How WFP Embraces SCM

The World Food Programme’s (WFP) supply chain is one of the most complex in the world. From reaching out to local and international suppliers of food, purchasing and producing ready-to-use food, to setting up distribution systems in the world’s most challenging environments to reach those it serves—the poorest 100 million people on the planet. The planning and management of all activities involved in sourcing and procurement, conversion, and logistics activities are required to be a well-oiled machine, similar to any other global, multinational, fast-moving consumer goods company. The biggest challenge is cash-flow, as WFP is 100% voluntarily funded.

 

It began as a 3-year experimental program to move food surpluses to food deficient areas in 1963. An earthquake hit Iran in September 1962, followed by a hurricane in Thailand, while newly-liberated Algeria was resettling 5 million refugees. Food was urgently needed – WFP came to the rescue. It has never stopped since.

 

An average of a million tons of food is constantly in transit around the world, passing through a network of more than 2,000 warehouses in central locations, extended delivery points, and final destinations, and typically in areas where there is very limited infrastructure and transportation systems. When these areas are not accessible by road, rail, or river, other methods are brought into action.

 

Immediate response to critical shortages may require cargo drops from aircraft and helicopter airlifts, the use of local porters or teams of elephants, yak, donkeys, and camels to carry life-saving food to beneficiaries cut off from the rest of the world. If local markets lack the specific types or numbers of vehicles required, WFP establishes its own fleet. If existing warehouses are insufficient or unavailable, new ones are erected. If roads become impassable due to seasonal flooding, WFP forwards plans to pre-position enough food to last until the waters subside, and roads re-open.

 

SAFETY IS A PRIORITY

WFP’s supply chain is a cohesive and high-performing business model but is faced with many challenges.

 

With a daunting commitment to support the needs of more than 100 million people in 73 countries, WFP requires a massive network of resources, assets, and people. Yet, the organization still needs to partner with the private sector to help optimize its own food supply chain to the bottom of pyramid. Public-private partnerships, on the other hand, will support infrastructure development.

 

Many issues such as food quality and improving the value chain with nutritious food products are all supply-chain issues that require strong partnerships with the private sector for sustainable solutions. For example, food and nutrition companies are active partners, applying the best minds in food technology/nutrition to help tackle malnutrition in challenging environments. These partners also lend technological know-how in the development of new products, and in areas such as packaging, milling, and food safety.

 

As part of United Nations (UN) reform, key UN agencies were named to take the lead in specific sectors or clusters of the disaster response. WFP is accountable to the international community for food, logistics, and emergency telecommunication provision. With its expertise and capacity in transportation and logistics, WFP was also entrusted with the added responsibility of coordinating the logistics response and providing common and cost-effective logistics services to humanitarian community in times of a massive logistics response.

 

Major players in the global express/freight industry have embraced strategic corporate social responsibility by partnering with WFP and leveraging their capacity to help ensure fast and efficient emergency response. Emergency Teams (LETs) composed of WFP, other UN/non-government organization (NGO) partners, and the private sector are activated to intervene over the first crucial three to six weeks following a disaster. These private sector partners provide logistics specialists, assets (e.g.

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warehouses, trucks, forklifts), and transportation services. LETs serve in countries where the logistics member companies already have a base, taking advantage of their knowledge of local infrastructure and constraints to increase the speed and efficiency of aid distribution. Deployment of these teams and assets takes place under the coordination of WFP as the global logistics cluster lead.

 

SUSTAINING A MASSIVE SUPPLY CHAIN

As logistics is at the core of their operations – whether by land, sea, or air – WFP aims to bring aid in the fastest and most efficient way possible.

 

As the recognized and respected leader of humanitarian logistics, WFP works closely with other UN agencies, governments, and NGOs. With over 40 years of experience working in the most remote and dangerous environments, WFP Logistics has established itself as both effective and efficient in delivering aid to beneficiaries.

 

WFP Logistics relies on contracted transporters for most of its deliveries, but where private truckers are unavailable or inadequate, WFP-owned fleets are deployed.

 

WFP is also an airline operator in humanitarian crises where there are no commercial alternatives. Branded as UN Humanitarian Air Service (UNHAS), WFP operates 100 planes and helicopters on missions ranging from food airdrops and helicopter sling deliveries to transporting relief workers to remote and dangerous locations.

