Private firms using production change for a good cause

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Degree project, 30 credits, Spring 2021

Civilekonomprogrammet med inrikting mot handel och logistik, 240 credits Supervisor: Quang Evansluong

Private firms using production change for a good cause

A qualitative study of Swedish private firms in humanitarian logistics

Björn Bergman, Viktor Snell

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Abstract

Humanitarian logistics is an emerging phenomenon which have been increasingly recognized due to the increase of disasters, where little is still known about the role of companies operating in the private sector for this phenomenon. Furthermore, it is assumed that both natural and man- made disasters will increase in both the occurrence and the effect in the future, which enforces the need for practices and theories to deal with them more effectively. There were 1438 epidemic outbreaks between 2010-2018 according to the World Health Organization. During the COVID- 19 pandemic shortages in the medical sector were evident, which had disastrous effects. During these difficult times companies from the private sector implemented drastic production changes to supply the disinfectant, hand sanitizers, and protective personal equipment that was missing.

The purpose of this thesis is to investigate how Swedish firms have implemented/ enabled drastic production change in case of humanitarian logistics during COVID-19, for the previously

mentioned product types.

Sweden was chosen as the empirical setting, as many contributions could be seen amongst the Swedish private companies, where the data collection was done with eight respondents in eight different companies being in multiple industries.

By using a qualitative grounded theory approach, the findings suggest that the drastic production change for the private companies in terms of humanitarian logistics is influenced by five

different factors. Firstly, its dependent on developing a social motive, with and without economic benefits. Secondly, was coordinating between external and internal stakeholders. Thirdly, was coordinating amongst existing and acquired resources and capabilities. Fourthly, was

coordinating product change to legal requirements. Finally, was coordinating and reacting to disruptions through alternative production.

This study contributes to humanitarian logistics in several theoretical ways. Initially, it brings new insights specific for private firms in their implementation and enablement for drastic production change. Furthermore, it also extends the knowledge for the private sector and their involvement in humanitarian logistics. Additionally, it also extends the knowledge specific to products for companies within the private sector related to disaster relief in humanitarian operations. Subsequently, the study also contributes with findings from Sweden, which is an empirical setting that has not been researched within the area previously.

Moreover, the study also has practical recommendations which might be useful for future crisis scenarios. Where it was evident that the involvement of private firms in humanitarian logistics was driven both by social and economic motives. Additionally, private firms should also be aware of their existing resources and capabilities which could enable an alternative production when society needs it the most. Lastly, firms should not be intimidated by regulation and production requirements, as there have been a common force among stakeholders to solve such issues.

Key words: Humanitarian logistics, production change, private firms, COVID-19, disaster relief,

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Acknowledgements

To begin with, we would like to thank our supervisor Quang Evansluong from Umeå University, for his engagement, support, guidance, and feedback through the process of writing of our degree project.

We would also like to thank all the respondents that have participated in our study for taking the time for the interview and making this study possible.

Björn Bergman Viktor Snell

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List of tables

Table 1. Interview list with number of interviews………28

Table 2. Overview over initial codes………....31

Table 3. Overview over cross-case first-order codes………....32

Table 4. Overview over development of cross-case second-order codes………..33

Table 5. Overview over development of aggregate dimensions………...34

Table 6. Overview over data structure………..37

List of figures

Figure 1. S3P stakeholder model of disaster and humanitarian operations……….16

Figure 2. Brief flexibility definitions………...20

Figure 3. Process model for implementation and enablement of drastic production change for private firms during COVID-19………...51

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1.0 Introduction

Initially, this degree project will begin by introducing the problem background for private firms operating within humanitarian logistics for COVID-19. Afterwards, the arrival of the research problem will be discussed, followed by the chosen research question. Lastly, the purpose of the thesis will be presented followed by the focus, delimitations, and limitations.

