1.2 Exploring logistics competences and capabilities in not-for-profit environments The case of Médecins Sans Frontières DIEGO VEGA Neoma Business School and Cret-Log, France The role of logistics as a source of competitive advantage for irms has been largely studied in the strategic management literature. This is supported by the idea that irms are a bundle of resources and, thus, irm-speciic logistics resources and capabilities explain the differences in performance among irms in the same industry. A context in which logistics has recently achieved particular interest, due to its important contribution to the success of operations, is humanitarian relief. Over the past few years, the ield of humanitarian logistics has witnessed great advances in both theory and practice. However, the logistics competences and capabilities needed to ensure the success of relief operations from an organizational perspective are seldom studied in academic literature. This chapter addresses this issue by studying the case of Doctors Without Borders, Médecins Sans Frontières (MSF), a medical humanitarian organization that is widely recognized by its logistics excellence. Based on a conceptual framework developed through an extensive academic M01_KOVÁCS_4683_01_P01.indd 20 5/23/2016 5:20:28 PM The Case of Médecins Sans Frontières 21 literature review, semi-structured interviews and internal documentation were analysed, exploring the logistics competences and capabilities found at MSF. A set of capabilities were identiied as important for the success of the operations, as well as a number of competences that result from the combination of such capabilities. Based on these results, it is suggested that for the case of MSF, logistics can be considered as both a core and a distinctive competence. Possible implications for the humanitarian community are drawn and further research with a wider sample of non-governmental organizations (NGOs) is encouraged. Introduction In the ever-growing body of knowledge of logistics and supply chain management, a lot has been written on the substantial role that logistics has in achieving sustained competitive advantage (Porter, 1980). Numerous authors argue that superior resources and skills contribute to sustained competitive advantage (eg Day and Wensley, 1988). Others suggest that irms must combine their resources and skills into core competencies to achieve sustained competitive advantage (eg Prahalad and Hamel, 1990). Over the past years, a considerable amount of research in logistics has been dedicated to the identiication and deinition of competences and capabilities, supporting the idea that irm-speciic logistics resources and capabilities can explain the differences in performance among irms in the same industry (Olavarrieta and Ellinger, 1997). Recently, a context in which logistics has gained attention from both academia and practitioners is humanitarian relief, as almost 80 per cent of the activities undertaken are logistics-related (van Wassenhove, 2006). However, studies on the organizational logistics competences and capabilities needed to ensure the success of humanitarian operations is almost non-existent, although humanitarian organizations compete for fund donors and emergency relief logistics is considered as a differentiator and a competitive tool in the ‘crowded’ humanitarian sector (Oloruntuba and Gray, 2006). This chapter addresses this point by exploring the organizational logistics competences and capabilities needed to ensure the success of humanitarian relief operations. The chapter is structured as follows. First, the most prominent works on logistics competences and capabilities are presented, as well as a short overview of the resource-based view (RBV), constituting a theoretical framework. The research design section then explains the methodological choices and the methods used to explore this phenomenon. The indings from the empirical study are presented, before M01_KOVÁCS_4683_01_P01.indd 21 5/23/2016 5:20:29 PM 22 The Humanitarian Context concluding with a short discussion on the implication of such indings for both academia and practitioners. Literature review Over the past years, a considerable amount of research in logistics has been dedicated to the identiication and deinition of competences or capabilities in order to support the idea that logistics can be considered as a source of sustained competitive advantage. However, indings show that research on this issue is far from being stable, as the terms ‘logistics competences’ and ‘logistics capabilities’ are used interchangeably in literature (Morash, Dröge and Vickery, 1996). The following sections review, based on logistics and supply chain management (SCM) literature, the most prominent works on these two streams of research, logistics competences and logistics capabilities, and the relation of each of these two concepts with sustained competitive advantage. Logistics competences and capabilities One of the irst works on logistics competence was conducted by the Global Logistics Research Team at Michigan State University (MSUGLRT). The research team proposed in 1995 a ‘World Class Logistics Competency Model’, based on a study on how some of the world’s best-managed companies used logistics to achieve competitive superiority (MSUGLRT, 1995). In the model, each competency was conceptualized as being comprised of several functional capabilities, which in combination create a competency. The study reported some empirical evidence that world-class practices are correlated with better logistics performance. This irst logistics competences framework was the basis for an important number of studies all over the world. Based on this framework, Stank and Lackey (1997) examined the relation between capabilities and competencies and found integration and agility to be of great importance to logistics performance. Later on, Anderson, Jerman and Crum (1998) conducted