The role of multi-nationals in building solutions in humanitarian logistics
Cynics may claim that traditional corporate social responsibility (CSR) initiatives were about throwing money at a problem and being rewarded with a glossy brochure and a few great photo opportunities for the annual report. Whether or not this perspective is fair, today’s public private partnerships (PPPs) are far more engaging as companies play an active part in project teams and provide technical skills focused on their core area of expertise.
Partnerships are not necessarily formed at Davos. You don’t need a prime minister or president that is passionate about development and no rockstar is required to initiate a successful partnership . There are great opportunities to form partnerships at local levels, which are likely more sustainable and certainly less susceptibility to shifts political or popular culture.
What can MNCs bring to the table?
Financial – In addition to financial support, increasingly companies are supporting project teams and are also involving other players. These players could be other large multi-nationals or even local players with a footprint in the respected country. MNCs can act as connectors between companies, bilateral donors and academics. For example, The Coca-Cola Company actively engages with academic institutions such as Yale and Harvard on PPPs.
The right fit – Not all companies will be a good fit for every workstream, but if companies focus on their core skills (e.g. Coca-Cola & distribution, DHL & supply and cold chain, IBM & technology), great value can be added to projects. Most workstreams will likely focus on solving everyday problems and will not require groundbreaking technology (e.g. drones responsible for “last mile” logistics).
Local networks – One of the great advantages of MNCs is their ability to tap into local networks and connect project teams with local operations and expertise on the ground. Local operations understand local trading conditions and can access local cost structures. In my experience, this is also invaluable exposure to international project teams, who witness how these companies operate in a difficult operating environment and solve problems at local level, often with limited resources. In one of our projects we received great insight from SabMiller about transportation management in South Sudan. They shed light on some of the technical difficulties when importing vehicles and the challenges with recruiting qualified technicians that might have otherwise been missed.
Point of engagement – MNCs can opt for a number of points of engagement that can include boards, technical advisers, imbedded projects teams and shared resources. In some cases MNCs might also decide to appoint a resource to liaise between the project team and the local operation.
MNC as the superhero?
It is important to note that MNCs will be unable to solve all challenges and also struggle with some of the same challenges as humanitarian logistics organizations. MNCs have yet to write the definitive guide on “last mile” logistics Africa. Some have been successful in certain areas (e.g. Coca-Cola micro distribution in Africa) but there is still a lot to learn for most organizations. However there are a number of areas where MNCS can add value, including:
Demand planning & procurement – As humanitarian organizations move from emergency to development modes of operation, there is an increased need to understand demand planning and procurement.
Routing and scheduling – Information is not always well documented and good network design can add significant value in the long term. MNCs can also bring unique insights about “last mile” logistics and working with distribution partners.
Transportation management- Scheduling and vehicle maintenance remain areas of opportunities for many organizations. Riders for Health, a non-profit organization, has made this their core focus. However, there remain significant opportunities in this area for many organizations. Furthermore, MNCs can also provide great insight on 3rd party logistics and negotiating transport rates.
Incentives insights- There is increased interest how MNCs employ incentives to motivate employees and increase productivity.
Benefits to MNCs?
Employees and community – Most employees love to give back to the community. Local employees have a vested interest in what happens in their community and they take great pride in their ability to solve problems. Companies also become a more desirable place to work as employees take an active part in solving humanitarian logistics challenges.
Learnings – There is also lot to learn from humanitarian organizations. For example, in mobile technology, the not-for-profit sector has been on the forefront of adopting and piloting a number of projects that could be of interest in the business world. MNCs sometimes have limited knowledge is certain areas. For example, very few MNCs will have a clear understanding of rural distribution and employees can learn a lot of solving complex problem in challenging environments.
Shared infrastructure - There is also a real opportunity to share infrastructure, especially in rural areas where it is always hard to make the numbers work. Too often ambulances act as delivery vehicles in Africa, when idle capacity is available in the vicinity. With the right partnership, shared resources can bring mutual benefit to parties involved.
Update: 01 Jan 2012
See presentation slides.