1 feasibility study for care-shelter first apr 13, 2006 thomas choi, shao hung goh, marco gutierriz,...
TRANSCRIPT
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Feasibility Study for CARE-Shelter First
Apr 13, 2006
Thomas Choi, Shao Hung Goh, Marco Gutierriz, Randy May, Zhao Ki So, Kai Wang
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Outline Introduction CARE Shelter First Objectives Challenges Deliverables
Distribution Network for Disaster Relief Warehouse Location Model and Cost
Estimates Case Studies
Conclusions
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Relief Aid
Relief Aid can be subdivided into 2 categories:
• Humanitarian Aid• Provided on an urgent basis in
response to a humanitarian crisis• Objective is to save lives, alleviate
suffering, and maintain human dignity.• Development Aid
• Address socioeconomic factors that may have led to a crisis
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Aid Organizations• Subdivided into GOs and NGOs.
• Government organizations• Within government (USAID)• International level (United Nations)
• Non-governmental organizations• Local• International (CARE, Shelter First)• Funded by individuals, corporations, governments,
and other organizations• Some aid organizations carry out both
kinds of aid (CARE)• Some organizations specialize (Red Cross
and Shelter First, humanitarian aid)
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Humanitarian Aid Trends
• Funding and delivery increasingly being organized at an international level.
• Faster and more effective response for major emergencies.
• International NGOs becoming an increasingly effective vehicle for delivery.
• Standardization and improvement efforts• SPHERE minimum standards for disaster
response.• Although mostly qualitative, provides guidelines
for effective and efficient response.
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Humanitarian Aid NGOs – Challenges
• Funded in response to emergencies• Little, if any, funds are dedicated to
preparedness (including pre-positioning)
• Typically NGOs must wait until after emergency to source supplies. Response time is sometimes too slow causing additional deaths and sufferings
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Humanitarian Aid NGOs – Response Chain
Suppliers
Supplies purchased by NGOs
Consolidation Warehouses
Set up in response to emergency
Aid RecipientsTransport in response to emergency
Transport in response to emergency
Typical Response Chain
Suppliers
Supplies purchased by NGOs
Consolidation Warehouses
Set up in response to emergency
Aid Recipients
Response Chain with Pre-positioning
Pre-positioning Warehouses
Set up in advance of emergencyTransport in
advance to emergency
Transport in response to emergency
Transport in response to emergency
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Shelter First Concept• To provide immediate short-term shelter
to victims of natural disasters worldwide.• Purchase and pre-stage temporary
shelters at various points around the world.
• Start with a single warehouse. Expand over time to multiple locations.
• If possible, airdrop shelters directly to affected area. If not, fly shelters to closest airstrip.
• The ultimate goal is to airdrop shelters to destination within 24 hrs after a request.
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Perceived Value• Provide a vehicle for positive publicity
for the hospitality industry worldwide.• Focus on temporary shelters, as opposed
to the other so many needs that aid organizations face.
• Most importantly, reduce response time and reduce human suffering worldwide.
• Initially, reduce shelter provision response time from 2-3 wks to 5-7 days.
• Ultimately achieve 1 day response time goal.
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Shelter Design• Shelter design must meet SPHERE minimum
standards: adequate for climate, lighting, ventilation, places to store food, water
• Estimated cost of $500 per shelter.• Only standard that raises an issue is size.
• Minimum of 17.5 sqm for a 5 member family.• Might make shelter kit too large and more
expensive to transport.
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Kit Contents
• Contents should address basic needs
• Should last until other aid reaches the beneficiaries (3-4 wks)
• Minimum contents: shelter, blankets, food rations, water purification kits, first-aid kits
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Packaging Ideal Design• Estimated weight 200lbs.• Size of standard pallet.• Slots for forklifts’ forks.• Disassembled into 4
color-coded, 50lbs “boxes”.
• Each separate box can be safely handled by a single person.
• Rationale: take advantage of both worlds (commercial and humanitarian), avoid need of pallet.