 

OPPORTUNITIES FOR PUBLIC-PRIVATE PARTNERSHIPS

In 2008, the World Economic Forum (WEF) member companies and the UN launched two initiatives to facilitate further private sector support to humanitarian relief operations.

 

The first initiative is a set of 10 high-level guiding principles designed to direct both the private sector and humanitarian community as they work together to provide effective relief to those in need. The second initiative (a result of LET initiatives), is a unique, pioneering example of collaboration between several companies working across competitive lines to support the humanitarian relief sector. TNT, UPS, Agility, and other logistics and transport companies have joined forces to help the humanitarian sector respond rapidly to breaking crises. The WEF facilitated these initiatives by offering a neutral platform for the development of partnerships between the humanitarian relief sector and member companies.

 

In response to the catastrophic flooding in the Philippines caused by tropical storm Ketsana and typhoon Parma, a LET was activated to respond. Locally available assets were put at the disposal of WFP coordinated Logistics Cluster. LET-donated trucks were tasked to shuttle goods from warehouses to an air base for either onward helicopter delivery or movement by road or air.

 

The Philippines LET has provided warehouse space for short-term multi-agency use, as well as staff for warehouse management. Personnel have also been made available to assist in warehouses and support the dispatch of goods from these facilities.

 

LOCAL PROCUREMENT = EFFICIENT SUPPLY CHAIN

WFP also uses its purchasing power to support rural agriculture development and promote food security. Its success in conducting local procurement however depends on a network of public-private partnerships through corporate foundations, agri-business, and agro input suppliers.

 

WFP Executive Director Josette Sheeran has consistently asserted the organization’s commitment to use its purchasing power to support the sustainable development of food security. That commitment stems from the fact that WFP has been a leading player in food markets in many countries for decades. In accordance with its new Strategic Plan for 2008 to 2011, WFP seizes new opportunities to design its food assistance programs in a way that generates substantial demand for surplus food staples grown by small-scale farmers, reducing risks and improving incentives for investment in productivity-enhancing and income-increasing technologies and practices. Further, when procuring from developing country food markets, WFP's procurement procedures aim to avoid negative effects on those markets, including price increases that would harm the food security of the poor.

 

Cereals form

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the biggest portion of the traditional food basket provided to the beneficiaries. This includes mainly wheat, maize, rice, and a much smaller proportion of sorghum. Blended foods come second, including mainly corn and wheat soya blends as well as high-energy biscuits. WFP also buys a lot of pulses of different varieties, vegetable oil, wheat, and maize flour as well as smaller quantities of salt and sugar.

 

By launching an innovative initiative to purchase locally, and connect small farmers to markets, WFP’s Purchase for Progress (P4P) empowers smallholder and low-income farmers to supply food to WFP’s global operations and gain more income and human security by doing so. WFP aims to give farmers the know-how and the tools to be competitive players in the agricultural marketplace.

 

It will also put more cash directly into their pockets in return for their crops. By helping hundreds of thousands of smallholder farmers gain access to reliable markets to sell their surplus crops at competitive prices, local procurement bolsters fragile local economies, ensures WFP sources ethically, and promotes fairer trade for smallholder farmers, thus boosting their incomes and opportunities to overcome poverty.

 

SUSTAINING WFP’S SUPPLY CHAIN

Overall, WFP develops innovative public-private partnerships to strengthen its ability to respond to the increasing needs of the hungry poor. Companies specializing in logistics services, or businesses running large-scale distribution systems, help improve the efficiency of WFP through state-of-the-art commodity-tracking and other supply chain methodologies and technologies. Companies that are in the business of food technology, nutrition, life sciences, and innovations to improve the quality of life through food can strengthen the type of food that WFP distributes. WFP offers a unique  knowledge exchange opportunity, where the developed world’s most seasoned logisticians interact with WFP’s own  experts, who present them with an entirely different and challenging world view.

 

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THE AUTHOR

CYNTHIA JONES is the regional head for Private Partnerships of the World Food Programme – Regional Bureau for Asia. She has over 14 years of experience in managing large-scale humanitarian and development programs.

 

PHOTO CREDIT: WFP / Veejay Villafranca

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