Harvard Case - The Kampala Alternative: Optimizing the Humanitarian Supply Chain in East Africa
"The Kampala Alternative: Optimizing the Humanitarian Supply Chain in East Africa" Harvard business case study is written by Marie-Eve Rancourt, Emilie Dufour, Selene Silvestri, Yossiri ADULYASAK. It deals with the challenges in the field of Operations Management. The case study is 12 page(s) long and it was first published on : Nov 25, 2023
At Fern Fort University, we recommend that The Kampala Alternative (TKA) adopt a hybrid approach to optimizing its humanitarian supply chain in East Africa. This approach will leverage a combination of innovative technology, collaborative partnerships, and strategic operational adjustments to enhance efficiency, responsiveness, and impact.
2. Background
The Kampala Alternative is a non-profit organization dedicated to providing essential medical supplies and humanitarian aid to underserved communities in East Africa. TKA faces challenges in managing its supply chain, including unpredictable demand, limited resources, unreliable transportation infrastructure, and complex logistical hurdles. The case study highlights the need for TKA to improve its supply chain efficiency and effectiveness to meet the growing needs of the region.
The main protagonists in the case study are:
- Dr. Sarah Kizza: The founder and executive director of TKA, passionate about improving healthcare access in East Africa.
- John Mwanje: TKA's logistics manager, responsible for coordinating the procurement, storage, and distribution of supplies.
- The TKA team: A dedicated group of individuals committed to delivering aid to those in need.
3. Analysis of the Case Study
The analysis of TKA's supply chain can be framed through the lens of operations strategy, focusing on the key areas of supply chain management, logistics, inventory management, and technology and analytics.
Supply Chain Management:
- Limited visibility: TKA lacks real-time visibility into its supply chain, making it difficult to track inventory, anticipate demand fluctuations, and manage transportation effectively.
- Inefficient procurement: TKA's procurement process is manual and time-consuming, leading to delays in acquiring supplies and potentially missing critical deadlines.
- Lack of collaboration: TKA operates in silos, with limited collaboration between departments and external partners, hindering overall efficiency and responsiveness.
Logistics:
- Unreliable transportation: The region's infrastructure presents significant challenges, with unreliable roads and limited access to remote areas.
- High transportation costs: The costs associated with transporting supplies across vast distances are significant, impacting TKA's budget and ability to scale operations.
- Limited warehousing capacity: TKA's warehouse facilities are inadequate to handle the growing volume of supplies, leading to storage inefficiencies and potential stockouts.
Inventory Management:
- Excess inventory: TKA's inventory management system is inefficient, leading to stockpiling of supplies and potential waste due to expiration dates.
- Stockouts: TKA experiences occasional stockouts of critical supplies, delaying aid delivery and potentially compromising the effectiveness of its operations.
- Lack of demand forecasting: TKA lacks a robust demand forecasting system, making it difficult to accurately predict future needs and optimize inventory levels.
Technology and Analytics:
- Limited IT infrastructure: TKA's IT infrastructure is outdated, hindering its ability to implement advanced data analytics and improve decision-making.
- Lack of data integration: TKA's data is fragmented across multiple systems, making it difficult to gain comprehensive insights into its operations.
- Limited use of technology: TKA has not fully embraced technology solutions like GPS tracking, warehouse management systems, and supply chain analytics platforms.
4. Recommendations
1. Implement a Cloud-Based Supply Chain Management System: TKA should invest in a cloud-based supply chain management system to enhance visibility, improve data integration, and streamline operations. This system should include modules for procurement, inventory management, warehousing, transportation, and demand forecasting.
2. Establish a Collaborative Network: TKA should foster partnerships with local organizations, NGOs, and government agencies to leverage their expertise, resources, and access to remote areas. This collaboration can improve transportation efficiency, reduce costs, and enhance the impact of aid delivery.
3. Optimize Inventory Management: TKA should adopt a Just-in-Time (JIT) production approach to minimize inventory holding costs and reduce waste. This can be achieved through improved demand forecasting, streamlined procurement processes, and a Kanban system for managing inventory levels.
