Strengthening Resilience of Supply with Essential Goods through Public-Private Emergency Collaborations: Challenges and Incentives

Private actors ensure the supply of essential goods such as food, drinking water, and medicine to the population. However, crises such as natural disasters, human-caused conflicts, or pandemics can cause disruptions of private supply chains and, subsequently, supply shortages in the market. In this case, public actors need to become active and responsible for supplying the population with essential goods. Nevertheless, the ability of public actors to provide essential goods in a crisis is constrained due to limited resources and a lack of knowledge about the relevant commercial supply chains. Therefore, companies that produce, distribute, or sell essential goods can be valuable partners but must be adequately motivated to participate in crisis management. A promising form of collaboration to strengthen resilience lies in the concept of public-private emergency collaborations (PPECs), elaborated in different studies within the dissertation. The necessity of PPECs and their public acceptance depends on the attitude and preparation of the population, which is why the empirical investigation of these accompanying questions is another central part of the dissertation. Five studies published as companion articles address necessary prerequisites and approaches to the design of collaborations in crises: Study A examines the PPEC concept and puts it into a more specific framework, considering logistical requirements in a game-theoretic model. The model addresses private actors’ incentives to collaborate, such as a positive reputation or learning effects for internal processes. Both can provide a substantial —- not least financial —- advantage for the company in the long run. Study B investigates crises and PPECs from a company perspective by evaluating an empirical study with 398 responses from essential goods and logistics companies. The results show companies’ high interest in participating in PPECs. Nevertheless, the data reveals that certain conditions, such as adequate compensation or consideration of companies’ operational procedures, must be fulfilled for collaboration with public actors. Study C addresses the attitude of the population in a survey of 402 randomly selected participants and finds that the population highly values companies’ involvement in PPECs. The companies’ communication strategy and the population’s risk perception affect the attitude. Study D analyzes the stockpiling behavior of the population in two door-to-door surveys, the first with 330 participants and the second with 402. The timing of the before-and-after survey provides a special value: The study considers possible changes due to the COVID-19 pandemic. The results show low stockpiling levels and that stockpiling has only marginally increased during the COVID-19 pandemic. Study E examines an economic experiment with 262 participants in 13 sessions to clarify the importance of safety-stock levels for companies’ reputation in a failure-prone supply chain. The design made it possible to disentangle indirect losses due to customer churn and direct losses due to disruptions, thus quantifying firm reliability and customer loyalty. Four general recommendations for the stakeholders in crisis management, public actors, private actors, and the population, are derived: First, all stakeholders must adapt their behavior and improve current protection measures and strategies against global crises and supply chain disruptions. Second, humanitarian crisis management is a team effort involving many actors. Therefore, understanding synergies, mutual attitudes, and the incentive constellation of the actors involved is a crucial prerequisite for success. Third, crisis management also includes the right communication strategy. It is not only important to contribute but also to communicate it in a successful and convincing way. Fourth, collaborative approaches, as in PPECs, where each stakeholder brings his or her strengths into the collaboration, are beneficial for all parties involved, and increase society’s overall resilience. Consequently, this dissertation provides valuable insights into the status of humanitarian crisis management from the perspective of different stakeholders. It offers the potential to improve this field of research through collaborative approaches, as in PPECs, addressing the strengths and incentives of stakeholders accordingly

On the Value of Accurate Demand Information in Public-Private Emergency Collaborations

In cases where the private sector struggles to cope with the impact of a disaster, authorities try to reduce the burden on the population and set up supply chains to distribute essential goods. Therefore, they estimate demand and location of the affected people and open points of distribution to supply goods from, e.g. public buildings or sports facilities. However, the location of these points of distribution depends heavily on accurate demand estimations. Combined with a high time pressure that prevents the collection of detailed data, inefficient decisions result. However, these decisions improve significantly if private actors share their market knowledge. Since this information is strictly confidential for companies and at the same time requires a lot of coordination effort from public actors to acquire, the quantification of the benefits of the collaboration is important for both sides. Moreover, the time at which the information is received and the way the information is utilized regarding different intervention intensities is supposed to be crucial. Therefore, we develop a framework to quantify the consequences of shared information for both actors and apply it to a case study for a tap water contamination in the city of Berlin. We highlight that both actors benefit from the collaboration and that the time the information is received has a comparably low effect on the total supply. Moreover, we show that private actors can reduce the impact of market interventions on their processes significantly by actively collaborating with authorities

A Novel Approach to Include Social Costs in Humanitarian Objective Functions

Social cost functions in humanitarian operations are defined as the sum of logistics and deprivation costs. They are widely regarded as appropriate objective functions, even though the way they were introduced requires cautiously formulated deprivation cost functions for the analyzed goods and do not allow decision makers to include their individual preferences. We develop this approach further and introduce a normalized weighted sum approach to increase decision makers\u27 understanding of the tradeoffs between cost and suffering and, therefore, increase transparency significantly. Furthermore, we apply the approach to a case study of a hypothetical water system failure in the city of Berlin. We show that the normalized weighted sum approach significantly improves transparency and leads to a deeper understanding of the tradeoffs during the crisis. Consequently, it proved itself as a powerful tool for decision makers preparing for or navigating through a crisis

