WASH Cluster Stockpile project 5, phase 3 Supply Chain and Operating Concept Design and Implementation

Martijn BlansjaarLaura Rock Kopczak

April 08, 2011

WASH StockpileApril 2011 update and key issues

This session

1) Recap of previous phase outcomes.2) Current work.3) Key design issues and decision

Phase 2 Objective

Design the best feasible supply chain and operating concept for a proposed WASH Cluster emergency materials stockpile and prepare the implementation of a 2 year pilot.

Design principles

• WASH cluster agreed-upon standard items and modules to meet full set of WASH needs

• Pre-funded interagency stockpile and transport and replenishment costs

• Trigger and allocation done by the WASH cluster• Fast decision-making and execution result in

early response• Leverage of existing proven logistics processes of

WASH agencies to support this new approach

WASH Stockpile Processes

Trigger Deploy Use

Replenish

FOCUS OF PHASE 2

Donor

Funding

Technical

Specification and

Input to Sourcing

Materials: Six ModulesReference

s Hygiene Sanitation

Water treatment

Water trucking

Water storage & distribution

There are six modules. Each module is composed of several items. The entire kit of six modules will be deployed.

The global stockpile consists often units of each module. Each unit supports 5,000 beneficiaries. The Global stockpile supports 50,000Beneficiaries.

The minimum deployment quantity Is two units of each of the six modules – enough to support 10,000 beneficiaries.

Annual Demand Scenario

• 1 big emergency (50K)– 50% chance in Africa and 50% in Asia– May hit anytime throughout the year

• 3-4 small/medium emergencies totaling 45,000– 2 in Africa– 1 in Asia– 1.5 in Latin America

The stockpile inventory is expected to turn over approximately twice a year.

Recommended Oxfam – IFRC supply chain.

Procurement Storage &dispatch

Local receipt &dispatch

UPSTREAMSUPPLY CHAIN

DOWNSTREAMSUPPLY CHAIN

IN-COUNTRYSUPPLY CHAIN

Engineering

IFRC LRMD Strengths:Regional locations,Storage and dispatch on behalf of NS’s,Innovative supply chain

IFRC LRMDStrengths:In-country presence through Nat. Societies. .

Oxfam Strengths:Supplier relationships, Procurement,Engineering support,Field knowledge,Sells WASH items to other agencies.

Key issues under discussion at end of Phase 2

1. Stock ownership2. In-country receipt3. Contracts and funds flows4. Reporting

Project Organization (Phase III) WASH Steering Committee (Oversight)

Jean Lapegue, Action Contre la Faim Paul Shanahan , CareMark Buttle, Save the ChildrenLuke Dokter, NCAWilliam Fellows, UNICEF

Paul Molinaro, UNICEF Supply Division (advisor)

Project Manager

Martijn Blansjaar/Oxfam mblansjaar@oxfam.org.uk

Consultants Laura Rock Kopczak/ MIT-ZaragozaSander de Leeuw/ Vrije Universiteit Amsterdam

kopczak@stanfordalumni.orgsleeuw@feweb.vu.nl

Current Status

• IFRC agreed to collaborate with Oxfam on the supply chain.

• A mini-pilot project was funded in December 2009, as a practical continuation of detailed preparations and ‘road-test’ of the scheme so that it will be “ready to go” and “proven”.

• It was envisioned that the mini-pilot would be done in parallel with donor consultations.

• ‘On hold’ during 2010

Mini-Pilot Activities Objectives • To ensure all systems developed (upstream

&downstream) for the Global WASH Cluster Stockpile - complete the detailed design of an agreed interagency Global WASH Cluster stockpile procurement and delivery mechanism and complete a full trial run (‘mini-pilot’). This includes provision of a limited amount of WASH material to an implementing agency through the WASH Cluster coordination in an actual emergency response.

Three Sets of Activities to Realize the WASH Stockpile

Develop andPilot

Program Processes

DevelopAnd Pilot Supply Chain

Processes

Obtain Funding To Run theStockpile

For 2-3 Years

Mini-pilot Project

Activities Required

• Complete demand & transport analysis

• Definite design & physical location choice

• Agreed stock ownership and transfer

• Contract and fund-flows between participants established

• Information flow and management agreement

• Limited amount of material bought, stored and delivered

• Trigger process• Allocation process• Reporting process /

measuring success

• Donor consultations• Funds flow and

financial reporting worked out

• Donor proposal for main 3-year pilot completed (and agreed…)

Program LogisticsEngagement Of Donors

Design choices

Regional WASH Stockpile

Dispatch Receipt

Customs

Use

Three Options to Consider

Start: one consolidated shipment made by air.

