Master of Advanced Studies
in Humanitarian Logistics and Management


Optimizing UNICEF’s Global Warehouse Hub Structure - E.S.

Review of alternative options for locations for global pre-positioning of supplies at UNICEF.

by Patrick Van der Laan


Executive Summary

This thesis is about applying logistics theory and pre-positioning concepts to global warehouse hubs and, in doing so, offering the United Nations Children’s Fund (UNICEF) and its Supply Division a fresh and timely perspective on their current global warehouse hub structure.

UNICEF’s Supply Division is currently in the process of identifying a suitable alternative location(s) for the global pre-positioning of supplies and kit-packing activities. The intention of this thesis is to demonstrate that the use of theoretical optimization concepts can aid UNICEF in making informed decisions that positively enhance its warehousing and international logistics functions across the board by resulting in better cost and lead time performance. The research and analysis for the purpose of this thesis were used to promote discussions within UNICEF about the need for a solid quantitative data analysis underneath decision-making processes that involve prepositioning of stock, including on the development of a set of well-defined criteria that can be applied in the further assessment of possible alternative locations identified through the quantitative analysis.

The literature review section of this paper touches upon available theory and practices on pre-positioning of supplies both in the business and the humanitarian development sectors, while focussing on obtaining information on available quantitative methods that support pre-positioning decisions. A key element in the approach is the application of the so-called ‘Centre of Gravity’ concept. The use of this concept in a global pre-positioning context was certainly new to UNICEF and offered the needed fresh perspective. The methodology section explains in more detail how the Centre of Gravity concept was applied to UNICEF’s global warehouse flows and how it was adjusted to make it valuable to UNICEF’s international logistics context and feasible in terms of its practical application.

Data on deliveries of programmatic and emergency supplies from UNICEF’s global warehouse hubs for a five year period from 2012 to 2016 were gathered, organized and used in the application of the concept.  The analysis provided for a wealth of information and contributed greatly to obtaining more insight and understanding of the global flows between global warehouse hubs and recipient countries as represented through their respective ‘ports of discharge’.

In terms of the direct results stemming from the application of the CoG concept, UNICEF now knows that the center of gravity for all its global deliveries from pre-positioned stock locations lies in civil-war torn South Sudan. While this does neither provide for the ideal spot in terms of political stability and security nor for easy access through well-established seaports, it does provide for valuable knowledge and understanding that so far did not exist.

When the application of the CoG concept was expanded from establishing one global centre of gravity to a more practical, regional approach for the regions presenting most of the supplies delivered, it was found that the centres of gravity for the West and East Africa regions lie in Ivory Coast and just of the coast of Zanzibar respectively. These latter two locations have provided UNICEF with two good starting out points for further analysis and assessment whether any ports can be identified that would provide for optimization of the current hub structure by adding one or possible two hubs on either side of Africa.

The criteria used in that identification process of suitable locations were developed in close consultation with Supply Division management and provided for a second tier of data analysis during this thesis process. The exchange with management based on the first data results provided for an interesting process that shows the complexities of the decision-making process, involving numerous trade-offs between geographical proximity on the one hand and infrastructure, capacity, scale and local market conditions of potential port locations on the other.

Throughout the design of the research and the actual work of applying the CoG formula to the data, there has been an increasing notion that the application of the Centre of Gravity concept forces a more holistic approach towards global pre-positioning of stock by UNICEF. By its nature, the formula required the integration of all global recipient data and their weight in terms of the volume (or ‘load’) these represent prior to performing any calculations. In doing so, the temptation to look at certain potential hub locations in isolation or to turn to certain recipient regions already at the start of the optimization efforts was avoided. In this way, the risk of sub-optimal decision making, in the absence of a proper and more complete bird’s eye view having been obtained first, was minimized and a comprehensive and well-quantified basis for UNICEF’s further decision-making processes was created instead.


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