Public-Private Collaborations in Emergency Logistics: A Framework based on Logistical and Game-Theoretical Concepts

Collaboration in emergency logistics can be beneficial for governmental actors when supply chains need to be set up immediately. In comparison to research on humanitarian-business partnerships, the body of literature on so-called Public-Private Emergency Collaborations (PPEC) remains scarce. Private companies are only rarely considered within research on emergency collaborations, although they could contribute to a more efficient supply of goods given their resources and existing communication networks. Based on this research gap, this paper develops a logistical and game-theoretical modeling framework for public-private emergency collaborations. We characterize both public and private actors\u27 possible roles in emergency logistics based on literature research and real cases. Furthermore, we provide an overview on existing PPECs and the challenges they are confronted with. The concluding framework contains aspects from humanitarian logistics on the governmental side and from business continuity management (BCM) or corporate social responsibility (CSR) on the commercial side. To address the challenge of evaluating different objectives in a collaboration, we add a game-theoretical approach to highlight the incentive structure of both parties in such a collaboration. In this way, we contribute to the research field by quantitatively evaluating public-private collaboration in emergency logistics while considering the problem-specific challenge of the parties\u27 different objectives

On the combination of water emergency wells and mobile treatment systems: a case study of the city of Berlin

A shortage of water leads to severe consequences for populations. Recent examples like the ongoing water shortage in Kapstadt or in Gloucestershire in 2007 highlight both the challenges authorities face to restore the water supply and the importance of installing efficient preparedness measures and plans. This study develops a proactive planning approach of emergency measures for possible impairments of water supply systems and validates this with a case study on water contamination in the city of Berlin. We formulate a capacitated maximal covering problem as a mixed-integer optimization model where we combine existing emergency infrastructure with the deployment of mobile water treatment systems. The model selects locations for mobile water treatment systems to maximize the public water supply within defined constraints. With the extension to a multi-objective decision making model, possible trade-offs between the water supply coverage and costs, and between the coverage of differently prioritized demand points are investigated. Therefore, decision makers benefit from a significantly increased transparency regarding potential outcomes of their decisions, leading to improved decisions before and during a crisis

The attitude of the population towards company engagement in Public–Private Emergency Collaborations and its risk perception — A survey

Governmental actors benefit from collaboration with companies in emergencies. Even though there are good reasons for companies to support state disaster response, research on so-called Public–Private Emergency Collaborations (PPEC) is still rare. In particular, companies are currently unable to assess to what extent the population values their involvement in such PPECs. We characterize corporate social responsibility (CSR) concepts, emergency cooperation and risk perception from a structured literature research. A survey of 402 participants examines the perception of consumers to link CSR and the associated involvement in emergency cooperation with the economic success of the company. We find that companies’ involvement in PPECs is in general highly valued. Nevertheless, the quality and quantity of corporate communication as well as the communication channel used and the communication strategy strongly affect the population’s perception. In addition, we uncover a highly significant correlation between risk perception and approval of engagement in PPECs. We are contributing to the underexplored field of research by evaluating the involvement of companies in PPECs from the perspective of the population, to take account of the decision-makers in companies as to whether an involvement can be advantageous for them in the long term

Public-private collaborations in emergency logistics: A framework based on logistical and game-theoretical concepts

Collaboration in emergency logistics can be beneficial for governmental actors when supply chains need to be set up immediately. In comparison to research on humanitarian-business partnerships, the body of literature on so-called Public–Private Emergency Collaborations (PPEC) remains scarce. Private companies are only rarely considered within research on emergency collaborations, although they serve as an important chain in the efficient supply of goods given their resources and existing communication networks. Based on this research gap, we contribute to the research field by quantitatively evaluating public–private collaboration in emergency logistics. A framework for public–private emergency collaborations is developed based on logistical and game-theoretical concepts. In addition, we characterize both public and private actors’ possible roles in emergency logistics based on literature research and real cases. Furthermore, we provide a structured overview on existing PPECs and the challenges they are confronted with. The game-theoretic PPEC model created in this paper provides more detailed information into the motivation and incentives of the partners involved in emergency collaborations. Inspired by game-theoretic accounts of conventional public–private partnerships, this model sheds light on the partners’ participation constraints (which define the scope of collaboration), the effects on the outcome if the partners’ contributions are strategic substitutes, and on reputational effects. Finally, we illustrate how a mechanism design approach can be used by the state to transform the firm’s incentives into lower levels of undersupply or deprivation