Evaluation of the supply chain network design at United Nations Population Fund (UNFPA) - Through the development of a performance measurement system

Abstract: Background: UNFPA is a subsidiary organ to the United Nations (UN) with a primary focus on population and development strategies, sexual and reproductive health and gender equality. In March 2005 the UNDP/UNFPA Executive Board had realized that for the UNFPA Procurement Services Branch (PSB) to operate in line with its mission, focus would need to be directed specifically towards improvements in the areas of procurement, supply and logistics. Several studies were conducted that resulted in a recommendation to implement regional warehouses. However, the conclusion of the studies was that further quantitative analysis was needed in terms of performance measures for transportation, warehousing costs and lead-times to make an informative decision. PSB now has an opportunity to utilize United Nations Humanitarian Response Depots (UNHRDs) as regional warehouses. Purpose: The purpose of this study was to develop a performance measurement system for PSB’s supply chain network design. In addition, the purpose was to use the performance measurement system in an evaluation of the alternative supply chain network design with regional warehouses. Research questions: 1. Which performance measures need to be considered when developing a new performance measurement system for PSB? 2. Should PSB keep its current supply chain network design or switch to a supply chain network design with regional warehouses in the UNHRDs? Method: First, exploratory interviews were held to get an understanding for PSB, its supply chain and where to direct the focus for this study. Second, several interviews were held with employees at PSB regarding PSB’s supply chain, supply chain strategy and performance measurement system. A performance measurement system could thereby be developed through these interviews and the frame of reference developed for this study. Third, order data from PSB’s information was used to determine the performance for the current and alternative supply chain. Finally, the performance of the two supply chain network designs was compared and a recommendation regarding PSB’s supply chain network design was presented. Conclusions: A new performance measurement system was developed for PSB. It was developed to contain measures from the three categories; resource, output and flexibility. The developed performance measurement system was used to analyze and compare the current supply chain network design to a supply chain network design with regional warehouses in the UNHRDs. It was found that the supply chain network design performed better or equal to the current supply chain for 11 out of the 13 performance measures. The supply chain with regional warehouses scored high in the areas that PSB had expressed as important to their strategy such as freight performance, responsiveness and customer satisfaction. All regional warehouses except for the one in Brindisi were found suitable. Therefore, the authors recommend PSB to start utilizing the UNHRDs in Accra, Dubai, Panama and Subang.