Friday, January 28, 2011

CHARLES Aurelie, GATIGNON Aline,
VAN WASSENHOVE Luk
The Yogyakarta Earthquake IFRC's First Experiences with the Decentralized Supply Chain
© 2011 INSEAD Case Study
Also available: Teaching Note



On May 27th, 2006, a devastating earthquake hit the Indonesian island of Java. The Indonesian Red Cross, Palang Merah Indonesia (PMI), set up a relief operation in the province of Yogyakarta. The NGO already had extensive experience in disaster relief, having battled a volcanic eruption two months earlier as well as two tsunamis during the preceding year. This operation, however, was slightly different. The International Federation of the Red Cross (IFRC), of which PMI was a member, had just decentralized its supply chain for disaster relief by setting up three regional logistics units (RLU) in strategic locations across the globe. PMI’s relief operation in Yogyakarta was the first of the IFRC’s national societies to benefit from the support provided by the new RLU in Kuala Lumpur. The case looks back over ten years, tracing the substantial changes that supply chain decentralisation incurred at the organizational level, and the challenges thrown up by the process of establishing the RLUs. It is the final part of a series of three case studies on the reorganization of the IFRC supply chain

Pedagogical Objectives: To portray a practical application of supply chain principles in the humanitarian sector through the implementation of the decentralized supply chain at the IFRC. To illustrate how an alignment between organizational readiness and the adoption of basic logistics components was a prerequisite for implementing the new supply chain model.