CHSCM 3.0 - Unit 1 - SCM in the Humanitarian World

There is an important relationship between the supply chain response time and the beneficiary
delivery time which we will now explore. In Module 2, we looked at decoupling points, and now we
will consider the importance of decoupling points within humanitarian operations.
If the beneficiary delivery time is equal to, or greater than, the supply chain response time, we can
wait for the product request, order it from the supplier, move it through the supply chain, and
deliver it without having to hold stock at any point. This is shown in the diagram below as situation
1.
It is likely that the beneficiary delivery time would be long in this case and, consequently, could cause
problems. The level of uncertainty in this situation is low. We know what is required in sufficient
time to be able to operate our supply chain to deliver it on time.
The second situation in the diagram shows the position when the beneficiary delivery time is shorter
than the supply chain response time. In this situation it would not be possible to wait for the
request for goods from the beneficiary, and then process it and move it through the supply chain
quickly enough for the goods to arrive by the desired time. This is problematic.
The solution to this situation is to hold stock at a point in the supply chain that enables delivery of
the goods within the delivery time. In order to have stock available, the organization will have to
forecast, or anticipate, the requirement. Sometimes the difference between supply chain response
time and beneficiary delivery time is called the uncertainty gap, and forecasts must be produced for
the duration of this time. In many cases this uncertainty gap could be quite long, creating difficulties
in producing an accurate forecast.