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Procedía Engineering 159 (2016) 12-18
Procedía Engineering
www.elsevier.com/locate/procedia
Humanitarian Technology: Science, Systems and Global Impact 2016, HumTech2016, 7-9 June 2016,
Massachusetts, USA
Supply chain optimization: enhancing end-to-end visibility
Beverley Sithole*, Sergio Guedes Silva, Mirjana Kavelj
United Nations World Food Programme, Via Cesare Giulio Viola 68/70, Rome - 00148, Italy
Abstract
This paper describes the United Nations World Food Programme's (WFP) Supply Chain Management Dashboard (SCM-D), a tool that increases operational efficiencies and effectiveness by enhancing Supply Chain (SC) visibility. Each year WFP assists an average of 80 million people across more than 80 countries. It is therefore critical for WFP to understand what processes are taking place at each stage of its global Supply Chain to allow for timely mitigation of risks, forward and contingency planning and optimization, as well as identification and propagation of best practices. The SCM-D provides this end-to-end visibility into the WFP Supply Chain, serving as a "one stop" holistic overview that condenses the SC situation for an operation. The SCM-D promotes integrated Supply Chain Management by facilitating collaboration amongst different business units and supporting better informed Executive Management decision making. An online platform applies the efficiency and effectiveness gains of the tool to all WFP operations, and makes the SCM-D accessible to staff anywhere and at any time. Simplicity is key to the design, with the information reflected on the SCM-D being detailed enough to allow for comprehensive understanding of an operation and identification of risks, challenges and opportunities; yet broad enough to provide a clear and integrated end-to-end SC picture. The tool increases operational transparency and efficiency, value for money of funds, and ultimately supports the delivery of critical food assistance to millions of vulnerable families. All of these gains bring WFP one step closer to achieving its goal of a world with Zero Hunger.
© 2016 Publishedby ElsevierLtd. Thisis anopen access article under the CC BY-NC-ND license (http://creativecommons.Org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of the Organizing Committee of HumTech2016 Keywords: Supply Chain Management; Dashboard; Optimization; Humanitarian Response; World Food Programme
1. Introduction
A rise in Humanitarian Assistance in recent years has been precipitated by an increase in natural disasters, disease outbreak, and conflict [1]. According to the Index for Risk Management (INFORM), 48 countries with a total population of 3.3 billion were rated "very high risk" in 2014 [3]. In response to this unprecedented challenge the United Nations Coordinated Appeals for humanitarian assistance for the year totaled US$19.5 billion, 6.3 billion (48%) more than in 2013 [1]. This percentage remained consistent in 2015, with only 52% of the Coordinated Appeals needs being met [7].
Not only has the number of people in need of humanitarian assistance grown over the years; the geographical and economic scope of humanitarian needs have shifted. The number of displaced people in Middle Income Countries now exceeds that in Low Income Countries, as does the number of displaced people in the Middle East compared to Africa [1, 4]. This evolution necessitates dynamism in the way humanitarians responds to crises.
The 2030 Sustainable Development Goals, adopted in September 2015, recognize that we cannot achieve a world of safety and dignity for all without addressing the needs of the nearly 795 million hungry people in the world, particularly the 125 million people affected by humanitarian crises [8, 11]. The World Food Programme (WFP) is the frontline UN agency fighting hunger worldwide and is fully committed to this vision.
WFP is voluntarily funded and is responsible for providing food assistance to save lives during emergencies such as natural and man-made disasters, as well as to assist communities rebuild following these emergencies. In 2014 WFP championed the
* Corresponding author. Tel.: +39-06-65131; Fax: +39-066-590-632 E-mail address: beverley.sithole@wfp.org / beverley.sithole@gmail.com
1877-7058 © 2016 Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.Org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of the Organizing Committee of HumTech2016
doi:10.1016/j.proeng.2016.08.058
Zero Hunger Challenge launched by UN Secretary-General Ban Ki-moon to "end hunger, eliminate the worst forms of malnutrition and build inclusive and sustainable food systems in our lifetimes" [9].
To achieve this aim resources need to be used effectively and value for money maximized. WFP is embracing technology and innovation to optimize its efficiencies and better serve those in need. Limitations in humanitarian sector funding places a strong preference on core operations aimed at immediate responses to "saving people's lives", the result of which is limited financing for innovations [14]. This constraint has resulted in a need for WFP to maximize the added value of any of its innovative pursuits.
