Capabilities investment versus prepositioning inventory: a new approach to disaster preparedness

  • Nathan Kunz (Contributor)
  • Reiner, G. (Contributor)
  • Stefan Gold (Contributor)

Activity: Talk or presentationScience to science

Description

- Disaster preparedness has been recognized as a central element in reducing the impact of disasters worldwide. However, donors are reluctant to finance such efforts, as there is no certainty that a disaster will strike. Usual methods of preparedness, such as prepositioning of supplies in countries prone to disasters, are problematic because they require high investment costs at various locations, due to the high uncertainty about the timing and location of the next disaster. Product expiry is a major problem, as there is no inventory turnover (Whybark, 2007). Therefore, Van Wassenhove (2006) proposes relief organizations to invest in effective disaster management capabilities, such as human resources, knowledge management, process management, resources and community. Investing in such capabilities instead of physical assets has several benefits. First, in opposition to prepositioning supplies in specific locations, such capabilities acquired by the organization can be used worldwide. Second, these capabilities, in particular those related with import processes, allow organizations to deliver supplies quickly from a central warehouse in case of disaster. Finally, investments in capabilities cost less than prepositioning supplies in large quantities in many locations.
In this paper, we analyze the effect of investing in these disaster management capabilities, through a system dynamics model. We model the delivery process of a therapeutic food item during the immediate response phase of a disaster. By comparing a standard import scenario with one where investments in capabilities have been made, we quantify the improvement potential of such preparation efforts (i.e., lead time and inventory reduction).
Period23 Aug 2012
Event titleISIR Symposium
Event typeUnkonwn
Degree of RecognitionInternational

Austrian Classification of Fields of Science and Technology (ÖFOS)

  • 502017 Logistics
  • 102009 Computer simulation
  • 502012 Industrial management
  • 502032 Quality management
  • 211
  • 502052 Business administration