a survey on the importance of quality management practices in the achievement of operational results and customer satisfaction with members of the American Society of Transportation and Logistics. Results show a causal relationship between quality management factors and logistics outcomes, speciically logistics operational performance and customer service. Daugherty, Stank and Ellinger (1998) conirmed the strong link between logistics capabilities and customer satisfaction from a study that M01_KOVÁCS_4683_01_P01.indd 22 5/23/2016 5:20:29 PM The Case of Médecins Sans Frontières 23 examined the relation between buyers and sellers in a business to business (B2B) setting. Goldsby and Stank (2000) provided support to the relationship between the World Class Logistics Competency Model, and the implementation of environmentally responsible logistics practices. In Shang and Sun’s (2004) work, the authors combined a resource-based view of the irm and logistics and supply chain management to classify organizations in the manufacturing industry in Taiwan, and conirmed that logistics can be regarded as a key strategic source for acquiring sustained competitive advantage. Shang and Marlow (2005) explored the relationship between performance and logistics capabilities and found that information-based capability plays an important role in the enhancement of the irms’ performance and the facilitation of the irms’ other capabilities. More recently, in Shang and Marlow’s 2007 work, four logistics competencies – namely integration and knowledge competence, customer-focused logistics competence, measurement competence and agility competence – were identiied based on a survey of 1,200 manufacturing irms in Taiwan, conirming the MSU’s framework. Bowersox, Closs and Stank (1999) expanded the MSUGLRT (1995) study and proposed the 21st-Century Logistics Model with six supply chain competences – namely customer integration, internal integration, relationship integration, technology and planning integration, measurement integration and supplier integration – and the ‘Supply Chain 2000 Framework’, which identiies the competences essential to integrating supply chain logistics. The authors conducted a survey of 306 senior North American logistics executives in order to obtain information on the supply chain competences and performance metrics. Results conirmed that the companies possessing these key competencies experienced operational and inancial improvement. In an attempt to substantiate the academic relevance of Bowersox, Closs and Stank’s (1999) work, Stank, Keller and Closs (2001) showed that superior logistics performance is a reward for high achievement on supply chain logistics integration competencies and that customer integration is the most critical competency associated with improved performance. Many authors have applied this framework to international environments. Some of these works include Carranza, Maltz and Antun (2002), who used this framework to analyse the logistics strategy of Argentinian irms; Mollenkopf and Dapiran (1999, 2005) who used it to benchmark logistics capabilities and competencies in Australia and New Zealand; and Closs and Mollenkopf (2004) who compare the data collected during the 21st-Century Logistics Model with data collected by Mollenkopf and Dapiran (1999) in Australia and New Zealand. Others studies emphasize either in one speciic logistics competence (eg Richey, Daugherty and Roath, 2007), in logistics competence M01_KOVÁCS_4683_01_P01.indd 23 5/23/2016 5:20:29 PM 24 The Humanitarian Context as a whole (eg Bolumole, Frankel and Naslund, 2007; Peko and Ahmed, 2011) or in logistics competency building (eg Li and Lin, 2006). Surprisingly, no new models have been proposed or developed in recent years, mostly because studies apply either one of the frameworks presented above, or because they focus on a particular competence. Table 1.2.1 summarizes the most prominent works on this literature. Each logistics competence framework is presented, including the main reference, denoted by an asterisk (*), and the authors who carried out studies based on this framework. Subsequently, a list of the competences is presented as well as the capabilities that compose such competence. Table 1.2.1 Logistics competence frameworks Framework Authors World-Class Logistics Competency Model Positioning MSUGLRT (1995)*; Anderson Daugherty, Stank and Ellinger Integration (1998); Goldsby and Stank (2000) Shang and Sun (2004); Shang and Marlow (2005, 2007) Agility Stank and Lackey (1997) M01_KOVÁCS_4683_01_P01.indd 24 Competences Capabilities Strategy, supply chain, network, organization Supply chain unification, information technology, information sharing, connectivity, standardization, simplification, discipline Relevancy, flexibility, accommodation Measurement Functional assessment, process assessment, benchmarking Positioning Costumer focus, organizational control, organizational implementation Integration Connectivity, functional integration, information sharing, IT, supplier relations Agility Operational flexibility, personnel flexibility Measurement Activity-based costing, benchmarking, performance assessment 5/23/2016 5:20:29 PM The Case of Médecins Sans Frontières 25 Table 1.2.1 Continued Framework Authors Competences Capabilities 21st-Century Logistics Model Bowersox, Closs and Stank (1999)*; Mollenkopf and Dapiran (1999, 2005); Stank, Keller and Closs (2001); Carranza, Maltz and Antun (2002); Closs and Mollenkopf (2004) Customer integration Segmental focus, relevancy, responsiveness, flexibility Internal integration Cross-functional unification, standardization, simplification, compliance, structural adaptation Relationship integration Role specificity, guidelines, information sharing, gain/ risk sharing Technology and planning integration Information management, internal communication, connectivity, collaborative forecasting and planning Measurement