2. WFP's Supply Chain
2.1. Overview
With a strong field presence in over 75 countries and more than 50 years of expertise in procurement and logistics, WFP is a crucial partner for Governments, the private sector, humanitarian organizations and development agencies alike. WFP's Supply Chain supports actors working to achieve the 2030 Agenda for Sustainable Development, be it a national disaster management authority, a humanitarian partner, an agribusiness, or a collective of 20,000 smallholder farmers. This is done via common supply chain services worth over US$3 billion per year.
The common supply chain services provided by WFP enable the humanitarian community to deliver assistance in a more coherent, cost and time-effective way. By leveraging economies of scale WFP reduces expenditures arising from humanitarian needs via consolidated large-scale purchases of food and transport services. In turn partners benefit from supply chain efficiencies and operational savings, maximizing the relative utility of donor funds.
In 2014 the organization reached 80 million people in 82 countries, distributing 3.2 million metric tons of food purchased from 92 countries. US$5.38 billion in donations was received and WFP partnered with 1,122 NGOs to enhance service delivery to those in need. To achieve this feat, WFP operated an average of 5,000 trucks, 70 aircraft, and 20 ships on any given day [ 10].
WFP and its cooperating partners reach targeted beneficiaries via two transfer modalities: Food and Cash Based Transfers (CBT):
• Food may be procured locally or internationally. Donations may also be received in kind (food) [12].
• CBTs are made up of Cash and Voucher components. Cash includes transfer of physical currency to beneficiaries on the ground, or remotely debiting bank accounts, mobile money accounts, and prepaid cards. Vouchers come as paper vouchers or electronic vouchers (plastic cards which can be reloaded remotely). These vouchers can be exchanged at partner retailers for the commodities stipulated on the voucher [12].
Supply Chain Management (SCM) at WFP is an end-to-end process covering all functions and sub-processes starting with planning, followed by sourcing, and all the way to delivery for both food and CBT. SCM functions tie into WFP's programme design and mobilization of resources upstream; and implementation of programmes, monitoring, and evaluation downstream. WFP's core supply chain functions include:
• Planning: demand and funds forecasting, sourcing and delivery planning
• Sourcing: procurement of commodities and supply chain services Delivering: transportation, storage and distribution of food assistance
These functions run across WFP's SC units in Country Offices, Regional Bureaus, and Rome Headquarters, necessitating an integrated end-to-end Supply Chain approach that is not limited to any organizational area.
Figure 1 provides an overview of WFP's high level 'hybrid' (food and CBT) SC process based on the Supply Chain Operations Reference (SCOR) model, including the main linkages with other corporate processes. Upstream functions for global operations are managed centrally at Headquarters in Rome. Downstream functions are decentralized to the Country Offices, with first line support and oversight provided by Regional Bureaus.
In order to serve 80 million beneficiaries, WFP's SC strives to become more efficient and effective while being agile, flexible and adaptive [10, 12]. The organization's mandate to save lives during emergencies, its use of multiple transfer modalities, as well as its global reach make for a complex Supply Chain. Emergency responses are often characterized by unpredictable demand and funding, SC parameters that constantly evolve, and infrastructure and security challenges. All of these complexities necessitate visibility into WFP's SC.
2.2. Importance of Supply Chain Visibility
Enhanced SC visibility is necessary to manage the current scope and complexity of WFP's SC. Understanding what processes are taking place at every stage of the Supply Chain allows for mitigation of risks, forward and contingency planning and optimization, and identification and propagation of best practices. This enables WFP to determine existing efficiencies and identify opportunities to optimize time, cost, and service quality [2].
Given the funding constraints characteristic of the humanitarian sector in recent years, WFP places importance on increasing
the relative utility of each dollar of donor funds and maximizing value for money [1]. The Supply Chain Management Dashboard (SCM-D) is one of the tools utilized to achieve this goal via enhanced SC visibility and subsequent optimization.
Fig. 1. Summary Overview of WFP's Supply Chain Management Process.
