International Journal of Combinatorial
Optimization Problems and Informatics
E-ISSN: 2007-1558
International Journal of Combinatorial
Optimization Problems and Informatics
México
Mora – Ochomogo, Elma Irais; Mora – Vargas, Jaime; Serrato, Marco
A Qualitative Analysis of Inventory Management Strategies in Humanitarian Logistics
Operations
International Journal of Combinatorial Optimization Problems and Informatics, vol. 7, núm.
1, enero-abril, 2016, pp. 40-53
International Journal of Combinatorial Optimization Problems and Informatics
Morelos, México
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© International Journal of Combinatorial Optimization Problems and Informatics, Vol. 7, No. 1, Jan-April
2016, pp. 40-53. ISSN: 2007-1558.
Received Dec 10, 2015 / Accepted May 10, 2016
Editorial Académica Dragón Azteca (EDITADA.ORG)
A Qualitative Analysis of Inventory Management Strategies in
Humanitarian Logistics Operations
Elma Irais Mora-Ochomogo, Jaime Mora-Vargas, Marco Serrato
Tecnológico de Monterrey
[email protected], [email protected], [email protected]
Abstract. This paper presents an analysis of the special characteristics of Inventory Management for
humanitarian operations. Each year, many natural and man-made disasters occur, affecting thousands of
people around the globe. During these catastrophes, both, government and humanitarian organizations,
face great logistics challenges in which the main objective is to satisfy the needs of people touched by
such disaster, to mitigate their suffering. To achieve such objective, an adequate Inventory Management
Strategy in these logistics operations plays a crucial role at each echelon of the Supply Chain. This paper
also aims to identify the state-of-the-art of Inventory Management Strategies and models used for
humanitarian logistics operations as well as commercial models with the special features related to it. It
includes its categorization according to crucial criteria and the identification of trends, gaps and challenges
in this field, in to provide valuable insights for future research in this domain.
Keywords: Inventory management; Humanitarian Logistics; disaster relief
1 Introduction
It took only 20 seconds in the life of people in Nepal to be shattered by the 7.8 earthquake that struck on April 25th. In this
catastrophe, there were over 7 thousand casualties and almost half a million houses were either destroyed or damaged, leaving
around 8.1 millions of people to be assisted with at least the basic needs [1]. Just like this crisis, millions of people are affected
each year by either natural or man-made disasters, leaving the local and international humanitarian institutions with the greatest
challenge of supporting an affected population to recover from the emergency and help them return to their normal lives.
The term Humanitarian Logistics (HL) encompasses a wide range of operations including the distribution of medical supplies
for routine disease prevention, food supplies to fight hunger, and critical supplies in the aftermath of a disaster [2]. All the
logistics efforts represent 80% of the total humanitarian efforts in any of the Humanitarian operations [3] this implies a gr eat
responsibility in the humanitarian entities, but also in the academic sector to make efforts to improve the logistic performance in
the humanitarian endeavours.
An essential part of the success in any supply chain is the adequate management of the inventories in every echelon of it. In the
case of HL aims the adequate inventory control and maintenance from the collecting points to the distribution points can make a
difference between life and death. Classic inventory strategies hardly adjust to the conditions found in a crisis or tragedy, these
challenges humanitarian logisticians to develop more adequate strategies and models to manage the inventories of supplies and
help in any emergency.
The aim of this paper is to present some of the key differences between commercial and humanitarian inventories. This with th e
purpose of stating why the classic inventory models are not always the most appropriate way to manage inventories in a
humanitarian scenario. In addition, a literature review and categorization from the different publications that address this subject
will be carried out.
The reminder of this paper is organized as follows. Section 2 describes the particular features in inventory management that are
set in a disaster situation and the challenges they imply. Section 3 defines the research methodology used to develop the
literature review presented in this paper. Section 4 presents the literature review focused on inventory management previous or
after a disaster strikes. Finally, section 5 presents the trends, future research directions and concluding remarks.
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2 Inventory Management In Humanitarian Logistics
Within the literature, research has been done concerning the differences between the commercial logistics and humanitarian
logistics [2] [3] [4]. Including the challenges the latter has been dealing with: the uncertainty of the demand, the disruption of
the roads and the communication channels and the challenge coordinating the many stakeholders involved in the process among
others.
