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Evaluation of strategic stockpoints for UNFPA using a facility location mode

Hansson, Erik LU and Sagar, Dayanand LU (2018) MTTM05 20181
Engineering Logistics
Abstract
Distribution and warehousing networks of Humanitarian Organizations has proven to be an area where cost reductions and shortened lead times can be achieved. Humanitarian organizations have also started pre-positioning goods in anticipation of disasters as a way to improve their disaster preparedness. Research in the area has, generally, been extensive but few articles have tried to incorporate the shelf life of the goods that have been prepositioned. The study aims at incorporating the lessons learned from research of prepositioning and network layouts for humanitarian organizations with the shelf life aspects.

To achieve the purpose of this study, a literature review and a single case study combined with mathematical modelling. The... (More)
Distribution and warehousing networks of Humanitarian Organizations has proven to be an area where cost reductions and shortened lead times can be achieved. Humanitarian organizations have also started pre-positioning goods in anticipation of disasters as a way to improve their disaster preparedness. Research in the area has, generally, been extensive but few articles have tried to incorporate the shelf life of the goods that have been prepositioned. The study aims at incorporating the lessons learned from research of prepositioning and network layouts for humanitarian organizations with the shelf life aspects.

To achieve the purpose of this study, a literature review and a single case study combined with mathematical modelling. The case chosen was a humanitarian organization with products that has shelf life restrictions: UNFPA. The subjects of the literature review covered case-specific factors regarding network planning, disaster preparedness and facility location problems in both commercial and humanitarian organizations. 13 interviews and two validation meetings were carried out to lay the ground for the understanding of UNFPA as well the need that should be fulfilled by a facility location model.

When these two steps had been completed a new facility location model was developed that incorporated a global demand for UNFPA, 14 potential warehouse locations, transport and purchasing costs, shelf life limitations and relevant factors such as logistics hardship. The model was run in an optimization program to be able to give recommendations as to how UNFPA may revise their current layout.

The study identified some clear benefits as well as drawbacks with the pre-positioning of goods on both a regional and national level. The study also identified some core issues for UNFPA that would have to be solved before an alteration of the warehouse network could be carried out. The study did, however, show that there would be clear cost reduction benefits from switching to a decentralized warehouse layout as well as some lead time reductions. The optimization model that was developed is also applicable in another case with a Humanitarian Organization using perishable commodities. (Less)
Popular Abstract
How a mathematical optimization can save lives

Humanitarian organizations have woken up to the fact that there are a lot of cost and lead time reductions to be saved by re-designing their distribution network. An investment in this can save lives when done right. This study aims at doing just that.

This study was made in collaboration with the United Nations Population fund - UNFPA. UNFPA works with reproductive health in the world by, among other things, delivering emergency kits to disasters such as the earthquake in Nepal 2015 or the conflicts in Syria and South Sudan. These emergency kits contain products that can be used by doctors and others to facilitate safe childbirths or treat victims of rape. The organization hopes to... (More)
How a mathematical optimization can save lives

Humanitarian organizations have woken up to the fact that there are a lot of cost and lead time reductions to be saved by re-designing their distribution network. An investment in this can save lives when done right. This study aims at doing just that.

This study was made in collaboration with the United Nations Population fund - UNFPA. UNFPA works with reproductive health in the world by, among other things, delivering emergency kits to disasters such as the earthquake in Nepal 2015 or the conflicts in Syria and South Sudan. These emergency kits contain products that can be used by doctors and others to facilitate safe childbirths or treat victims of rape. The organization hopes to save costs, and thus be able to help more people, by re-designing their distribution network and re-placing their warehouses. Currently, UNFPA only has one warehouse in Amsterdam, the Netherlands.

To do this the authors developed a facility location model that accounted for a number of factors. The model used the total demand of reproductive health in disaster-stricken populations that UNFPA serve, the shelf life of the emergency kits, the transportation costs to and from warehouses as well as specific factors that aims at describing the contextual,
logistical factors of the nations that the warehouses could be located to. To solve the optimization problem in the model a computer program was used to optimize the warehouse locations based on cost and lead time. The results of the optimization showed that UNFPA could save costs and reduce lead times by moving part of their stock of emergency kits to the United Nations Humanitarian Resource Depots - UNHRD - in Accra, Ghana and Dubai, UAE.

The facility location model that was developed presents a new way of incorporating the shelf life of products, such as medicines, whilst using a global, changing demand. The model that was developed can potentially help other humanitarian organizations facing similar challenges as UNFPA such as ​Médecins Sans Frontières or the World Health Organization.

UNFPA:s goal is to ensure a world where everyone has reproductive health rights and it is our belief that, in this instance, a bit of mathematical optimization can go some way to create such a world. (Less)
Please use this url to cite or link to this publication:
author
Hansson, Erik LU and Sagar, Dayanand LU
supervisor
organization
course
MTTM05 20181
year
type
M1 - University Diploma
subject
keywords
Humanitarian Logistics, Facility Location, UNFPA, Perishable Commodities, Pre-positioning
report number
5873
language
English
id
8958296
date added to LUP
2018-09-13 12:48:53
date last changed
2018-09-13 12:48:53
@misc{8958296,
  abstract     = {Distribution and warehousing networks of Humanitarian Organizations has proven to be an area where cost reductions and shortened lead times can be achieved. Humanitarian organizations have also started pre-positioning goods in anticipation of disasters as a way to improve their disaster preparedness. Research in the area has, generally, been extensive but few articles have tried to incorporate the shelf life of the goods that have been prepositioned. The study aims at incorporating the lessons learned from research of prepositioning and network layouts for humanitarian organizations with the shelf life aspects. 
 
To achieve the purpose of this study, a literature review and a single case study combined with mathematical modelling. The case chosen was a humanitarian organization with products that has shelf life restrictions: UNFPA. The subjects of the literature review covered case-specific factors regarding network planning, disaster preparedness and facility location problems in both commercial and humanitarian organizations. 13 interviews and two validation meetings were carried out to lay the ground for the understanding of UNFPA as well the need that should be fulfilled by a facility location model. 
 
When these two steps had been completed a new facility location model was developed that incorporated a global demand for UNFPA, 14 potential warehouse locations, transport and purchasing costs, shelf life limitations and relevant factors such as logistics hardship. The model was run in an optimization program to be able to give recommendations as to how UNFPA may revise their current layout. 
 
The study identified some clear benefits as well as drawbacks with the pre-positioning of goods on both a regional and national level. The study also identified some core issues for UNFPA that would have to be solved before an alteration of the warehouse network could be carried out. The study did, however, show that there would be clear cost reduction benefits from switching to a decentralized warehouse layout as well as some lead time reductions. The optimization model that was developed is also applicable in another case with a Humanitarian Organization using perishable commodities.},
  author       = {Hansson, Erik and Sagar, Dayanand},
  keyword      = {Humanitarian Logistics,Facility Location,UNFPA,Perishable Commodities,Pre-positioning},
  language     = {eng},
  note         = {Student Paper},
  title        = {Evaluation of strategic stockpoints for UNFPA using a facility location mode},
  year         = {2018},
}