3. Enhancing End-to-End Visibility Part 1 - Supply Chain Management Dashboard Description and Findings
3.1. The purpose of the Supply Chain Management Dashboard
The Supply Chain Management Dashboard (SCM-D) is an internally developed integrated Supply Chain Management tool that aggregates information from WFP Country Offices and business units such as Programme, Budgeting and Allocation, Donor Relations, Procurement, and Logistics. The SCM-D sets out to:
Provide end-to-end SC analysis and visibility into operations
• Provides a "one-stop" holistic overview of key information via a single analysis. Information presented includes an overview of the operation, funding, requirements and shortfalls, procurement, transportation, stock amounts and locations, as well as strategies to address challenges (Section 3.2)
• Analyses focus on essential information and are presented to provide an easy understanding of the SC situation
Identify risks, challenges, & opportunities
• Highlights potential future shortfalls and operational challenges
• Suggests options available within WFP to address these concerns
• Planning around these risks allows for enhanced service delivery and improved SC efficiencies Promote integrated Supply Chain Management
• The SCM Dashboard represents not only a tool, but also an approach and methodology that leads to concrete SC collaboration
• Key SC stakeholders provide inputs for the SCM-D, jointly discuss it, and together propose solutions to SC challenges and strategies for enhanced efficiency and effectiveness
• Information on the SCM-D allows for better informed Executive Management decision making
Fig. 2. Illustrative Example of the "Operation Overview" and "Requirements vs. Supply" Dashboard Sections.
3.2. Elements of the Supply Chain Management Dashboard
The SCM-D is made up of 9 sections, all of which combined provide a holistic SC picture that allows for integrated and informed decision making.
Section 1: Operation Overview
Summarizes the humanitarian picture in a target location, drawing attention to some key project information such as the targeted beneficiaries, emergency designation of the project, the length of the project, and the transfer modalities utilized (Figure 2).
Section 2: Highlights
Serves as the Executive Summary of the SCM-D, communicating information critical to a user gaining a good understanding of a project's SC. Key takeaways regarding shortfalls, funding, and sourcing options are listed. Main supply chain challenges and constraints are discusses and, where available, risk mitigation solutions provided.
Section 3: Funding
Details a project's finances, comparing requirements with shortfalls. Funding availability is also outlined including:
• Confirmed contributions from donors
• Unprogrammed funds - money reserved for an operation but has not been used
• Advance Financing availability - WFP's internal loan mechanism that furnishes a project with money ahead of transfer of funds by donors, facilitating quicker responses to emergencies (maximizes use of resources). Money "owed" by a project to WFP (Outstanding Advance Financing) is also listed.
Section 4: Requirements vs. Supply
Compares project requirements with available resources, providing insight into shortfalls (Fig. 2). The actual quantities transferred and the number of beneficiaries reached are tracked, providing users with a retrospective view on the utilization of resources. Information is divided into the two WFP transfer modalities - Food and Cash Based Transfers (CBT).
Section 5: Food Supply
Provides details on the Food transfer modality, outlining the list of commodities in an operation's food basket. Shortfalls are shown by commodity, with suggestions made to cover these shortfalls. The supply stage of commodities is also explained.
Section 6: Cash Based Transfers (CBT) Supply
Explains the CBT transfer modality in depth, segregating information by cash and vouchers. Any challenges associated with CBT are explained, and solutions suggested.
Section 7: Food in the Region
Details commodities available in neighboring countries. Where a neighboring country's project's immediate requirements are covered and excess stock is available, an operation may "borrow" said commodities to cover immediate needs and replenish the supply at a later date.
Section 8: Global Commodity Management Facility (GCMF)
The Global Commodity Management Facility (GCMF) is an internal WFP mechanism to "purchase and pre-position food stocks globally" based on aggregate demand and resource projections, thereby reducing overall lead times [5].
Section 9: Sourcing and Delivery Plan
Suggests actionable strategies to solve the challenges and constraints listed in the first 8 sections, allowing WFP to minimize the disruption of service to beneficiaries. Planning analyses include consideration of regional stock, GCMF and local and international purchases; funding availability serves as a constraint
3.3. Applications of the Supply Chain Management Dashboard
Simplicity is key to the SCM-D's design. Although not exhaustive the information reflected on the SCM-D aims to provide enough detail to allow for comprehensive understanding of an operation and identification of risks, challenges and opportunities; whilst being broad enough to provide a clear and integrated end-to-end SC picture. Graphical representations are leveraged to communicate information in a concise way and illustrate relevant trends and relationships. A process of continuous improvement is applied to maximize the tool's usefulness to target users.
