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ASU professor helps humanitarian groups ease global suffering more efficiently

Inventory, fleet management key for humanitarian groups' costs, effectiveness.
July 11, 2019

Operations expert's research helps organizations solve complicated problems

When suffering happens anywhere in the world, humanitarian organizations rush in, providing food, shelter and medical supplies. Research by an Arizona State University expert has found that these charities could better utilize their assets — and reduce human distress — with more precise planning.

Mahyar Eftekhar, an assistant professor in the W. P. Carey School of Business at ASU, is an expert in operations management and has long studied how humanitarian organizations can be more efficient.

His most recent paper, published in Production and Operations Management, found that these groups, which typically have uncertain budgets and work in extreme conditions, would save money and reach more people by more precisely prioritizing missions and better planning the use of vehicles.

Eftekhar said that the discipline of operations management looks to answer questions at a very detailed level.

“When we talk about economics, we are talking about high-level questions,” he said. “But operations management is a discipline that considers the details.”

“In this study, the goal was to show good policy for these organizations in practice,” he said.

“Lots of these organizations just chase the demand regardless of what happens in the future, so they don’t reserve capacity. In this study we tell them how they should reserve capacity for more important and critical missions.

“This is the big difference from what these practitioners are actually doing.”

Eftekhar researches response to different types of disasters. Emergencies, for example, include events like floods and earthquakes in which organizations must operate at maximum capacity to reduce human suffering as much as possible. He previously researched how media attention influences donations and cooperation among charities after a big disaster.

The most recent paper deals with development programs, which are ongoing relief of long-term crises like poverty and lack of access to education or medicine.

“These organizations are there to hopefully increase living standards. They operate in the long term. They want to build schools and distribute health supplies,” he said.

Eftekhar and his co-authorsThe other authors on the paper were Milad Keshvari Fard of HEC Montreal and Felix Papier of ESSEC Business School in Cergy, France. created an operations model based on the use of trucks and then tested it with data from a real relief agency that operates around the world. They wanted to answer two questions: How many vehicles should an organization have and how should the vehicles be deployed?

“When these organizations are in the field, they need different types of assets to operate — vehicles, computers, power generators, motorbikes, water-purification systems,” he said.

They chose vehicles for the model because they’re expensive, subject to environmental conditions like weather and roads, and they depreciate in value.

“Fleet management is the second-most expensive portion of humanitarian operations in the field after personnel,” he said.

The policy model helps organizations differentiate between mission types as well as how to purchase and deploy vehicles more efficiently.

“Based on what we learned from what they do and from the costs and benefits of the decisions they make, the conclusion we have is that they should not be assigning all their capacity to all demands in all periods,” he said. “They must be frugal and assign limited capacity to the most critical missions and reserve some capacity for the future.”

Eftekhar has developed relationships with humanitarian organizations to research workable solutions to their complicated operational problems. He recently finished a project for Catholic Relief Services, which was struggling with inventory management in relation to rapid-onset disasters.

“They said, ‘We don’t know what will kind of disaster will happen next, at what magnitude or which country. So we don’t know how many relief items to keep in our warehouse,’” he said.

The organization could keep a low supply of food, shelter, water and medical items and take a chance on buying in the open market when disaster hits, or it could maintain a higher supply itself.

Eftekhar worked with two colleagues and presented an inventory formula to the organization’s headquarters recently. The group is considering whether to adopt the model.

He’s also working with St. Vincent de Paul in Phoenix on a policy to manage their volunteers.

“What we are trying to do in most of these situations is try to understand a local problem very well and then try to find a kind of global solution that can be shared,” he said.

“This is not easy, and that’s why each project might take years.”

Top image by Pixabay

Mary Beth Faller

reporter , ASU Now

480-727-4503

 
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Amazon Prime Day: ASU professor says online shoppers value convenience over environment

July 12, 2019

One of the biggest shopping days of the year is fast approaching.

Amazon Prime Day, taking place on July 15 and 16, offers shoppers the chance to buy items online at discounted prices, for 36 hours only. Launched by Amazon in 2015, Prime Day has grown into a worldwide event that in 2017 generated over $1 billion in sales for businesses on Amazon.

But whether you’re stocking up on the latest electronics or starting your holiday shopping early, all those purchases come with an environmental cost. From the fossil fuels used to transport goods, to the paper and plastic packaging, online shopping takes a toll on the environment.

To better understand how goods arrive at your door, what happens when they get returned, and how these transactions affect the environment, ASU Now spoke with Dale Rogers, professor of logistics and supply chain management at the W. P. Carey School of Business at Arizona State University.

Question: What is the environmental impact of online shopping and returns?

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Dale Rogers

Answer: There are some concerns that as we increase the number of returns and deliveries in both directions that more fossil fuels will be utilized and we will end up exacerbating climate change. That said, there has not been much research into the sustainability impact of e-commerce. 

E-commerce still only makes up for about 15% of total retail dollars spent in the U.S., and it seems likely that this number will increase dramatically over the next 20 years. With retailers like Amazon planning to move to one-day Prime delivery times, new research will have to be pursued to determine what the actual impact and costs are on the environment.

Having returns is probably much better for the environment than throwing items in a landfill. Returns do end up in landfills, but a lot less than they used to. Prior to the 1990s, the reverse logistics systems in the United States were not well developed and far too much material was put into landfills instead of being saved and resold through the very important and growing secondary market.

Q: Tell me more about the secondary market. When we return an item that was purchased online from a site like Amazon, doesn’t it just go back to the retailer it was purchased from?

A: Not necessarily. Items that are returned are going to travel based on agreements in place with the suppliers of those items. In some cases, items will go directly back to the supplier and not to the retailer itself.

Returns to Amazon and other retailers feed the secondary market, which includes stores like T.J. Maxx, Ross, Marshalls and factory outlet malls. Because of the development of the secondary market over the last 20 years, there are a lot more places to move products that still have useful life.

The secondary market is a very important part of United States domestic business, totaling $618 billion in 2018, a hundred billion dollars larger than all U.S. e-commerce put together. Total e-commerce last year was only $517 billion.

Q: Whose responsibility is it to minimize the environmental damage caused by online shopping — the shopper, the retailer or the third-party seller?

A: These are issues that have not been adequately explored. Some shoppers are beginning to limit their online retail purchases because of environmental concerns, but those people are clearly outnumbered by consumers who are becoming more comfortable with having products delivered to their house, even if there is an environmental cost. Over the next 10 to 15 years we will likely see changes in the law and judgments from court cases that will help determine who is ultimately responsible.

Retailers such as Amazon and others are trying to improve their packaging along with pickup and delivery methods to minimize environmental impacts. There are inherent trade-offs that consumers make when emphasizing purchasing convenience. It is clear that right now consumers are much more interested in convenience than in environmental impacts, which have not been clearly delineated for them.

Top photo courtesy of Pixabay.com

Katherine Reedy

Media Relations Officer , Media Relations & Strategic Communications

480-965-3779