integration Functional assessment, activity-based and total cost methodology, comprehensive metrics, financial impact Supplier integration Strategic alignment, operational fusion, financial linkage, supplier management A capability can be deined as ‘complex bundles of individual skills, assets and accumulated knowledge exercised through organizational processes that enable irms to co-ordinate activities and make use of their resources’ (Olavarrieta and Ellinger, 1997: 563). An important amount of research on strategic logistics is founded on the idea that logistics capabilities support different value disciplines (Snow and Hrebiniak, 1980). Morash, Dröge and Vickery (1996) present two main value disciplines, demand-oriented or customer-oriented and supply-oriented, and the different capabilities that compose these value disciplines. Based on a study on the perceived importance of strategic logistics capabilities for irm success, the actual implementation of such logistics capabilities, and measures of both irm performance and irm performance relative to competitors conducted in the US furniture industry, the authors found that delivery speed, reliability, responsiveness M01_KOVÁCS_4683_01_P01.indd 25 5/23/2016 5:20:29 PM 26 The Humanitarian Context and low-cost distribution are the key logistics capabilities for sustained competitive advantage. Later, Gilmour’s (1999) work proposes a framework to evaluate supply chain processes based on a set of capabilities, namely process capabilities, technology capabilities and organization capabilities, which incorporate the extent of integration and the use of associated technologies in the supply chain processes of an organization, and the degree to which logistics is used as a key element of overall strategy formulation and implementation. The author performed a study on six Australian consumer product and automobile manufacturers, inding that for the automotive industry, the customer dialogue-driven supply chain capability results in a high differentiation on the market. As for the consumer product industry, integrated information systems capability and integrated performance measurement capability are the market differentiation facilitators. The framework provides a benchmark for measuring the match with the organization’s logistics strategy and overall corporate strategy. Based on the MSUGLRT’s (1995) study, Lynch, Keller and Ozmet (2000) divided logistics capabilities into two groups, ie value-added service capabilities and process capabilities, following the expert panel’s beliefs that some are more important for achieving low costs, and others are more important for differentiation. The study, conducted in the North American (ie Canada, Mexico and the United States) retail grocery industry, showed a positive relationship between process capabilities and a cost leadership strategy, while value-added service capabilities have a positive impact in an organization’s differentiation strategy. Later, Zhao, Dröge and Stank (2001) use MSU’s framework to propose and test a model of the relationships among customer-focused capabilities and information-focused capabilities and irm performance. Based on senior logistics or supply chain executives in each North American-based manufacturing, wholesale/distributing and retail industry, a study conirmed that customerfocused capabilities are strongly related to irm performance. In 2004, Mentzer, Min and Bobbit categorized logistics capabilities based on the existing literature into four interfaces – namely demand management interface capabilities, supply management interface capabilities, information management capabilities and co-ordination capabilities – arguing that logistics capabilities demonstrate a irm’s competitive advantage through the management of stakeholder goals. The authors also recognize the important role of logistics capabilities in boundary-spanning interfaces between internal functional areas and between the focal irm and the supply chain partners. Later, Esper, Fugate and Davis-Sramek (2007) reveal the most frequently discussed capabilities in the literature, including customer-focused capabilities, M01_KOVÁCS_4683_01_P01.indd 26 5/23/2016 5:20:29 PM The Case of Médecins Sans Frontières 27 supply management capabilities, integration capabilities, measurement capabilities, and information exchange capabilities. Recent developments include the importance of logistics capability in the e-commerce market (Cho, Ozment and Sink, 2008), the contribution of capabilities to the logistics service providers’ competitiveness in China (Liu et al, 2010), the identiication of key logistics capabilities for international distribution centres (Lu and Yang, 2010), and the role of logistics capabilities as a source for competitive advantage in Swedish retail companies (Sandberg and Abrahamsson, 2011), among others. However, as it is the case for logistics competence, these recent studies do not include new insights but are rather conirmatory of previous literature. Table 1.2.2 summarizes the capabilities found in the literature (the capabilities are gathered by its focus or orientation, and no work is considered as main reference). Further, in logistics and SCM literature, lexibility appears simultaneously as a competence (Fawcett, Cantalone and Smith, 1996) and a capability (Bowersox, Closs and Stank, 1999; MSUGLRT, 1995; Mentzer, Min and Table 1.2.2 Logistics capabilities gathered by orientation Authors Orientation/Focus Capabilities Morash, Dröge and Demand-oriented Vickery (1996) Gilmour (1999) M01_KOVÁCS_4683_01_P01.indd 27 Pre-sale customer service, post-sale customer service, delivery speed, delivery reliability, responsiveness to target markets Supply-oriented Widespread distribution coverage, selective distribution coverage, low total-cost distribution Process Customer-driven supply chain, efficient logistics, demand-driven sales planning, lean manufacturing, supplier