On Saturday 13 January 2001, an earthquake occurred in El Salvador at 11:33AM local time. Although natural disasters are nothing new in El Salvador, it remains very vulnerable with one of the highest population densities in the world and half its people living in urban areas. Extreme poverty, political unrest and the effects of a violent 12-year civil war made relief operations more complicated than was customary with such natural phenomena, stirring factions and exacerbating tensions. The earthquake, measuring 7.6 on the Richter Scale, affected a wide swathe of territory, wiping out entire neighborhoods and roads. There was no time to waste.
This case, Coordinating Disaster Logistics after El Salvadors Earthquakes using SUMAs Humanitarian Supply Management System, written by Rolando M. Tomasini, Research Associate, and Luk N. Van Wassenhove, the Henry Ford Chaired Professor in Manufacturing at INSEAD, looks in detail at the internal dynamics and logistics of the disaster rescue and relief project.
Among the earthquakes many immediate victims was the national emergency relief agency (COEN), which lost its headquarters and was forced to relocate. The magnitude of the disaster did not escape the international community, and within hours the first planes arrived with donations, to be followed by hundreds more over the next few months. While the generous support was appreciated it required a logistics operation on a scale parallel to the magnitude of the damage. For this purpose, COEN made a regional disaster agreement with FUNDESUMA, a Costa Rican non-profit organisation experienced in this type of operation, which would provide transparency and accountability and was supported by the Pan-American Health Organization (PAHO). Within a day, experts had already deployed the supply management system (SUMA) to track all incoming donations, standardize storage and handling, and facilitate the distribution with inventory reports and needs assessments.
President Francisco Flores Perez of the ruling ARENA party created CONASOL (National Committee for Solidarity), a private sector committee composed of members of the Association of Private Enterprises to strengthen relief efforts. However, its mission did overlap with the work of COEN and FUNDESUMA. While their business knowledge and capabilities were appreciated, the parties had to find a way to work together without duplication of efforts. Eventually, CONASOL did what the private sector does best it picked up the fundraising activities and the purchase of relief items. While productive and beneficial, many found the partnership inadequate as most members of the committee and the private sector were members of the ruling class and party.
In the midst of numerous aftershocks, exactly one month after the first earthquake, the people of El Salvador were awakened at 8:22AM by a second earthquake of 6.6 on the Richter Scale. What could be done better the second time around? What was the role of SUMA in the middle of this complex political situation? Was the situation handled well and was the technology managed optimally? Did SUMAs presence in the field during the second earthquake help to improve the disaster response?
The case illustrates the benefits of using a humanitarian supply management system like SUMA by describing the process of setting up the system to register and track the different disaster relief supply chains. It highlights the value of reports generated for accountability and visibility in a highly complex and political environment. It also reviews the importance of building local capacity through training experts, the military, and volunteers to respond quickly to disasters. It is suitable to teach logistics and supply chain management to MBA students, managers and senior executives.