Learning from the Military how to handle Disruptions

Daniel Dumke — Mon, 02 Aug 2010 08:45:00 +0000

Disruptions are a fact of life not only since the Supply Chain literature gained awareness of it. So some institutions in fact specialized on handling disruptions as their core competency.
The article “Responding to Disruptions in the Supply Network – from Dormant to Action” tries to transfer the knowledge and best practices present at the military and humanitarian organizations to Supply Chain Management.

Methodology

The authors (Kovács and Tatham) are using case research and a resource based view to find common patterns in military and humanitarian practices to efficiently and effectively act on disruptions.

Military vs. Humanitarian Organizations

The authors find three decision categories common to the two institutions: Physical Capital, Human Capital, Organizational Capital.

Capital	Military	Humanitarian Organizations
Physical Capital	Relative abundance of materials and equipment due to focus on preparation “just in case” Internal resources: importance of individual ownership Location in country of origin or at allies’ site	Lack of own materials External resources: focus on supplier relations (vendor managed inventory, capacity reservation systems), postponement of ownership Pooling of resources Location close to disaster-prone areas
Human Capital	Emphasis on own training of personnel Focus on the knowledge of the doctrine	Mapping potentially available personnel from other organisations In-sourcing personnel from external resources Focus on local knowledge
Organizational Capital	Command and control structure Focus on hierarchy Codified internal processes (doctrine) Limited interoperability	Case-based structure (disruption / programme based) Establishment of common standards Co-ordination with other actors

Results

The article identifies two states for the observed institutions: During times without disruptions they are dormant and only when a disruption occurs they come to action. Though preparation for the “action” phase is very important.
The Military and Humanitarian Organizations exhibit distinct approaches to it.

The Military uses a strong asset focus (acquisition of equipment, training personnel, abundance of internal resources) at the same time they keep a high inventory level and have a rigid command-and-control structure within their organization.

Humanitarian Organizations often specialize in a specific type of disaster, region or type of material. The “Human Capital” is seldomly trained extensively and most often only held in a loose connection to the organization. From the organizational point of view they focus on a strong local presence and, due to the limited resources, focus on postponement (decide on purchasing orders as late as possible), therefore Physical Capital is often local and low.

Conclusion

Supply Chain managers and researchers can learn from both cases alike. The major difference is the resource position from which one acts. Therefore the first step for a company must be to assess the resources available to act on disruptions as soon as they occur.

Reference:

Gyöngyi Kovács, & Peter Tatham (2009). Responding to Disruptions in the Supply Network from dormant to action Journal of Business Logistics, 30 (2), 215-229

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Tags:

business

case study

manager

network design

risk

supply chain

disruptions