OPTION 1 Direct Shipment (Multiple Consignees)Allocation Before Dispatch

Shipment Through an Intermediate Agency (Single Consignee)

OPTION 2 Single ConsigneeAllocation Before Dispatch

OPTION 3 Single ConsigneeAllocation After Receipt

OPTION 1 – Direct ShipmentMultiple Consignees, Allocation Before Dispatch

Requirements: Each consignee = agency to whom WASH has allocated…• Is registered in-country• Will use the goods in their own program; may decide themselves to

transfer some goods to their own partners• Formally & practically is able to take ownership, receive, import,

store & move goods• Can get tax exemption• Will not charge a fee to the scheme• Will guarantee and report on use to donors and host government

Limitation: Import and tax exemption paperwork must be done by each consignee before dispatch. If one agency is late with paperwork, shipment/receipt/use of the whole cargo may be delayed.

OPTION 2/3 – Shipment Through An Intermediate Agency

Requirements – the single consignee:• Is registered in-country• Formally & practically is able to take ownership, receive, import, store & move

goods and hand them over to other agencies• Can get tax exemption• Will charge a reasonable fee• Will guarantee and report on use to donors and host government

Requirements – the “allocated” agencies:• Are registered in-country• Will use the goods in their own program• Will not charge a fee to the scheme• Will guarantee and report on use to the single consignee

Limitation: Documentation of ownership transfer, liability, unproven concept

Three Options: Legal Differences

START: One consolidated shipment will be made by air.

OPTION 1 Direct Shipment (Multiple Consignees)Allocation Before Dispatch

Shipment Through an Intermediate Agency (Single Consignee)

OPTION 2 Single ConsigneeAllocation Before Dispatch

OPTION 3 Single ConsigneeAllocation After Receipt

The consigneesguarantee and reporton proper use.

The single consignee guarantees and reportson proper use. ??

The single consignee guarantees and reportson proper use. ??

Three Options: Logistical Differences

START: One consolidated shipment will be made by air.

OPTION 1 Direct Shipment (Multiple Consignees)Allocation Before Dispatch

Shipment Through an Intermediate Agency (Single Consignee)

OPTION 2 Single ConsigneeAllocation Before Dispatch

OPTION 3 Single ConsigneeAllocation After Receipt

The single consignee stages and delivers/hands over goods

Consignee stores and delivers/ hands over goods as theyare allocated, in effect, running a warehouse.

Goods flow directly toconsignees.

Comparison of the Three OptionsDirect Shipment(ABD)

Single Consignee(ABD)

Single Consignee(AAR)

Early dispatch (no delays in dispatch due to agencies not creating their paperwork on time)

- - - +

Guarantee of proper use and reporting lie with using agencies

+ + - - - -

Consignee(s) are willing to guarantee proper use

+ + ? ?UNICEF unwilling

? ?UNICEFunwilling

Likely management/donation fee charged by consignee(s) for assuming that role

0% 10% UNICEF 10% UNICEF

Quick handover to using agencies, once goods clear customs

+ + + + +

Goods can be allocated bit by bit - - - - + +

Goods will all be allocated + + + + - -

Recommended Next Steps for Mini-Pilot

Proceed with the mini-pilot using the “Direct to Consignees” approach with allocation before dispatch.

Next steps

Mini-pilot TOR covers logistics activities Program Logistics Engagement of Donors

Feb-March

Define trigger criteria and process.Define allocation criteria and process.Define in-country receipt process.

Finalize specs, markingSolicit quotes for non- Oxfam partsSet up process for receipt and pre-positioning.

April-May

Define reporting process.

Order and receive items.Define dispatch and transport process.

Develop donor proposal presentation and have first meetings with potential donors.

July-Aug

Dispatch, use, evaluate, report.

Dispatch, evaluate, report.

Sept-Oct

Develop follow-up presentation and have second meetings with donors.

Covered by Minipilot TOR