partnering, integrated supply chain management Information technology Integrated information systems, advanced technology Organization Integrated performance measurement, teamwork, aligned organization structure 5/23/2016 5:20:29 PM 28 The Humanitarian Context Table 1.2.2 Continued Authors Orientation/Focus Capabilities Lynch, Keller and Ozmet (2000) Process Zhao, Dröge and Stank (2001) Customer-focused Segmental focus, relevancy, responsiveness, flexibility Information-focused Information sharing, IT Mentzer, Min and Bobbit (2004) Value-added service Demand management Flexibility, responsiveness interface Supply management interface Total-cost minimization, efficient logistics processes Information management IT, information sharing, connectivity Bobbit, 2004), showing a lack of conceptualization of competences and capabilities in logistics literature. These and other discrepancies found in the literature make relevant the need for a deeper analysis on the deinition of competences and capabilities. Resource-based view From a historical point of view, the RBV is the result of Edith Penrose’s (1959) seminal work, where the author presents the key principles of the approach by considering that the irm’s resource ownership is what determines its competitive advantage in comparison to others. The main postulates of the RBV of the irm are that irms are a collection or a bundle of resources (Penrose, 1959; Wernerfelt, 1984) and that its capacity to create sustainable competitive advantage depends on its capacity to implement strategies that exploit its internal strengths (Barney, 1991). Most works of this stream aim to link resources with competitive advantage and to analyse the conditions to ensure sustainability. However, during the evolution of this new theory of the irm, a parallel stream was developed based on the concept of distinctive competence (Selznick, 1957), to refer to those activities that a irm does better in comparison with its competitors. M01_KOVÁCS_4683_01_P01.indd 28 5/23/2016 5:20:29 PM The Case of Médecins Sans Frontières 29 The 1990s witnessed an important evolution in the ield, mostly inluenced by the works of Prahalad and Hamel (1990), Hamel and Heene (1994) and Sanchez and Heene (1997), setting the basis for competence-based management (CBM), a stream that postulates that competitive advantage is achieved through the development and use of its capacity to deploy resources. The strategic management literature offers an important number of deinitions for both competence and capability concepts without achieving a consensus. For instance, Foss (1996: 1) deines competence as ‘a typically idiosyncratic knowledge capital that allows its holder to perform activities – in particular, to solve problems – in certain ways, and typically do this more eficiently than others’, while Sanchez and Heene (1997: 306) deine it as ‘an ability to sustain co-ordinated deployments of resources in ways that help that organization to achieve its goals’. Further, Hitt and Ireland (1986: 402) add the distinctive attribute to competence, deining it as ‘a irm’s ability to complete an action in a manner superior to that of its competitors or to apply a skill that competitors lack’, and Prahalad and Hamel (1990: 82) rather choose the core attribute and deine it as ‘the combination of individual technologies and production skills that underlie a company’s myriad product lines’. From this overview, it is possible to say that the term ‘distinctive competence’ refers to activities that a irm performs better than its competitors, while ‘critical’ or ‘core competence’ encompasses technological and production skills or expertise that enables the irm to implement a strategy. However, none of the above deinitions include the relation with a irm’s capabilities, a term that has been shown as to have direct relation with a irm’s resources. A capability is deined as the capacity for a team of resources to perform some task or activity (Grant, 1991), or a irm’s capacity to deploy resources (Amit and Schoemaker, 1993). These differ from core competences in the way that core competences, as presented earlier, emphasize technological and production expertise at speciic points in the value chain, while capabilities are more broadly based, encompassing the entire value chain (Stalk, Evans and Shulman, 1992). Another difference between competence and capabilities relies on the fact that capabilities are the mechanisms and processes by which new competencies are developed (Teece, Pisano and Shuen, 1997). The above deinitions make clear that most authors agree that capabilities refer to those skills, mechanisms, processes and knowledge that allow resources to be deployed and, when combined, create competencies. When regarded from a corporate perspective, competence refers to those functional areas, critical activities or organizational processes that differentiate an organization from its competitors, and through which the strategy of the organization is M01_KOVÁCS_4683_01_P01.indd 29 5/23/2016 5:20:29 PM 30 The Humanitarian Context implemented. Both competencies and capabilities can be regarded as critical, the degree of which will depend on its uniqueness, scarcity and dificulty to imitate, and the amount of superior customer value that such competence or capability can provide (Day, 1994). Finally, these two can be either core or distinctive; ‘core’ refers to the central role of a irm’s value-generating activities, while distinctiveness implies that customers can distinguish a irm from its competitors. Research design In light of the existing literature and the discussion presented above, this chapter was designed to explore the logistics competences and capabilities needed to ensure the success of relief operations from an organizational perspective. Previous studies on this topic in for-proit environments have almost exclusively used quantitative methods, the survey being the preferred