Preparing for the Unknown - International Federation of Red Cross and Red Crescent

Disaster response organisations like the International Federation of Red Cross and Red Crescent Societies (IFRC) act as choreographers in a huge show involving countless characters (governments, media, NGOs, donor National Societies, affected communities) and materials (food, clothing, medicine, trucks, tents, blankets). When done well, the right aid gets to the right people at the right time. When done poorly, confusion and chaos prevail. During 1998’s Hurricane Mitch, the worst to hit the Gulf of Mexico in 200 years, the latter seems to have won out. Unsatisfied by IFRC’s response, its customers (donor National Societies) demanded action. In this case, Professors Van Wassenhove, Kumar, and Becerra-Fernandez, along with Ramina Samii, take us through the group’s post-Mitch self-evaluation and its ensuing restructuring process, drawing parallels that can be applied to the business community.

by Luk Van Wassenhove, Irma Becerra-Fernandez,Kuldeep Kumar,Ramina Samii
Last Updated: 23 Jul 2013

Imagine the logistics involved in planning an event like the Olympics. Now imagine planning the same event but not knowing when or where it will take place, how many spectators will attend, and how many athletes will compete. The near impossibility of this task gives some insight into what disaster management organisations must contend with. These organisations are specialists in preparing for and responding to crises. But sometimes even those doing the helping need help.

In this case, Professor Luk N. Van Wassenhove, the Henry Ford Chaired Professor of Manufacturing at INSEAD, and Research Associate Ramina Samii, along with Kuldeep Kumar, the Ryder Eminent Scholar and Professor of Information Systems, and Irma Becerra-Fernandez, Assistant Professor of Decision Sciences and Information Systems at Florida International University, introduce us to the International Federation of Red Cross and Red Crescent Societies (IFRC), the world’s largest humanitarian organisation which helps some 30 million people annually. In the wake of 1998’s Hurricane Mitch, the worst to hit the Gulf of Mexico in 200 years, the IFRC was widely criticised for it handling of the disaster. Critics charged that it responded too slowly, and that weeks went by before it was able to mobilise and distribute food, water, and shelter to the local population.

The IFRC took these criticisms to heart and decided it needed to find a way to avoid being caught off guard again. A pro bono study conducted by McKinsey in 2000 looked at the role, activities, and structure of the organisation and led to significant organisational changes. The outcome was to initiate a new regional response approach, accompanied by a policy to build preparedness activities on five pillars: human resources, knowledge management, operations and process management, financial resources, and the community.

This new, clear focus on preparedness would be key to the group’s ability to respond better. As IFRC’s head of logistics and resource mobilisation department commented, “It is easy to find resources to respond, it is hard to find resources to be more ready to respond.” At the end of the day, the study of disaster management covers a broad spectrum, from prevention to logistics on the scene of the disaster, to the redevelopment that takes place afterwards. Professor Van Wassenhove is convinced that organisations like IFRC can benefit from the know-how found in research and education institutes like INSEAD, while business executives can learn from how humanitarian aid organizations deal with some aspects of their hyper-dynamic supply chains.

“I honestly believe we can transfer a lot of our know-how of business supply chain management to improve disaster preparedness and response,” Professor Van Wassenhove says. “But conversely, I have found that business executives recognize many of their current supply chain challenges in the descriptions of disaster intervention situations.”

This case, with its accompanying teaching note, can be used to discuss logistics in production and operations management courses as well as supply chain management. It also can be used in the context of a non-profit management course.

INSEAD 2002

Luk Van Wassenhove, Irma Becerra-Fernandez,Kuldeep Kumar,Ramina Samii recommends

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