Focusing on the inventory management the next subsection will describe some of the special situations of the Inventory
Management during the disaster relief. In addition, why these special conditions make it difficult to apply the classic inven tory
strategies, which have been widely developed, to humanitarian inventories.
2.1 Time is Crucial
The entire humanitarian supply chain is moved by the desire of supporting people in need and in most cases, help is needed as
soon as possible. This fact leads the expenses to take a second place in the goals of the supply chain and specifically in the
inventory management; it means that humanitarian logisticians will try to pre-position and have ready certain amount of
supplies independently of the holding cost this represents.
Most classic inventory models seek to minimize the inventory cost with strategies like Just In Time to avoid the “unnecessary”
storage. In the humanitarian’s case, the inventories’ goal is not quite defined; it could depend on the organization’s motto, if
they have recurrent activities or if they attend sporadic situations like sudden catastrophes, among other circumstances. In the
case of the International Federation of the Red Cross (IFRC) the goal is to have pre-positioned enough to reach 5,000 families
within the first 24-48 hours and additional 15,000 families within 14 days.
2.2 Non Repetitive Inventories
Many of the classic inventory models and strategies tend to establish a static horizon of time and given the conditions when a
cycle is created making the inventory management a more standardized and efficient process. In a disaster relief situation,
inventories cannot be designed like a repetitive model [5]. This is caused due to the nature of the sudden onset disasters, the
time, place, impact and needs are unknown before and even short time after the disaster strikes; the uncertainty in the disaster
setting makes it problematic to make decisions such as what and when to send or purchase.
After the disaster strikes, the inventory management decisions have to be made with the information available in that moment
that was probably not the same information as the period before and will not be the same as the period after; this makes a very
difficult job to plan ahead and try to standardize the process in a repetitive way.
2.3 No Backlogging Allowed
Another meaningful condition in humanitarian inventory models is that the concept of backlogging is not an option [5]. In
classic inventories -depending on the organization or industry- back s are not an uncommon situation generating backlogs
in the production that can be delivered when they may be ready.
In the case of man-made or natural disasters, human lives are at stake and supplies arriving late or incomplete could have a fatal
result in the affected population; therefore, if the supplies are not available at the moment they are required, they can be
considered as “lost sales” in the commercial world and they will not accumulate for later delivery.
2.4 Donations Uncertainty
The supply process in these situations in most Non-Governmental Organizations (NGOs) is based on donations as the situations
that come after a catastrophe might compromise the commercial supply chains depriving them from doing their usual role. As
donations come, either in the form of money or supplies, and considering that donors are not obliged to fund any given disaster
situation [6] the available supply for a certain disaster in a particular time can be very variable depending on the multiple-
suppliers and donors.
Donors look for an organization with great accountability and less inefficiencies [7], this drives the organizations to have more
transparency in their expenses and justify them to their sponsors with the intention to gain reliability and attract more donations.
Mora-Ochomogo et al. / A Qualitative Analysis of Inventory Management Strategies in Humanitarian
Logistics Operations. IJCOPI, Vol. 7, No. 1, Jan-April 2016, pp. 40-53. ISSN: 2007-1558.
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Another important variable in the donations for each disaster is the visibility the media gives each event. This has a critical
impact in the donations each organization receives and thus the supply each collecting point receives.
2.5 Scarcity and Surplus of Resources
Matching demand to supply is a particular problem in pre-and post-disaster relief activities [8]. Scarcity of vital resources in the
affected area or region is not a rare situation during times of crisis; the local or even national inventories may have been affected
or destroyed in the event and there is not enough supply to satisfy the demand at the time of need.
On the other hand, another issue that can be found in the disaster relief situations is what donors can or want to provide for the
affected people not always match with the needs at the site. This means that unsolicited donations at certain time may arrive to
collecting points and in the warehouses this causes the consumption of limited resources and hinders the flow of the necessar y
resources to the affected people. In these cases, some organizations choose only to accept the required items despite there might
be disagreements with donors.
