally coordinated in a decentralized manner, i.e. decisions are made within single NGOs. As the complexity and dynamics of humanitarian supply chains reach unexpected levels, traditional coordination strategies, such as centralized and decentralized coordination seem to fail. Incorrect, insufficient or redundant supplies into catastrophic regions are characteristic for decentralized procurement coordination. Distributed decision-making (DDM), as an alternative coordination approach, offers the opportunity for overcoming problems and challenges related to traditional coordination mechanisms. DDM can be described as the process of segregating complex multi-person decision problems into more tractable subsystems and coordinating them in line with an overall welfare function or some equilibrium condition (Schneeweiss, 2003). This coordination strategy includes group decision-making, where each of the multiple group participants contributes to a final decision by performing one or more tasks (Ching et al., 1992). DDM generates procurement decisions that consider individual views and private information of stakeholders, thus leading to a more efficient demand satisfaction process. This paper focuses on DDM as an alternative coordination strategy and presents a conceptual DDM model including a reverse auction-based framework for enhanced cooperation between humanitarian stakeholders.