The current form of the SCM-D is a PowerPoint presentation which includes Excel graphs and tables. Automation of the tool is underway (Section 4). The SCM-D was first used for the Sahel crisis in 2012 where visibility into the SC allowed for better informed decision making by Executive Management, increased responsiveness to a dynamic emergency situation, and enhanced service delivery to beneficiaries. These proven advantages resulted in extension of the use of the SCM-D to all L3 operations ("the global humanitarian system's classification for the response to the most severe, large-scale humanitarian crises" [6]). This includes the Central African Republic and Cameroon, Iraq, Philippines, South Sudan, Syria, West Africa Ebola Outbreak, and Yemen. In addition to service delivery and visibility benefits, cross-unit collaboration led to significant cost savings and reduction in lead times across these operations.
3.4. Impact of the Supply Chain Management Dashboard
The Syria operation will be used as an example to demonstrate the impact of the SCM-D. WFP has been responding to the current Syrian emergency since November 2011, initially providing food assistance to 50,000 individuals and scaling up to 4.25 million target beneficiaries per month. Distribution is carried out via food parcels that contain nine food items for a one-month supply to a five-member household. In 2013 WFP started providing nutritional support to children under 5 years, and in 2014 introduced early recovery activities including school feeding programmes and targeted nutrition for pregnant and nursing women [10].
The SCM-D was introduced to the Syria operation in 2013 and has enabled WFP to take a 'proactive and integrated planning approach' to the operation. This led to overall better integration of end-to-end SC functions (procurement, ocean shipping, land transport and warehousing) coordinated through the Supply Chain Management Working Group (SCM-WG) that brings together the Directors of WFP's core supply chain functions. This integrated plan based approach, coordinated by the SCM-WG, has over the years allowed WFP to optimize food baskets, establish longer term agreements with suppliers, optimize delivery networks, and maximize the use of limited resources. All of these gains translated into significant operational cost reduction, a decrease in SC lead times, and most importantly enhanced service provision to beneficiaries.
4. Enhancing End-to-End Visibility Part 2 - Automated Dashboard
4.1. Increasing the Scope of the Supply Chain Management Dashboard
The manual SCM-D has demonstrated that SC visibility allows for better informed decision making and enhanced operational efficiency. However the human input intensive nature of the manual SCM-D and human capital constraints limited the use of the SCM-D outside of L3 emergencies. The need to extend the benefits of the tool to all WFP operations led to the inception of the SCM-D Automation project.
Currently in a pilot phase, the automated SCM-D will be available 24/7 to all WFP personnel, providing information on all active WFP operations. Data for the Dashboard will be acquired automatically from existing WFP corporate systems. A power user will undertake periodic quality control checks and input any comments that may not be tracked in a corporate system but would be useful to understanding an operation's SC picture.
The automated SCM-D will achieve the same goals as the manual SCM-D with the following added advantages:
Extends SC visibility to all WFP operations and not just L3s
• The automated nature of data extraction and visualization removes the human capacity constraint. An automated SCM-D can be accessed for all active WFP operations
Provides an online, dynamic, and real-time platform
• The SCM-D will be accessible online by all WFP employees at any time and from any location. There will be an option to download and save dashboard for later use (e.g. where internet access is not available or is unreliable)
• To cater to different focus areas and preferences of individuals, the SCM-D will have customization options where users can edit the order and form in which they view data (e.g. table vs. graph views)
Accelerates data gathering processes
• Instead of a user approaching different business units to obtain various data sets, the online SCM-D will reflect aggregate data
sets, with initial trends reflected in maps, graphs, and tables
Enhances information management and business process standardization
• An automated system needs to extract data in a pre-specified form. The automation exercise necessarily involves coordinating
with different business units to ensure that nomenclature and validation procedures are standardized across the organization
To stay up to speed with technology and the options available for accessing the internet, the tool will be optimized separately for desktop, tablet, and mobile use. The automated SCM-D will be interactive in nature. Users will be able to zoom in on map and graph details, view drilldowns on summary data, and change timelines on data visualizations. The automated SCM-D will amplify the benefits witnessed in the operations where the manual SCM-D was used, significantly enhancing visibility across the entire WFP supply chain.