2.6 Prioritization of goods needed
Just after a crisis, the population’s needs could be so diverse that decide which supplies could be lifesaving and need to be sent
as soon as possible, and which ones can wait to be sent days after certainly represent a big challenge for the humanitarian
logisticians.
With all the different needs in the affected zone, the variety of supplies that arrive to the warehouses and the limited transport
capacity, access and storage space there is almost always a need to prioritize what is moved first.
2.7 Human Resources Variability and Availability
As the funds and the necessities of each operation can be very different, the sustainability of Human Resources will not always
be the same and might vary in each operation as well. The funding might not only vary the quantity of people working in the
operation, but also the preparation of each of them. This situation leads many times to people along the supply chain doing
many different activities and multitasking.
The implication that such situation presents for effective and efficient Inventory Management is that all people involved with the
warehouse management will not always be the amount of people required and they might not be trained and prepared to do all
the necessary or specific activities needed in the warehouse.
2.8 Supplier Development
In the case of a high magnitude disaster or catastrophe the major source of supplies will arrive from abroad through the
government, NGOs or other international organizations, increasing the delivery time. This is because depending on the specifi c
conditions of the disaster the local inventories may be destroyed; in this case the local supplier’s role becomes minimal [2]. If
the local supplies are available and in good conditions will be used first and then supplemented from abroad supplies if needed.
To be prepared for these situations the organizations must find previously potential suppliers and sources to obtain the needed
items [9]. This situation is not found in the private companies because of the effort that entails with no tangible or immediate
benefit. The suppliers for humanitarian tasks should meet specific characteristics to provide the efficient service needed, for
example, be the closest to the disaster area as possible, have the capacity required at the time is needed among others.
2.9 Expiration and Obsolescence
Pre-positioning inventory to be prepared in case a disaster strikes are used by most of the different organizations involved,
however, from the moment that they will be used is highly uncertain, there might be a long period with a very low turnover, this
causes that some items might eventually expire or in the case of technology, they might become obsolete.
Many inventories, such as food and medicines, have expiry dates that must be honoured [9]. As the goods stored will not be
used until a disaster hits, and this could be indefinite, the managers should be particularly aware of the expiration dates of the
supplies that are aimed to be used as provisions in an emergency and replace the non-suitable inventory opportunely.
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Logistics Operations. IJCOPI, Vol. 7, No. 1, Jan-April 2016, pp. 40-53. ISSN: 2007-1558.
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In the case of the equipment stored to use in case of an emergency, after some time and with new technologies being developed,
may become obsolete; therefore, it is important to verify in regular basis that the equipment that is intended to be used is
appropriate and useful in the particular humanitarian conditions.
2.10 Warehouse Location
While in the commercial sector the warehouse location is much of a strategic and permanent decision, this is why it takes time
and a more profound cost-benefit analysis to meet the optimal location and conditions.
In the humanitarian world in case of an emergency, as stated before, short time response is imperative and the conditions are
very variable, therefore the warehouse location in-site in a first instance becomes more a matter of availability than strategy.
The options for selecting the warehouse type and location in-site become restricted. The humanitarian logisticians will source
the best location available in the area of operation looking at access routes, equipment available and from it is expected th e
goods to arrive, including air, sea and land. As the general conditions will evolve through time warehouses must be enough
flexible to be set in houses, offices or even in tents, almost anywhere can become a temporary warehouse. These kind of
conditions makes the stock management different at each event, and even in each location.
2.11 Political and Cultural Matters
During humanitarian situations, the principal administrator of the operations handled is the national and/or local government,
this implies that political and ideological matters will inevitably take part of the situation. The corresponding government will
have a say in the organizations that will enter the affected area, as well as the suppliers and supplies; this situation is important
to consider in the humanitarian affairs because it can alter significantly the plans of any institution, while the private companies
do not have to deal with this type of issues.
In the case of the type of supplies that arrive to the affected place some cultural or even religious beliefs may restrict th e use and
limit the relief efforts, then, in to have an accurate and effective performance in the humanitarian endeavor is critical to
consider each case independently and make particular decisions.