one (eg Morash, Dröge and Vickery, 1996; Stank and Lackey, 1997; Lynch, Keller and Ozmet, 2000; Closs and Mollenkopf, 2004). This conirms Ellram’s (1996) observation that most empirical research in logistics that is based on quantitative methods is still valid. However, as pointed out by Halldorsson and Aastrup (2003), logistics as a discipline is experiencing a movement towards more qualitative methods. For instance, case study research has been used to investigate logistics competences and capabilities when exploration and in-depth analysis were targeted (eg Esper, Fugate and Davis-Sramek, 2007; Sandberg and Abrahamsson, 2011). This research was exploratory in nature and aimed to investigate an under-researched topic and, thus, the case study arose as a relevant research method given that ‘it provides depth and insight into a little-known phenomenon’ (Ellram, 1996: 97). Such is the case of logistics competences and capabilities for humanitarian relief. As stated by Meredith et al (1989), in order to better understand the phenomenon the researcher should be as close as possible to the context in which such phenomenon occurs. Therefore, the perspective of the actors involved on humanitarian relief was chosen as the suitable type of information used for this chapter. Purposive sample procedures and multiple data collection techniques (Eisenhardt, 1989; Yin, 2009) were used in the case study of MSF undertaken in this chapter. M01_KOVÁCS_4683_01_P01.indd 30 5/23/2016 5:20:29 PM The Case of Médecins Sans Frontières 31 Data collection and analysis The case study in this chapter is based on an international humanitarian organization that is known for its logistical excellence, and recognized for its ‘pioneering humanitarian work on several continents’ (The Nobel Foundation, 1999): Médecins Sans Frontières (MSF). The case study protocol and interview guide were built based on the previous literature review and the input from the head ofice of one of MSF’s supply centres in Bordeaux, France. A total of 27 semi-structured interviews were conducted in two separate locations – MSF’s headquarters in Paris and the Bordeaux supply centre – in a one-to-one setting following purposive sampling guidelines. The diversity of the sample was ensured through different dimensions, including job position (eg supply chain manager, production manager, procurement manager, transportation manager, purchasing manager, technical advisor, procurement oficer, freight operator, warehouse operator, ield logistics supervisor), tenure (6 months to 12 years), ield experience (eg emergency response, development programme, armed conlict, natural disaster), gender and race. Each interview was audiotaped and lasted approximately 35–80 minutes, in which interviewees answered open-ended questions on the logistics competences and capabilities found at MSF. Interviewees were asked to bring up examples from their ield experiences, searching for variety on the units of analysis possibly found in a single case study (Yin, 2009). The semistructured interviews allowed new elements to be considered and further investigated, avoiding researcher biases (Eisenhardt, 1989). In addition to semi-structured interviews, internal documentation and direct observation, as well as other informal exchanges (eg meetings, discussions, e-mails, etc) were included as sources of information, ensuring data triangulation (Voss, Tsikriktsis and Frohlich, 2002). Shortly after each interview, a process of selective transcription (Ochs, 1979) was conducted in order to eliminate the ‘muddle in the middle’ (Lapadat, 2000). The elements related to the context in which the interview took place were included in the process as ield notes. Following Ellram’s (1996) data analysis process, a irst phase of ‘open coding’ was carried out in order to identify, conceptualize and develop the irst categories of the results based on the insights from the literature review. Further, an ‘axial coding’ was performed to look for interactions between the results of the open coding. Finally, a ‘selective coding’ was completed for validation and further development of categories. The analysis of the data sources was conducted with the help of QDAS NVivo 8. M01_KOVÁCS_4683_01_P01.indd 31 5/23/2016 5:20:29 PM 32 The Humanitarian Context Research quality The study followed Lincoln and Guba’s (1985) concept of trustworthiness, aiming to respond to four criteria – namely credibility, transferability, dependability and conirmability. Credibility was ensured through a continuous check of the researcher’s interpretations of the indings with the head ofice and members of the organization. The use of multiple sources of evidence, multiple informants and two different sites allowed the study to achieve a high level of transferability. Dependability was accomplished through the use of written protocols for data collection and analysis, and the use of the QDAS for storage and systematic coding of the data. Finally, conirmability was addressed through the examination and evaluation of the indings by several scholars in previous versions of this research. Overview of the organization MSF is an international medical humanitarian organization that, for over 40 years, has provided assistance to populations in distress, to victims of natural or man-made disasters and to victims of armed conlict. Today, MSF provides aid in nearly 60 countries to people whose survival is threatened by violence, negligence or catastrophe, primarily due to armed conlict, epidemics, malnutrition and exclusion from health care or natural disasters. MSF is composed of ive operational centres (Amsterdam, Barcelona, Brussels, Geneva and Paris) and 19 sections (Australia, Austria, Belgium, Canada, Denmark, France, Germany, Greece, Holland, Hong Kong, Italy, Japan, Luxembourg, Norway, Spain, Sweden, Switzerland, the United Kingdom and the United States). In addition to this, MSF has two supply