4.2. Complexity of the Technological Requirements for the Automated Tool
The automated SCM-D retrieves data from 6 different systems and more than 30 different data sources. At present the SCM-D deals with more than half a million new records every day which are saved in a dashboard that analyses more than 50,000 records. The SCM-D processes more than 1,200 projects daily, with reference to more than 2,000 warehouses locations worldwide, and nearly 1,000 unique commodity prices in over 83 countries. The technological stack is composed of a custom Extract, Transform, and Load (ETL) system (Python), a Distributed Task Queue to manage asyncronus tasks, a knockout for Web 2.0 User Interface, a post Geographical Information System (GIS) as a geographical database, and a rich REST Application Program Interface (API).
One of the biggest challenges in building the tool has been to balance multiple architectures and technologies with consolidating copious amounts of data in creating an interactive visual experience. To address this challenge the system has been decoupled into 4 different subsystems. Each subsystem has been designed to support the use of different technologies and/or programming languages. Subsystems "talk" with one another using an implementation agnostic API. This allows for utilization of the best tool for each component while facilitating subsystem interchangeability (to improve performance), with no adverse effects to other parts of the application.
Another challenge faced was to develop a system that could manage millions of data fields and freeze them in a Dashboard in less than 5 seconds using sources that do not provide historical data. To manage this, a customized ETL system has been internally developed and fine-tuned. This ETL can scale horizontally and vertically. If needed it can be easily deployed to cloud architecture (e.g. Amazon Web Services).
The biggest risk to successful development of the SCM-D has been the varying frequency of data refresh cycles of the 30 data sources used by the tool. Each source was developed as a stand-alone system lacking an integration interface. In addition, over time much of the data has changed its semantics, further complicating integration algorithms.
To allow for seamless user experience, a UX has been developed using modern Web 2.0 paradigms and asynchronous calls have been introduced. The whole system is actively monitored by an error handling logger which automatically sends an email and eventually an SMS to the support team, allowing for quick identification and resolving of any issues. This also results in information logs that do not require any input from the end user.
An "open for change" design has been utilized in the SCM-D creation, allowing for a dynamic development approach that can easily adapt to new and changing requirements in a cost effective manner. This maximizes the value for money of this investment in innovation.
5. Continuous Improvement - Culture of Innovation
WFP has over the years developed innovative solutions to continuously improve the management of our global Supply Chain. These innovations encompass system development, advanced data analytics, and statistical and mathematical models. They are aimed at taking WFP's supply chain to the next level of excellence and preparing the organization for the future.
An example of a parallel project to SCM-D is one that optimizes food basket composition and logistics routes for food procurement based on mathematical models. This will allow WFP increased flexibility in planning around dynamic project needs and funding outlooks. Along with the SCM-D, the tool will further reduce SC costs and enhance service optimization.
To encourage internal efficiencies in WFP processes as well as to identify areas for improvement, Key Performance Indicators are being outlined and will eventually be tracked across the Supply Chain. In the future these indicators may be incorporated into the SCM-D to couple SC optimization with SC operational performance.
6. Conclusions
Supply Chain optimization is not a siloed process; it is one that benefits from continuous improvement in cross functional optimizations that leverage technological advances. To achieve an in-depth understanding of the SC, the SCM-D encourages and facilitates integrated Supply Chain Management while supporting information management and business process standardization. The tool increases operational transparency and efficiency, value for money of donated funds, and overall services provision to those in need. All of these outcomes bring WFP one step closer to achieving its goal of a world with Zero Hunger.
Acknowledgements
We would like to thank the WFP IT Application Development Team that is developing the automated SCM-D. Our gratitude is extended to our colleagues across WFP's global offices without whose support and collaboration these positive outcomes would not have been realized. Our thanks also go to our teammates Nils Van Wassenhove, Julia Weatherhogg, Koen Peters, and Ruth Knight who assisted in reviewing this paper. A special thank you goes to all of our donors who provided the financial support necessary to carry out this project.
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