3 Research Methodology
In to make this research as complete as possible and given the limited literature focused on inventory management in
disaster relief, a systematic review methodology was used. This section presents the systematic methodology conducted to
provide a structured and reproducible way [10] [11].
3.1 Identification of Research
In this phase the aim, needs and goals of systematic review are established. In this research the goal is to find as many primary
studies relating to inventory management models and strategies developed to attend the humanitarian situations or are developed
to work under some special circumstances presented in the previous section.
3.2 Material Collection
To do the research 5 databases were selected as search engines; EBSCO Academic Search Premier, ProQuest Science Journals,
ProQuest ABI/INFORM, Emerald Insight and Web of Science. The keywords “humanitarian logistics”, “inventory”,
“uncertainty”, “disruption”, “disaster relief”, “materials handling” were explored in the title, keywords and abstract.
3.3 Inclusion and Exclusion Criteria
Inclusion Aspects. The scope of the literature review presented in this paper includes analytical and empirical academic
publications such as peer-reviewed papers, conference proceedings with full-paper and dissertations because of their academic
relevance. All of the references used for this research are related to inventory management decisions and models in
humanitarian logistics, during disaster relief, in the uncertainty of demand or supply and with disruption; trying to meet most of
the particular characteristics of the pre or post-disaster scenario.
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The works considered are from 2004 to 2015, this is justified by the fact that the increase of the humanitarian logistics academic
research potentially increased due to the Asian tsunami in that year [3][12].
Exclusion Aspects. Manuals, books, governmental and military reports and editorial opinions were excluded from this research,
the inclusion of these references is suggested for future research. Articles concerning solely to provision source selection,
supplier development, performance measurement, pricing, routing or facility location was excluded from the investigation. Non-
English or Spanish articles also were excluded from the analysis.
3.4 Study Selection
After establishing the scope of this research the boundaries were applied to the databases research. After this compilation a total
of 934 documents were found in all databases. In a second filter the duplicates were eliminated and the remaining were
compared to the inclusion criteria previously defined. As the articles were reviewed the sample was expanded with other
pertinent cited articles. Finally, 70 references met the inclusion and exclusion criteria, these are the ones analysed and
categorized in this research. The complete list of references is included in Appendix I.
3.5 Category Selection
The categories used to classify the literature are shown in Figure 1 detailed below. Four new classification criteria are proposed
due to the specific characteristics of the inventory management field, while the rest were used in previous literature reviews.
[13] [14][15]
Fig. 1. Classification framework
4 Results
4.1 General Paper Information
Table 1 ranks the top authors of the publications considered for the review, all of them with at least three issues. The highest
ranking is Emmett J. Lodree Jr. from the University of Alabama. USA represents three out of four of the top ranked authors in
this field.
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Table 1. Top Authors’ General Information a (At Least Three Papers).
Author Author affiliation Country Number of Publications References
Lodree University of Alabama USA 5 Lodree Jr & Taskin (2008),
Taskin & Lodree (2010) Lodree
Jr (2011), (Taskin & Lodree
(2011), Lodree, Ballard, & Song
(2012)
Ozbay The State University
of New Jersey
USA 4 Ozbay & Ozguven (2007),
Ozguven & Ozbay (2012),
Ozguven & Ozbay, (2013),
Ozguven & Ozbay (2015)
Ozguven The State University
of New Jersey
USA 4 Ozbay & Ozguven (2007),
Ozguven & Ozbay (2012),
Ozguven & Ozbay, (2013),
Ozguven & Ozbay (2015)
Taskin ASELSAN, Inc. Turkey 3 Lodree Jr & Taskin (2008),
Taskin & Lodree (2010), Taskin
& Lodree (2011)
a. According to the information obtained in the databases specified in Material Collection section.
4.2 Inventory Focus
Fig. 2 shows the publication distribution per year according to the inventory focus. The documents were divided in two
categories by the approach they had in the presented models. The first category, which is represented by the blue bars, is focused
in models applied to the Humanitarian Logistics context while the second category, represented by the orange bars, is applied to
the commercial context but resembles some of the humanitarian features.