48 in
50 in
FRONT VIEW
40 in
50 in
SIDE VIEW
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Outline Introduction CARE Shelter First Objectives Challenges Deliverables
Distribution Network for Disaster Relief Warehouse Location Model and Cost
Estimates Case Studies
Conclusions
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Challenges Identification of issues in Relief logistics
for Shelter First Initiative Different focus by CARE and Shelter First Feasibility of One-day response time
target Data collection Pre-positioning of possible warehouse
positions
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Outline Introduction CARE Shelter First Objectives Challenges Deliverables
Distribution Network for Disaster Relief Warehouse Location Model and Cost
Estimates Case Studies
Conclusions
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Distribution Network
• 3 stages:• Manufacturing sources to Warehouses• Warehouses to Staging Area • Staging Area to Beneficiaries
Warehouse Staging Area Beneficiaries
(Disaster Zone)
500 to 2000 miles
~ 100 milesSupplier
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Deliverables: Network Strategy
Mobilization and Procurement
(21 days)
Existing Timeline of Shelter Delivery by CARE
Long Haul Transit
(1 day)
Last “100-Mile”
(1 day)
Delivery to Beneficiaries
(7 days)
Proposed Timeline of Shelter Delivery by CARE
Mobilization
(3 days)
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Distribution Network
• From Manufacturing sources to warehouses• Delivery of shelters does not have to
be expedited (Push to stock)• Stocking at warehouses can be done
through economical means such as trucks, rail, sea-freight, air, etc
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Distribution Network
• From Warehouses to Staging Area:• Expedited delivery by commercial express
air carrier• Strike of Disaster• Report on damage assessment• Notify commercial express air carrier• Warehouses prepare shelters for shipping• Staging area is the nearest airport for
regular aircrafts
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Distribution Network• From Staging Area to Beneficiaries
(“100-mile”):• Handoff to beneficiaries within 24 hrs
• If air-drop or air-lift is feasible, fly from Staging Area to Beneficiaries
• If airdrop is infeasible, use any transportation mode available for final distribution
• Modes of transportation• Animal carts/animals• Boats• Helicopters• Pick-up trucks, SUV’s, small trucks
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Distribution Network
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Outline Introduction CARE Shelter First Objectives Challenges Deliverables
Distribution Network for Disaster Relief Warehouse Location Model and Cost
Estimates Case Studies
Conclusions
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Model Rationale
• Requires fast response time to unpredictable (unscheduled) demands
• Basic strategy:• Stockpile inventories “near” possible
disaster zones• Activation of outbound transportation
at short notice
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Warehouses: Centralized vs Decentralized
Decentralization Centralization
Inventory High Low
Response lead time Low High
Overhead cost High Low
Inbound transportation cost High Low
Outbound transportation cost Low High
For a given response lead time and a given budget, balance the tradeoffs
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Warehouse Location Model• Provide a staged plan based on projected
budget growth.• Objective: Maximize coverage• Decision variables:
• Number of warehouses.• Location/s of warehouse/s.• Inventory level/s.
• Constraint: budget constraint.• Inputs:
• Possible demand points, magnitudes and frequencies.
• Candidate locations for warehouses.• Costs.
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Budget Constraint• Projected budget for purchase of shelters,
transportation, warehousing (excluding admin overhead):
• Year 1: $1.2 million• Year 2: $2.4 million• Year 3: $4.8 million• Year 4: $6.0 million
• Assume half of the funds after year 1 will be used for replenishment.
• The goal for each warehouse is to have 10,000 shelters on hand.
• Estimated costs only for shelter.• Cost estimates for additional kits to be
determined.
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Cost of Typical Airdrop Operation• C-130 - $3,500 / hour of charter• 500 shelters – 7 flights• 1000 mi trip – 3 hr flight• 2 hrs loading• Approx $185,500 air carrier• $371 transport / shelter• $0.371 / mile / shelter• Total shelter cost: $500 + $371 • Grand total: $435,500
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Model Formulationr w t
rwtXcoverage Maximize
twYMZ
twYMX
twYY
tinvcbudgettpt
twinvX
trExpDemandX
twinvXZinv
tbudget
twdcXc
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tYYcYccc
wtwt
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twwt
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rwtrwt
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rwtwtwt
t
t tt
rrt
sheltermilepertptrwt
tptwt
wtshelterperpurchasing
wt
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setupwwt
operatingw
tptwt
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subject to
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t
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Cost components
Budget constraintInventory balance
Tpt budget adequacy Warehouse fixity
Inventory adequacy
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Demand Estimate
• Collected historical information on the number of people displaced because of natural disasters around the world
• Although historical information of disasters can’t predict future events, the analysis provides an idea of frequent geographic locations and expected demand
• Aggregating of expected demand across many locations
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Candidate Locations
• Carried out analysis based on:• Connectivity (port and airport
volumes)• Cost of living• Ease of doing business• Political Stability
• First-cut shortlist of 80, narrowed down to 20.