centres: MSF Supply (Belgium) and MSF Logistique (France), which offer logistical support to the different sections of the MSF movement and other NGOs such as Médecins Du Monde and the International Committee of the Red Cross. Results The primary objective of MSF is to respond to emergencies and to mitigate the suffering of populations at risk, through proper medical action reinforced by appropriate logistics (MSF, 2014a). However, this objective cannot be achieved without the help of other areas of expertise. The irst indings of the case study revealed that in addition to logistics and medical know-how, the organization’s experience in responding simultaneously to multiple M01_KOVÁCS_4683_01_P01.indd 32 5/23/2016 5:20:29 PM The Case of Médecins Sans Frontières 33 emergencies was perceived as one of MSF’s strengths. However, not surprisingly, logistics appeared as one of the pillars to achieve this capacity. Logistics competency at MSF During the 1980s, in response to an increasing demand from the teams in the ield, and the need to master a highly eficient supply chain made up of a series of links, all of them crucial – purchasing, inventory, quality assurance and shipment – MSF set up a supply centre (MSFLog) whose raison d’être is to provide missions with high-quality supplies, whether for emergency situations or normal operations (MSF, 2014a). MSF’s supply mission involves reliable and high-quality medical supplies (eg drugs and medical/surgical equipment), non-medical supplies (eg vehicles, water tanks and food) and transportation (timelines, insurance, etc). Over the past years, MSF has achieved what is considered by its members to be a logistics competency, gaining international recognition in this area, at the same level as that of their medical expertise. As stated by the warehouse operations manager: For MSF, logistics is the irst point that will contribute to the success of a good response to an emergency... We could even deliver the material without having a medical team in the ield and give this to other doctors different from MSF. The importance of logistics at MSF is also attested by the growth of this activity in the past years. From 2003 to 2014, MSFLog has almost doubled the number of delivered parcels from 131,259 in 2003 to 253,771 in 2014. This is the result of a strategic decision of expanding its warehousing capacity from 5,000 to 10,000 square metres, and to develop three decentralized warehouses (Dubai, Nairobi and Panama) to ensure the low management from the different sections (MSF, 2010). This allows the organization to increase its medical and logistics stocks, improving MSF’s capacity to respond to multiple crises, in different parts of the world at the same time. For instance, during the emergency response to the 2010 Haiti earthquake, 17 planes chartered by MSF helped in the delivery of equipment for the implementation of an inlatable hospital on an athletic ield of 7,000 square metres in the irst six days after the crisis hit. At the end of the irst month, the hospital consisted of 40 tents of which 13 were inlatable, including a triage room, an emergency room, an observation room, three operating rooms – including one reserved for osteosynthesis and clean surgeries, a sterilization section, a recovery room, an intensive care unit, several rooms of hospitalization, and a follow-up care and rehabilitation section. A speciic burn treatment centre with its dedicated operating room M01_KOVÁCS_4683_01_P01.indd 33 5/23/2016 5:20:29 PM 34 The Humanitarian Context was established in the third month of the intervention. In the words of the head of supply chain: We cannot be an emergency medical NGO with the level that we have without logistics... if we hadn’t built this (MSFLog), we couldn’t have responded to Haiti, it would be impossible! Logistics for MSF is thus considered as the ultimate competence that allows the organization to respond to humanitarian crises at the point that, given this case, MSF is capable of supplying all the required material to assist the populations in any scenario without sending their own medical teams to the ield. This is only possible through the deep understanding of the logistical processes and their transformation into capabilities and competences. Between competences and capabilities The MSF case study presents logistics as one of the pillars for the success of their operations, and is considered as essential for the medical activity. However, an important number of competences and capabilities are behind the notoriety of logistics. Technical capabilities Within logistics competency, technical capabilities are considered as important for the success of MSF’s operations. This reputation is the result of a process of professionalization of different activities throughout the supply chain. These capabilities represent each métier that constitutes the logistics of MSF. These include purchasing and procurement, supplier management, stock management, transportation management, warehouse management, order processing, operational lexibility, delivery and information management, among others. An example of this is provided by a freight operator, who explains the crucial aspect of his work: In the commercial environment, at the end you’ve got very few people who are faced with the chartering of aircraft, because these are completely outsourced: the forwarder subcontracts to the broker, the broker takes care of it, and so on. We like to do it directly with the broker and as we have these capabilities at MSF Logistique, and as we want to be sure that things are going well, we want to be sure that the aircraft matches our criteria selection, we want to choose the departure airport on the basis of price, we make a big analysis, we want to know exactly where it is going to land, we want to know the crew... a lot M01_KOVÁCS_4683_01_P01.indd 34 5/23/2016 5:20:29 PM The Case of Médecins Sans Frontières 35 of things