The publications show a crescent tendency and a significant emphasis in 2011, then they decrease having an average of 9.5
publications per year in the past four years.
Fig. 2. Annual Paper Distribution by Inventory Focus
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4.3 Disaster Onset and Lifecycle Stage
In Fig. 3 the papers that are focused in HL by the previous classification are divided by the stage of the disaster lifecycle they
could be applied, the stages that have been proposed throughout the literature are; Mitigation, Preparedness, Response and
Recovery. The stages of Mitigation and Preparedness correspond to the planning before the disaster while the stages of
Response and Recovery are the reaction after the disaster occurs. In the publications analyzed the stages included were
Preparedness, with inventory pre-positioning in most cases, Response, or models including both stages.
These papers were also classified in the type of onset that they are focused on; according to [2] the slow onset disasters ar e the
ones that can be somehow predicted and people can react to them like hurricanes, floods or wars. In the other hand the sudden
onset disasters are the ones that do not allow any reactions like earthquakes or terrorist attacks.
In this case the literature has clearly focused more to the response stage. In the case of the disaster onset, the sudden appearance
disasters are the ones that have been more studied, followed by models that intend to develop models applicable to both, slow
and sudden onset disasters.
Fig. 3. Number of Publications by Disaster Stage and Disaster Onset
4.4 Items Considered
Table II shows the classification of exclusively the publications that develop an inventory model or strategy, either for HL or for
uncertainty in inventories; this excludes the works with qualitative analysis. The documents are divided according to the number
of different types of items considered in their model.
In the literature reviewed most of the models contemplate a single item in both of the inventory focus, Humanitarian Logistics
and Commercial inventories under uncertainty. However, the difference is more notorious in the inventory models under
uncertainty, while in the HL models have more development considering multiple items in their models and strategies.
Table 2. Publications by Items Considered and Focus
Inventory Focus Single-item Multi-item
Humanitarian
Logistics
26 20
Inventory under
uncertainty
18 3
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Logistics Operations. IJCOPI, Vol. 7, No. 1, Jan-April 2016, pp. 40-53. ISSN: 2007-1558.
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4.5 Solution Methodology and Decision Criteria
This classification as well as the previous only includes the works that propose a model or inventory strategy. It divides th e
documents by the goal they pursue with the model and the methodology with which were solved.
The findings presented in Fig. 4 show that the models developed are mostly focused in minimizing costs independently of the
field that are applied, this followed by multi-criteria approach.
The solution methodology that has been more explored is the stochastic programming, this can be due to the stochastic nature of
some of the variables involved, e.g. demand or supply. This is methodology is followed by the linear programming approach.
Fig. 4. Solution Methodology and Decision Criteria Analysis
4.6 Critical Issues in HL Inventories
As presented in Section II there are critical issues that differentiate the commercial and humanitarian inventories. Table 3
presents the literature included in the analysis compared with the issues proposed previously.
With this table we can conclude that the models with No Repetitive Inventories along the time and the urgency of getting the
supplies to the affected area are being considered in most of the documents of the review.
In contrast, the features that are being less considered are the Human Resources Variability, the different Political and Cultural
matters and Expiration and Obsolescence. The less considered features are also the more difficult to quantify because they are
very variable features and they have a qualitative nature.
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Table 3. Decision Criteria vs. Critical Issues in HL Inventories Analysis
Decision criteria Critical issues in HL
1 2 3 4 5 6 7 8 9 10 11
Maximize Benefit
Altay (2012)
Coffrin, Van Hentenryck, & Bent (2011)
Li, Zhang, & Tang (2014)
Mulyono, Nur Budi & Ishida, Yoshiteru
(2014)
Qiu & Shang (2014)
Tysseland (2009)
Minimize cost
Adida, DeLaurentis, & Lawley (2011)
Ahiska, Appaji, King, & Warsing (2013)
Atasoy, Güllü, & Tan (2012)
Beamon & Kotleba (2006a)
Beamon & Kotleba (2006b)
Darwish, Abdulmalek, & Alkhedher
(2013)
DeCroix (2013)
Firouzi, Baglieri, & Jaber (2014)
Hishamuddin, Sarker, & Essam (2012) …
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