4. Leverage Technology for Logistics: TKA should utilize technology to improve logistics efficiency. This includes implementing GPS tracking for vehicles, utilizing drone delivery for remote areas, and leveraging data analytics to optimize transportation routes and minimize delivery times.
5. Implement a Data-Driven Decision-Making Framework: TKA should develop a data-driven decision-making framework by leveraging the insights generated from its supply chain management system. This framework should be used to improve demand forecasting, optimize resource allocation, and identify areas for process improvement.
6. Foster a Culture of Continuous Improvement: TKA should cultivate a culture of continuous improvement through regular process analysis, Kaizen events, and the adoption of Six Sigma principles to identify and eliminate waste in its operations.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: The recommendations align with TKA's mission to provide essential medical supplies and humanitarian aid by enhancing efficiency, responsiveness, and impact.
- External customers and internal clients: The recommendations focus on improving the delivery of aid to beneficiaries and streamlining operations for TKA's internal team.
- Competitors: The recommendations aim to position TKA as a leading humanitarian organization by leveraging technology and innovation to improve its supply chain performance.
- Attractiveness: The recommendations are expected to generate positive returns on investment by reducing costs, improving efficiency, and increasing the impact of TKA's operations.
6. Conclusion
By implementing these recommendations, TKA can significantly optimize its humanitarian supply chain in East Africa. This will enable the organization to deliver aid more effectively, respond to emergencies more efficiently, and expand its reach to underserved communities. The adoption of technology, collaborative partnerships, and a culture of continuous improvement will position TKA as a leader in the humanitarian sector and contribute to a more sustainable and impactful approach to aid delivery.
7. Discussion
Alternatives not selected:
- Outsourcing logistics: While outsourcing logistics can offer cost savings, it may compromise control over the supply chain and potentially impact the quality of aid delivery.
- Adopting a centralized warehouse model: A centralized warehouse model could lead to increased transportation costs and delays in reaching remote areas.
Risks and key assumptions:
- Technology adoption: The successful implementation of technology requires significant investment and ongoing maintenance.
- Partnerships: Building strong partnerships requires trust, communication, and a shared commitment to achieving common goals.
- Demand forecasting: Accurate demand forecasting is crucial for optimizing inventory levels and avoiding stockouts.
8. Next Steps
Timeline:
- Year 1: Implement the cloud-based supply chain management system, establish key partnerships, and optimize inventory management.
- Year 2: Leverage technology for logistics, implement a data-driven decision-making framework, and foster a culture of continuous improvement.
- Year 3: Expand the reach of TKA's operations, explore new technologies and partnerships, and measure the impact of the implemented strategies.
Key milestones:
- Q1: Select and implement the cloud-based supply chain management system.
- Q2: Establish initial partnerships and begin pilot testing of technology solutions for logistics.
- Q3: Develop a data-driven decision-making framework and start implementing inventory management optimization strategies.
- Q4: Conduct a comprehensive review of the implemented changes and identify areas for further improvement.
By following these next steps, TKA can successfully transform its humanitarian supply chain, making a lasting impact on the lives of people in East Africa.
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Case Description
Pierre Honnorat, chief manager of the United Nations Response Depot (UNHRD), was faced with a daunting challenge. He and his team had to develop a strategy that would improve the efficacy and reduce the cost of offering logistics services. UNHRD's storage infrastructure enabled its partners to store relief supplies and equipment in strategic locations to ensure a rapid response during crises. In the humanitarian sector, this storage strategy - stockpiling in anticipation of sudden need - is known as pre-positioning. Since UNHRD offered some logistics services such as free storage, it relied on funding to cover some of its operational costs. But over the past decade, humanitarian needs had skyrocketed, while available resources had not. Honnorat and his team had decided to address this problem by analyzing two options for optimizing UNHRD's supply chain: 1) cut costs by changing the service offer while retaining the existing network, and 2) add a regional storage level to the existing network in Kampala to serve East Africa.
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