1.1 Problem background

During the healthcare crisis following COVID-19, the world saw an engagement from some of the world leading companies, despite the complications of the pandemic. Businesses took actions in order to solve shortage problems of medical supplies for the public good, not always taking internal motives into consideration. These products were often distributed without a margin of profit (Bacq & Lumpkin, 2020 p. 1), which can be identified as a social motive. Ford, General motors, Tesla and Rolls-Royce were some firms that quickly responded to a global ventilator shortage by developing and sourcing materials for their own in-house production (BBC, 2020a;

ASD-Europe, 2020). H&M, Foxcoon (iPhone producer) and BMW also contributed by

producing their own face masks (Reuters, 2020a; Reuters, 2020b; BBC, 2020b). Even distilleries such as Absolute Vodka and Jameson Irish Whiskey used existing capabilities to produce their own disinfectant and hand sanitizer to cover an existing shortage in the health care sector (Snouwaert, 2020). During the pandemic private actors proved their essential role in

humanitarian logistics by providing equipment to people in critical need. This involvement from the private sector was mainly through the shortages seen in the heart of the pandemic of 2020, where the health care systems experienced a crustal shortage of healthcare supplies when they needed it the most (Umesh, 2020 p. 1). The World Health organization (2020a) did reach out to industries and governments in order to increase the production of personal protective equipment (PPE) such as gloves, medical masks and face shields by 40 percent to meet the increased demand. Despite these efforts by March 2020 WHO called the supply of such products

insufficient (WHO, 2020a). And by December 2020, WHO called for a rational usage of PPE in order to adapt to the shortages and protect health care workers around the world (WHO, 2020b).

PPE and other health care consumables such as disinfectant and hand sanitizer are directly connected to COVID-19 cases due to their one-time-use characteristics, where the spread is determined on the usage of these products, underlining the importance of always covering demand.

However, the COVID-19 pandemic was not only a health care crisis, but it also had a severe impact on the global economy and the stock market exchange (Pak et al., 2020, p. 241). Where the pandemic has led to an increase of the unemployment rate, reduced incomes, and disruptions for transportations, as well as services and manufacturing operations (Pak et al., 2020, p. 241).

The pandemic outbreak did also add further stress on supply chains in form of irrational panic buying and price speculations (Kovacs & Falagara Sigala, 2021). The effect of COVID-19 is estimated to have an economic cost equivalent to 16,1 trillion-dollar, which can be compared to post 9/11 which was estimated to be of 6,4 trillion-dollar (Koop, 2021). This signifies the magnitude of the pandemic, which has influenced everyone in some way.

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2 At the same time as medical supplies shortages were occurring, disruptions in the private sector were also evident. During the COVID-19, 94% of the fortune 1000 were seeing supply chain disruptions following the pandemic (Sherman, 2020). This list represents the 1000 largest American companies ranked by revenue, which is done by the American business magazine Fortune. Supply chain disruptions could be identified in manufacturing plants having to close if their workforce became sick or had to be in quarantine (Kovács & Falagara Sigala, 2021, p. 41- 42). Furthermore, these implications were not solely for single plants but also affected entire industries (Kovács & Falagara Sigala, 2021, p. 41-42). Another important indirect effect was the difficulty in finding alternative suppliers, where they either could not be located or that they had been impacted simultaneously (Kovács & Falagara Sigala, 2021, p. 41-42). Despite these disruptions actors within the private sector managed to change their operational production in a time of high uncertainty to address humanitarian logistics issues. Despite this important role, the literature within this field is limited and requires further development. As we noticed, Swedish firms have engaged in humanitarian logistics operations and disaster relief during COVID-19 in order to supply goods for the people in need. Swedish firms in this thesis will be defined by their production facility being in Sweden. This makes it important in gaining a deeper understanding for the private firms’ involvement in humanitarian logistics. By addressing this issue this research aims to bring key insights for the involvement of the private actors operating in

humanitarian logistics, which could potentially enable faster and more effective responses when the next disaster appears.

1.2 Arriving at the research problem

Initially the arrival for the research problem originates from the logistic perspective which can be traced back to the 5^th century, with its roots in military operations. Throughout history the term has transitioned to fill a more modern purpose as it broadly refers to the aspects of flows of goods and services (Szymonik, 2012 p. 2). The field of commercial logistics and supply chains have been having increased value due to competition and a more global market. Where the cost of logistics is connected to 30% for an average product, the aspect cannot be avoided (Thomas &

Griffin, 1996). This implies that logistic operations are a big part of any business with physical goods, and efficacy is crucial for a successful outcome.

