Supply Chain Lessons from Haiti

This is an excerpt of the original article. It was written for the September-October 2010 edition of Supply Chain Management Review. The full article is available to current subscribers.

September-October 2010

You’re the Top!” In addition to being a great Cole Porter song, it’s a sentiment all of us would like to hear both in our personal and professional lives. Let’s take the professional perspective here. Looking at things from a supply chain perspective in particular, just how do you get to be considered “the top”? You’re the Top!” In addition to being a great Cole Porter song, it’s a sentiment all of us would like to hear both in our personal and professional lives. Let’s take the professional perspective here. Looking at things from a supply chain perspective in particular, just how do you get to be considered “the top”?

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With the dust from the collapsed buildings still in the air, the first medical support available was the doctors and nurses who survived the earthquake or arrived from remote clinics. Setting up basic field hospitals in tents and undamaged buildings, they had to recreate the logistics infrastructure to support a vast medical and humanitarian relief operation—while waiting for the world to respond.

Surveying the devastation everywhere they could see, their hearts sank as they realized the enormity of the challenges: clearing runways and roads for relief supplies to arrive and be distributed promptly; locating depots for storing medicines, water and food; setting up clinics where they would be most effective most quickly. In effect, relief teams had to set up an entire supply-chain infrastructure in practically no time at all—and with largely volunteer resources.

On Jan. 12, 2010, Haiti was hit by a magnitude 7.0 earthquake with its epicenter about 25 kilometers from the capital, Port au Prince. The quake set off one of the worst humanitarian crises in recent history. An estimated 230,000 people died as a direct consequence of the quake, with an estimated 300,000 injured and 1 million made homeless. Haiti was already the poorest country in the Americas, ranked 149 out of 182 on the UN Human Development Index. Its state institutions were incapable of responding effectively to the catastrophe, with a disproportionate burden falling on international humanitarian agencies.

McKinsey & Company has worked pro bono in Haiti since the earthquake, helping manage both the immediate response and the long-term reconstruction. This support draws heavily on our experience in post-disaster response in New York following the Sept. 11, 2001 terrorist attacks, in Indonesia and Sri Lanka following the 2005 tsunami, in Louisiana after Hurricane Katrina, in China’s Sichuan province after the 2008 earthquake, and in response to other natural disasters around the world.

This article focuses on activities with NGOs (non-governmental organizations) that were working in healthcare in Haiti before the quake. As such, it addresses the transition from “business as usual” to disaster response and on the changes in management, process and network that were required to cope. It seeks to identify broader lessons for organizations—commercial enterprises included—whose supply chains have to respond rapidly to major unexpected demand and supply situations or quickly set up supply chain operations in emerging economies. The principles that should guide an organization’s response in a crisis show striking similarities to those that make any challenging supply chain successful.

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