Humanitarian Organizations Showed Flexibility, Grit During COVID Supply Chain Disruptions

When the COVID-19 pandemic hit, it sent shock waves across global supply chains. But manufacturers and other businesses weren’t the only ones hit hard: local and international aid organizations, tasked with providing humanitarian assistance during times of crisis, suddenly had a major crisis of their own. How would they get the supplies they needed to carry out their crucial work?

According to a new study by the UBC Sauder School of Business, the organizations showed remarkable nimbleness and ingenuity — and while the pandemic was an unusual event, their approaches can provide powerful insights for businesses and non-profits facing adversity.

For the study, the research team interviewed 15 supply chain and logistics managers, field coordinators and supply chain specialists working in large humanitarian organizations including the World Health Organization, UNICEF, Doctors Without Borders and CARE International, as well as smaller, more local, non-profits. Some were focused on emergency response, while others prioritized long-term aid. The team also gathered data from secondary sources such as company websites, news databases and standard operating procedures.

The researchers found that when COVID arrived, the non-profits experienced the same spike in demand for medications, PPE and other pandemic-related supplies as for-profit operations while working in already highly challenging environments.

“Suddenly humanitarian organizations needed PPE for all of their employees instead of just nurses and doctors,” explains UBC Sauder School lecturer and study co-author Samuel Roscoe, who previously worked in the aid sector. The provision of mental health support also abruptly ended in many areas, and supply to feeding centres was disrupted.

“If you’re delivering aid to an internally displaced persons camp where you already have malaria, cholera and all of these other communicable diseases, and then all of a sudden COVID comes along, it becomes almost impossible to operate or deliver medical assistance.”

The different types of organizations responded differently to supply chain shocks. Long-term development organizations — especially those with ties to international bodies such as the UN, the World Bank and the IMF — were able to source from multiple suppliers and create backup arrangements. And rather than send bids out to tender, they focused on the handful of suppliers that were capable of fulfilling orders and secured long-term contracts.

“So if they contacted a supplier of PPE they would say, ‘We plan to purchase X amount of products from you, and we want you to commit that you'll provide them,” says Roscoe. “It meant they were locked into these suppliers, and they had a regular supply even during 2020 and 2021 when a lot of organizations didn't. So that was a big advantage.”

Some organizations found themselves tangled in donor contracts, where private donors or governments had earmarked funds to a particular disaster, so they couldn’t allocate those funds to their COVID response. “All of a sudden they had to go back to donors and say, ‘Are you ok if we use 20 or 30 per cent of your budget to buy PPE or administer vaccines?’” says Roscoe. “So that created a lot of delays in their response. Some even had to renegotiate contracts.”

Air travel was disrupted and the price of shipping containers and other forms of long-distance transport skyrocketed, so instead of purchasing items in Europe and then shipping to the Middle East or Africa, many organizations began buying from local grocery stores or regional warehouses or distributors.

“There were many logistical challenges, but they found they could continue to deliver aid by using local suppliers — and that worked as an emergency response because they could find the products they needed,” explains Roscoe. “It wasn't always enough, so it did create some shortages. But that was one of their big pivots.”

Non-profits that were the most flexible in their organizational structures and had more decentralized decision-making fared better, adds Roscoe, because employees could make important decisions without going through layers of management. Similarly, groups that were in communication with volunteers and communities on the ground were better able to meet the needs of those they were serving.

Organizations that had good relationships with national or regional governments were also better able to function during the pandemic. For example, UN organizations were able to continue delivering aid during lockdowns, whereas Doctors Without Borders, which purposefully distances itself from authorities, had more trouble getting permission to travel or go into displaced person camps.

The study is the first of its kind to look at how aid organizations operate during co-occurring crises, such as wars, natural disasters and a pandemic.

While the findings are instructive for the non-profit sector, Roscoe says they’re also relevant to for-profit businesses. The study provides a roadmap on how to build the dynamic capabilities that business leaders need to compete in uncertain operating environments.

“These organizations are designed around providing aid in difficult situations, and when their situation got even more difficult, they still found ways to cope, whereas a lot of businesses that aren’t designed for flexibility and responsiveness struggled,” says Roscoe.

“If your organization is built around responsiveness and flexibility, it will be better able to withstand any degree of crisis, whether it’s a low-level crisis like a supplier shutting down or a major crisis like a pandemic, and your people will find a way to adapt and adjust much more quickly.”

Source: UBC Sauder School of Business

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