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Candidate Locations
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Candidate Locations• Based on input from CARE, the following list is
very much preferred:• Panama• Dubai (UAE)• Mombassa (Kenya)• Mumbai (India)• Hong Kong• Johannesburg (South Africa)
• Reasons for preference:• Existing suppliers near these cities• Established transportation network
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Results from Model First warehouse to open: Mumbai, India Year 3, open warehouse in Hong Kong Total shelters delivered over 8 years = 48122 “Steady state” inventory = annual utilization –
2000 in Mumbai & 6500 in Hong Kong Cost structure over 8 years
Setup: $350K Operating: $2.3M Purchasing: $28.2M ($4.2M in inventory) Transporting: $7.5M
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Sensitivity Analysis 2 shelters per pallet
11% increase in coverage (53249) 4 pallets per pallet
18% increase in coverage (56886) 20% increase in aircraft charter rates
Increase in tpt costs: $100K/year or ~13% 20% increase in warehousing costs
1.2% decrease in coverage (47563) 50% in setup costs
0.5% decrease in coverage (47877)
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Sensitivity Analysis
Half shelter cost, a quarter of volume 112% increase in coverage (101874)
10 times annual budget Order of warehouse opening
Year 1: Mumbai & Hong Kong Year 2: Dubai Year 3: Panama & Mombasa Year 4: Johannesburg
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Outline Introduction CARE Shelter First Objectives Challenges Deliverables
Distribution Network for Disaster Relief Warehouse Location Model and Cost
Estimates Case Studies
Conclusions
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Flood in Vietnam Disaster strike on Dec 04 2005 and
concluded on Dec 24 2005 Influence to the residents:
• Affected region: 63,090 sq km• Damage: $ 27 Million• Dead: 62• Displaced: 20,000 • Homeless: 18,000• Infrastructure of houses: 171 destroyed, 335 damaged, 5300 inundated…
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Flood in Vietnam
Affected areas:
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Flood in Vietnam
Influence on the transportation:
• 49 bridges damaged
• Traffic backed up to 30 km as landslides cut off 2 sections of highway
• Emergency bypasses to two sections of Highway 1 were built in Phu Yen Province
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Flood in Vietnam
Local Government’s Reaction Displace the affected residents to the
nearest higher land for sheltering Provide limited quantity of relief
material for short term consumption
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Flood in Vietnam
NGOs’ Reaction to the Flood Assessment and report of the damage and the
number of people affected Estimation of the demand of the relief material Coordination in the provision of the relief
material Mobilize the logistics operation provided by the
commercial service providers Usually the arrival of the first batch of relief
material is 4 to 5 weeks after the disaster
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Flood in Vietnam
You cannot do an act of kindness too soon, for you never know how soon it will be too late…
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Flood in Vietnam
Shelter First’s Goal: Shelters reach the victims who need
them most within 3 days after the occurrence of the disaster
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Flood in Vietnam Proposed response by Shelter First
Initiative
Long Haul Transit
(1 day)
Last “100-Mile”
(1 day)
Mobilization
(3 days)
Warehouse in Mumbai
Staging Area at Tan Son Nhut Airport at Ho Chi Minh City
Disaster Zone
2320 miles by UPS
200 miles by air-lift or air-drop
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Flood in Vietnam Proposed reactions by Shelter First
Initiative 18,000 homeless 3,600 shelters needed since 5 person/shelter Shelter First’s 10% commitment of 360 shelters 54,000 pounds at 150 pounds each or volume of
~23000 ft3 (cube governs) 5 entire Airbus A300 payload (89,000 pounds or ~70
pallets) Need ~ 5 chartered flights Leg 1: Transportation Cost ~$250,000 Leg 2: Airdrop Cost ~$50,000 Total ~$300,000 or $0.33 per shelter per mile
Corrected!
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Flood in Vietnam
Distribution to beneficiaries CARE staff receive the shelters from
trucks or boats and distribute them to the local beneficiaries
Alternatives strategy for last “100-mile” Local military aircraft if available
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Conclusions• 1-day response near impossible• Significant costs in air-dropping• Costs most responsive to volume per
shelter• Most critical to open warehouses in
Mumbai and Hong Kong• Potential savings from using 2-legged air
freight• Great uncertainty in last “100-miles”
transport modes and transit times
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48
Thank you
• Questions?