that we pay attention to for an operational choice, the choice of this company or not, and so on. As it’s not easy to ind these capabilities outside, we develop them here! Throughout its history, MSF has expanded its logistics system with the functions required to ensure good medical practice. Today, the organization beneits from an important internal cohesion of logistics activities that go even beyond the borders the organization. Integration competence Logistics integration is crucial for the good unwinding of the operations. As the quality manager at MSF Logistique stated: The competence of a system is always superior to the addition of individual competences, and [this] is especially true for MSF. In order to ensure the delivery of the relief items requested by the teams on the ield, without errors and within a limited period of time, MSF relies on a set of capabilities that combined create a successful integration. It all begins with the identiication of the need expressed by the teams of the ield. Good-quality information allows the purchasers and supply oficers to ind the speciic products that respond to those needs, while freight and warehouse operators prepare what is necessary to smooth the transit between the supplier and the ield. This internal integration is explained through the role that information plays within the organization. The order-processing manager explains: It is mostly a co-ordination problem about how we communicate, how we will be able to understand that the information I have, if I keep it to myself, is useless, so it must be shared and shared quickly with maximum clarity, knowing that the other does not understand what he is told so one must be sure that the thing is understood and that the message went through. In some cases, such integration goes beyond the organization limits and reaches the suppliers, with whom the organization has built partnerships that beneit the overall supply chain. The cold-chain referent explains: In a moment we had a lot of cold-chain disruptions, and I made a set of speciications for new packages that were very restrictive. I made a tender and all suppliers told me ‘it’s too restrictive, it is useless’. Eventually, we worked together with our long-time supplier, we developed new packaging and we went from €100,000 of product destroyed in 2008 to less than €200 in 2010. M01_KOVÁCS_4683_01_P01.indd 35 5/23/2016 5:20:29 PM 36 The Humanitarian Context MSF’s operational structure enables downstream external integration (to some extent) with the organization’s irst customers, ie the teams on the ield, while the relation with some of its suppliers enables upstream external integration Adaptability competence For the year 2013, the operational portfolio was composed of 70 to 90 projects in 30 to 35 countries (MSF, 2014b). In some cases, a country’s situation leads to constraints that make it dificult (or even impossible) to access and therefore to supply the teams. In other cases, it is the nature of the emergency and scale that can make it dificult to deliver. To deal with all factors, the organization has developed a strong capacity to adapt to different contexts, types of emergency and requested volumes that generate very different logistic choices. The stock manager explains: For the Indian tsunami, it was several countries that were affected, in several areas. For Haiti, we had to intervene and the focus was mainly on the capital city at the beginning. It was much easier to manage than responding in several countries (Indonesia, Sri Lanka, etc) but it was very complicated. In fact [for the tsunami] we delivered, but we didn’t know the exact needs. In Haiti, I think it was much more measured. Now, in Kurdistan it was rather the extent... there were mountains illed with people, it was huge in terms of needs and the response was great in volume. Items sent from MSF Logistique: plastic, blankets... sometimes by plane; there was only one type of product, while in Haiti there were 500 or 600 different products per shipment. It was not at all the same logistics and it could not be apprehended in the same way. Upstream, the supply of products from the supplier can also result in constraints to which MSF’s logistics must constantly adapt. Product quality is the irst criterion for the choice of a supplier, while delivery time is very important. In addition to this, the weight in the relationship with the supplier is not on MSF’s side although MSF is an international organization recognized worldwide, and so the logistics must be able to perform its activity by adapting to the constraints imposed by its suppliers. This competence appears thus as multidimensional, with a irst ixed dimension that is the humanitarian context to which MSF has adapted, a second dynamic dimension related to the constraints of countries in terms of clearance times and even access, a third dynamic dimension linked to the complexity of the ield, a fourth dynamic dimension as a result of medical claims, and inally, a dynamic dimension upstream with the suppliers. In the words of the head of supply chain: M01_KOVÁCS_4683_01_P01.indd 36 5/23/2016 5:20:29 PM The Case of Médecins Sans Frontières 37 Logistics is like the top of a mountain. One side has all that is operational (programme deinition, medical choices, etc) and the other side has the entire industrial world with whom we are in contact, the commercial reality... Normally, these two worlds do not know each other, and we [logistics] act as a buffer between the requests from MSF and the reality of implementation. To deal with these two ‘worlds’, MSF’s logistics relies on its technical capabilities that complement other organizational capabilities. Responsiveness competence Since its creation, MSF has been present in most of the greatest humanitarian crises in history, bringing assistance to affected populations. Emergency response, precisely to natural disasters, has been from