The International Federation of Red Cross: Using Hls Web-based System

Introduction

The International Federation of Red Cross (IFRC) is an organization which operating activities are filled with unpredictability and urgency, that many of the fundamentals that apply to normal business supply chains do not fit as readily. It is hard to find a prototype that can cater to the needs of the organisation. Before Humanitarian Logistics Software (HLS) was fully implemented in September 2003, business processes at Red Cross relied on spreadsheets and manual processes in the Geneva office.

Deficiencies in the previous Red Cross supply chain

The overall incompetence of the supply chain model is due to its centralised system. The fact that all information had to be passed down via the team in Geneva before it reaches the various organisations through one channel, results in a significant issue of inefficiency.

Hence due to this, IFRC was incompetent to organise relief efforts in a timely manner. Its assistance did not begin reaching victims until weeks after the disaster hit, which was also a prolonged period after the other aid organisations were dispatched to the site. This inefficient conduct of IFRC has made donors ponder about whether their money was worthwhile and had second doubts if IFRC was adequate enough to manage a world-class supply chain that could be responsive to emergencies in an efficient and cost-effective way.

Many organizations would send unsolicited goods, which interfered with IFRC’s ability to obtain and distribute the needed relief supplies. They did not have a proper system where the donated items would be sorted out and it hindered the progress of delivering the goods. Lack of coordination was another shortcoming in the previous supply chain model. Failure to regulate transportation led to high costs for multiple transatlantic flights and shipments that could have been avoided. There was also an absence of transparency about who was sending what, and also to which locations.

Roles of IT in the new Red Cross supply chain

In transaction processing, technology had helped in hastening the transmission of information. The system maintains country and disaster data for the regional units, so they can intelligently pre-position supplies. Core business processed are accomplished through digital networks. Upon hearing of a disaster, staff will promptly input and estimate the key requirements based on the type of disaster and the location. The system can aggregate the items needed and generate the mobilization table. Requirements for goods are then processed and expressed in a mobilization table, and donors may provide money to purchase the goods or they may provide the goods themselves.

With technology, the system became more flexible and adaptable. The procurement and mobilization can first get started by the logisticians, while the field staffs are analysing the actual project requirements. Each types of disasters would entail different sets of aids. For example, an earthquake in a cold mountainous area will probably require winterised tents and field hospitals, whereas on the other hand flooding in the tropics would call for hygiene kits and water purification for disease control. This allowed greater flexibility as the system is able to differentiate the various needs and assign aid accordingly.

The new technology has also enabled enhanced order tracking and delivery coordination. HLS incorporates tables for tracking shipping information on the cloud, and it can generate records like shipping documents, receipts for goods, and reports on where items in the pipeline are currently located and where they can be expected to be. During the Tsunami that happened in South East Asia in 2004, the management of IFRC had the ability to measure the supply chain from needs to delivery for the very first time. They could establish the specific date on which a community need was identified and track when the goods were supplied to meet that need.

Other elements of the new Red Cross supply chain

IFRC decided to newly establish 3 regional logistics units in Dubai, Kuala Lumpur and Panama, in an effort to revamp its downstream supply chain into a decentralised model. These units pre-position supplies in warehouses for the most common disasters in their areas, so they ensure timely support during the initial phases of operations since the units are nearby.

IFRC also has a new development called Trace the Face, which offers a cloud people finding and reporting service called the Safe and Well Website. It is a database in which refugees can report that they are safe and well, or search for a loved one amidst the chaos. This helps to alleviate the psychological stress it could cause.

For procurement, the software helps manage upstream supplier relationships by tracking agreements and requests for bids, as well as generating standard purchase orders, invoices and production reports. Significant business relationships are digitally enabled and mediated. Procurement is able to access real-time information that they would typically have to request from their supplier. Intimacy with suppliers allows them to provide vital inputs which lowers costs.

Business results for the Red Cross

IFRC has stated that HLS has helped to improve their response time by 30%. Although glitches occurred, after the earthquake that happened in Indonesia, the supply chain was in motion in just three days, less than a third of the time it took IFRC to mobilize for the earthquake in Pakistan the previous year. This increased timeliness of information for decision-makers at headquarters and in the field.

Operations were also much more cost-effective, an estimation that it reduced cost by half. They had reduced inventory transportation and warehousing costs of operating on a global scale. They had revised their distribution system so that the more essential supplies were held near the more probable disaster locations. This revision allowed the goods to be dispatched by road or sea, instead of it coming from overseas which has more costly freight costs. It led to a dramatic reduction in costs for supplying assistance packages and was recognized with the European Supply Chain Excellence Award5 in 2006 and were the overall winner for all sectors in that year.

The software also manages appeals to potential donors, helping to avoid the duplication that plagued earlier efforts. Donors are also a crucial part in IFRC in order for them to even make the aids operations possible, and this led to improved decision makings. The requirements are appealed for, asking donors to support the activities of the agency. After reading an analysis of the data held within HLS, below is a table of figures from various operations after implementing HLS.

Complimentary assets

Complementary assets are those assets vital to derive value from a primary investment, in this case the technology IFRC applied to their organization. In order to obtain a greater value from their IT investments, they must rely on accompanying structures too.

For organisational assets, a supportive culture in the company that values efficiency and effectiveness can make a difference. It engages every individual in the company. This will encourage everyone to achieve better results and fulfil their potential. Productivity levels will rise and so will the company. At the end, it is people who are the final frontier.

Decentralised authority is also another important factor - under decentralisation every employee engaged at various levels will be included some share in the authority. Decentralisation boost a much more effective control on the operations of a company too, as employees get a closer control of their movements and are more motivated to do better. In critical situations, when time is the essence, they will be able to make their own efficient judgements.

A type of managerial assets that IFRC should have is having good teamwork and collaborative work environments. Having cohesion is a crucial branch off of teamwork within a company. When disaster strikes and people are dispatched to the fore line to help, a team with chemistry and trust with one another will definitely produce better outcomes.

The most important complimentary asset that IFRC needs is social assets like having an IT-enriched educational curriculum, improving their employees’ knowledge and raising computer literacy. In this current world where technology is taking leaps by days, it is essential to keep up and have the expertise to use it. Without the awareness to use HLS, it is impossible to achieve any of the above mentioned.

Conclusion

HLS is a web-based system, which provides a capability to disperse activities in the business process to regions of the world closer to requirements. This provided IFRC many new advantages in terms of cost, speed and local adaptability.

Over the several years of using HLS, the value of the system and the upgraded robust supply chain processes became more noticeable to all stakeholders, when other organizations were challenged by the ramifications of the operation. Improving alongside with technology, IFRC continues to have the competitive advantage and be the leading organization to provide aid whenever the disaster strikes.