Copyright 2003, Traffic World, Inc.
War with Iraq dominates the news but for David Kaatrud, chief of logistics at the Rome-based World Food Program, it is one item on a lengthy to-do list.
In terms of the Iraqi conflict, the WFP is "planning for refugees and the aftermath of hostilities," said Kaatrud. Also standing in line for the agency's food aid programs is southern Africa, a mission he described as "very large, 100,000 tons-plus a month and with lots of corridors." Then there is the million or so tons of food he hopes to deliver to the Horn of Africa this year to stave off mass hunger. In Afghanistan "we have made it through the second winter" and in Palestine there are some tough cross-border issues involving Israel. A challenge in North Korea is how to continue port operations with no electricity, and "west Africa is becoming unglued."
The WFP is involved in 83 countries and to manage the logistics of these many operations Kaatrud spends more than 250 days a year on the road. "We have people on the ground keeping a hand on the pulse," who give some warning of impending disasters, he said. But most of the time he and his team are responding to emergency situations.
"Over the years we have developed a whole range of logistics interventions," said Kaatrud. Like putting a locomotive "on a line that was underperforming in Mozambique," he said. There was insufficient capacity to meet the needs of starving people in Malawi, he explained. His team "did the analysis" and decided that the best way to spend the available transportation dollars was to repair the track and lease locomotives to haul the food.
As Kaatrud pointed out "these are not long-term, World Bank-type projects" but quick-fix projects that may require the WFP's logisticians not only to plan the most cost-effective way to move a shipload of grain from, say, Galveston, Texas, to the Congo, but to build some infrastructure to make the final delivery. Each time the agency has to "write a project," he said, and the proposal is put out to the donor community for support. In these cost-conscious times, "we have to perform. If we did not perform we would just wither and die," he said. So cutting costs is not simply a commercial imperative. It is a matter of life and death since dollars spent on transportation are not available to buy food.
One of the principles guiding his work is maximizing the amount of food that is delivered to the world's millions of victims of starvation. That is even harder than it sounds. Since food is perishable, and the WFP drives down inventory levels to a minimum to save costs, a big part of Kaatrud's supply-chain management job is making sure "we don't call forward too much or too little." The pipeline has to be carefully planned and there can't be any breaks.
That is a challenge not only because the logistics are complex. "We do not have an in-house budget," said Kaatrud. He is reliant on what donations the WFP can muster. They come in various forms, including cash and food, and each donation has a timeline that has to be incorporated into the WFP's ongoing response strategy.
Another complication is the WFP's relationships with nongovernmental organizations, or NGOs, charitable bodies that are an intrinsic part of the fight against world hunger. These organizations have different areas of expertise and often take care of the final distribution for the WFP. "We are kind of a wholesaler and they are a retailer oftentimes," he said. The NGO may operate a warehouse upcountry that will distribute food locally. Again, these relationships have to be factored into the WFP's overall aid effort.
A second guiding principle is that "we always keep in touch with the marketplace," Kaatrud said. That means continuously putting out bids for services that give the best value. However, the commercial markets tend to break down the closer WFP gets to the action. For example, "in some areas there are no commercial trucks, so we have to run our own fleet." The agency has a large aviation unit that moves freight to stricken areas. It is all part of what Kaatrud referred to as "a hierarchy of intervention" that the WFP deploys as needed.
The United Nations agency also deploys technology in its battle to feed the hungry. Commercial developments in supply-chain management technology "have not gone unnoticed," he said, and in addition to applying off-the-shelf software to its specific needs, the agency has developed some of its own. In fact "we have some technologies that are more advanced than the private sector," he said.
Global supply-chain functions such as procurement are on an SAP platform, he said. A modified Oracle platform tool that performs tasks such as commodity tracking, "so that at any point in time I know what's happening at transshipment points," provides tactical support.
An innovation the United Nations has developed enables operatives to sit in a vehicle with a laptop computer "and have the whole (WFP) database replicated up and down the supply chain," Kaatrud said. A laptop is hooked into the vehicle radio and the operator can "send packets of information to another city" and update the agency's database all the way to its headquarters in Rome. The software is being updated with more powerful reporting features and will be released soon, he said. More innovations are in the pipeline. A few years from now, all emergencies will benefit from satellite communications and web connectivity, said Kaatrud, and the agency now is installing the backbone for these systems.
Another area where the WFP claims to be on par with the private sector is in its management structure. In 1997 it started to decentralize, said Kaatrud, and now "the field does most of the contracting," avoiding the need for a large bureaucracy in Rome. The management of core shipping and air services is still in Rome, "so we don't have to deal with brokers," he said. Additionally, decentralization "allows us to think about systems and best practices."
A second major organizational initiative is that the WFP is helping other UN units improve their logistics coordination work. "We have a mandate to create a facility that does it, the UN Joint Logistics Center," he explained. This is one of the five projects that the WFP is pursuing as part of a strategic partnership with Dutch mail, express and logistics group TPG N.V., announced in December.
The relationship with TPG also will help improve the agency's inventory management capabilities. Keeping food on the move and not stored is a primary objective, and the agency does a decent job in tracking commodities moving through the logistics pipeline, Kaatrud said. "But we are not sophisticated in inventory management at the transshipment points." Another area where it needs assistance is in fleet management. Kaatrud said the agency operates 700 to 800 trucks but "we need some private-sector help to refine the fleet management systems." The agency is working with a distribution company in the United Kingdom to achieve this. The WFP also needs to harness more of the Internet's capabilities. "We are trying to get more powerful virtual management tools," Kaatrud said.