the beginning at the core of MSF’s work. What Rony Brauman, former president of MSF, considers as ‘culture’ or ‘know-how’ of the emergency, is what is seen as the responsiveness competence within the organization, an ability to respond quickly to any type of humanitarian crisis around the world, deploying different types of resources (physical and human) belonging to different professions (medical, logistics, water and sanitation, nutrition, construction, etc), by its own means, and without having too much impact on the course of the various programmes and projects. From high-media-coverage natural disasters to silent crises, from armed conlict to nutritional crises, MSF has shown that even with very limited access it is able to act and achieve its goal: to provide medical assistance to populations whose life or health is threatened. This capacity is achieved thanks to the responsiveness of the logistics system, which appears as the most important logistics competence within the organization. The procurement manager explains: If there is an emergency and no one has in stock what it takes – it can be 48 hours or the next day – you have to manage to ind a supplier that will be able to deliver in 24 hours. We did a lot of that for Haiti, because the freight department reserved entire aircrafts, ‘full charters’ who were leaving. For example, it was Monday and we had a ‘full’ that was leaving on Thursday, so it had to be charged on Wednesday. Here, on some missing items that we did not have in stock, we tried to negotiate with the supplier so that the products were charged on the plane, one way or another. So here it depends a lot on the supplier’s responsiveness, because if the same supplier makes us wait a half day... For the procurement, [the media coverage] helped us a lot, because many providers were engaged, saying ‘we want to do something for Haiti!’... I saw a manager of a big pharmaceutical company putting products in his car and taking them to DHL on Friday night. M01_KOVÁCS_4683_01_P01.indd 37 5/23/2016 5:20:29 PM 38 The Humanitarian Context Currently, MSF supply centres are able to respond to emergencies in 24 hours, and less than four weeks to regular ield orders. Such lead times can be considered ‘short’ within the constraints of the respective context. This responsiveness competence is due mainly to the capacity developed by the organization to prioritize emergencies. Discussion and implications At the end of this research, probably the most important result is that the success of humanitarian relief operations is achieved through the organization’s capacity to manage its logistical processes through the development of logistics capabilities and competences. This statement may not be revelatory, as most academic literature on humanitarian logistics puts forth the importance of logistics in humanitarian relief operations, but it constitutes a irst attempt to show the link between logistics and the success of humanitarian operations through capabilities and competences, based on empirical data. The importance given to logistics at Médecins Sans Frontières, considered as a pillar for the success of their operations, let us think that from an organizational perspective logistics for humanitarian relief can be considered as a strategic function through which the overall strategy of an organization can be drawn. For humanitarian organizations, and for the humanitarian community at large, the evidence of logistics as the foundation of humanitarian operations’ success represents an opportunity for the development of this activity towards a source for strategy. The MSF case study shows that logistics has the potential to be a strategic tool for the achievement of the organization’s goals, as is the case for many irms in the commercial sector. If logistics is integrated in the overall strategy of humanitarian organizations, this activity could represent a cornerstone for interorganizational humanitarian co-ordination, reducing the effort of international NGOs when responding to emergencies and allowing a much more eficient resource allocation to provide better support to continuous aid operations and silent emergencies. The case study results also presented a number of logistics competences and capabilities, among which responsiveness, adaptability and integration, as well as technical competences such as purchasing, procurement and transportation, were identiied as the most important competences and capabilities for the organization. These results represent a small but substantial contribution towards an organizational logistics competence and capability model for humanitarian relief, a subject that is seldom found in academic M01_KOVÁCS_4683_01_P01.indd 38 5/23/2016 5:20:29 PM The Case of Médecins Sans Frontières 39 literature. Moreover, the indings from the MSF case study provide a contribution to both logistics and SCM literature. The study of a context such as humanitarian relief provides insights that partially conirm the capabilities and competences found in most logistics competency models, but expands the knowledge on this topic to include competences and capabilities that are required in highly volatile environments and that can be used in industry. Further research on this topic is strongly encouraged through the replication of this study in other NGOs with similar characteristics (size, scope and logistics), in order to reine the results and improve the logistics competence and capability model. 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PM The Case of Médecins Sans Frontières 43 Acknowledgements The author would like to acknowledge Médecins Sans Frontières (the French NGO that accepted and supported this research work), and Professors Nathalie Fabbe-Costes and Marianne Jahre for their comments on previous versions of this research. M01_KOVÁCS_4683_01_P01.indd 43 5/23/2016 5:20:29 PM M01_KOVÁCS_4683_01_P01.indd 44 5/23/2016 5:20:29 PM