Investing in Disaster Management Capabilities versus Pre-positioning Inventory: A New Approach to Disaster Preparedness
Disaster preparedness has been recognized as a central element in reducing the impact of disasters worldwide. The usual methods of preparedness, such as pre-positioning relief inventory in countries prone to disasters, are problematic because they require high investment in various locations, due to the uncertainty about the timing and location of the next disaster. Investing in disaster management capabilities, such as training staff, pre-negotiating customs agreements with countries prone to disasters, or harmonizing import procedures with local customs clearance procedures, has been recognized as a way to overcome this constraint. By means of system dynamics modeling, we model the delivery process of ready-to-use therapeutic food items during the immediate response phase of a disaster, and we analyze the performance of different preparedness scenarios. We find that pre-positioning inventory produces positive results for the beneficiaries, but at extremely high costs. Investing in disaster management capabilities is an interesting alternative, as it allows lead time reductions of up to 67% (18 days) compared to a scenario without preparedness, at significantly lower costs than pre-positioning inventory. We find that the best performance can be achieved when combining both preparedness strategies, allocating part of the available funding to disaster management capabilities and part to pre-positioning inventory. We analyze 2828 such combined scenarios to identify the best mix of preparedness strategies for different levels of available funding. On the basis of our findings, we provide recommendations for relief organizations on how to allocate their preparedness budget.
2828 combined scenarios to identify the best mix of preparedness strategies for different levels of available funding.System dynamicsValidation: validity of internal structure of the model, behavioral accuracy of the model, sensitivity analysis
Evaluate the effects of investing in disaster management capabilities through system dynamics modeling.
Delivery performancecosts
Scenario-based:No preparednessPre-positioning of inventoryInvestment in disaster management capabilitiesSystems dynamics model; single disaster, single country, and single organization
Empirical data, primary data collected, publicly available secondary data from websites and media reports
How does pre-positioning inventory and investing in DMC improve the delivery of relief supplies during the immediate disaster response, in comparison to an import scenario without preparedness? What is the potential of pre-disaster investment in DMC, as compared to pre-positioning, for reducing the costs of the preparedness phase?What is the optimal mix of pre- positioning inventory and investing in DMC?
Several practitioners mentioned that custom clearance lead times of up to four weeks when no previous relationships were established with customs.Respondents also mentioned that once DMC have been develeoped, customs clearance lead time are usually between 1 and 5 days.
We find that pre-positioning inventory produces positive results for the beneficiaries, but at extremely high costs.Investing in disaster management capabilities is an interesting alternative, as it allows lead time reductions of up to 67% (18days) compared to a scenario without preparedness, at significantly lower costs than pre-positioning inventory.However, the results of our mixed scenarios revealed that better results can always be achieved with a combination of pre-positioning inventory and investing in DMC.Recommendations:On the basis of our findings, we recommend that donors finance more preparedness activities in countries prone to disasters.
By comparing a scenario without preparedness with one in which supplies have been pre-positioned in the country and one in which investments in disaster management capabilities (DMC) have been made, we demonstrate the strong improvement potential of disaster preparedness activities.
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