This thesis takes on the traditional logistic approach in a different perspective, humanitarian needs. Which underlines the importance of being able to supply crucial goods where stakes are high, and time is scarce. Humanitarian logistics is an extension of the current logistic definition, with its purpose of humanitarian fulfilment. In detail it can be seen as the cost-efficient handling of information, goods and materials from the start of the value chain to the end consumer, the people in need (Overstreet et al., 2011). Despite the old history of logistics, humanitarian aspects is an emerging research phenomena which have gained attention during the recent years

following the growth of natural and man-made disasters, which are believed to increase in the future (Leiras et al., 2014; Kumar 2018). Thomas and Kopczak (2005, p. 2-3) mean that these disasters could increase by five times in both severity and the occurrences. This emphasizes the need for suitable approaches for the involved actors in being able to deal with the effects following the disaster, which has not been developed at the same pace, resulting in waste and ineffective handling (Leiras et al., 2014, p. 97). The increased intensity for these disasters has also raised a global concern for effective disaster management (Anparasan & Lejeune, 2017, p.

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3 267). Hudecheck et al., (2020, cited in Kumar & Chowdhury, 2020) noticed that there have been 1438 epidemics between the years 2010 and 2018 accordingly to the World Health Organization.

Therefore, we argue that it is important to keep learning and extending our knowledge for disaster management in order to be better prepared for the future when the next disaster takes place. When considering the predictions by Thomas and Kopczak (2005, p. 2-3) we can conclude that certain disasters cannot be avoided, which was apparent during the COVID-19 which

presented a completely new aspect in humanitarian logistics, which the world just has started to explore. From this we argue that the field needs further studies to gain key insights, which could enable a more effective and faster response disaster relief operation for upcoming disasters.

Where this reasoning can be supported by Sowinski (2003, cited in Kovac, 2007, p. 110) where learning from humanitarian logistics can give important insights in disaster relief operations of managing situations characterised by unpredictable environments.

Previous humanitarian logistics literature publications have been the most active in connection to major disasters, such as natural or man-made disasters. Overall, the research topic got an

increased number of publications in the years 2004-2006, the time where three natural disasters occurred (Kunz & Reiner, 2012 p. 129). Where earlier studies have had a focus on regions prone to historically reoccurring natural disasters (Kovac & Spens, 2007), such as parts of the USA, Iceland, Japan and other Asiatic regions. Furthermore, COVID-19 has proven to be different from previously seen disasters. These earlier disasters have been characterized by a short time period in a specific region (e.g hurricanes) or a build up over a longer period of time (e.g.

financial crisis) (Malmir & Zobel, 2021). Following the COVID-19 the disaster has evolved rapidly affecting over 213 countries (Malmir & Zobel, 2021, p. 320), making it vastly different from previously seen disasters. Existing literature in humanitarian logistics research papers is mostly based on regions vulnerable to natural disasters. Now with the circumstances of the global pandemic, previous unattended regions in humanitarian logistics are now of interest. The spread of COVID-19 has reached every corner of the world, meaning that countries with

minimal natural disaster risk may now also face a crisis scenario. This leaves us a gap in the literature underlining the need for further specific geographical coverage. Subsequently, this can be deemed important as the areas who has not faced natural disasters earlier, might not have the established capabilities to effectively deal with the disaster relief. Or to the same extent as those regions which have experienced natural disasters previously. Following the impact seen in Swedish firms and their contribution during this time, we deem this a suitable geographical focus for this study. Where we identified that the Swedish private firms played an important role during the COVID-19 supplying equipment and products to the disaster relief organisations.

Subsequently, we can conclude that the empirical setting of Sweden is underdeveloped for this field, where we deem there are possible contributions in of both practical relevance for

practitioners and theoretical relevance for researchers.

Furthermore, we can see that previous research within humanitarian logistics has mainly been focused on aid agencies, NGOS, military and logistics providers (Kovács & Spens, 2007, p. 106- 107). Where the increasingly important role of the private sector has been acknowledged by Fontainha et al., (2016), where they present the different risks and benefits associated with certain relationships for the private actor in accordance with the public and social groups.

However, the role of the private actor in humanitarian logistics remains underdeveloped and where the research by Fontainha et al., (2016), does not consider the capabilities for the private

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4 firm’s involvement, nor an in depth understanding. Where this can also be seen in Bealt et al., (2016, p. 135.136) study on collaborate partnership, where there is a need of analyzing other actors relevant in the humanitarian supply chain. With that said, there exists a research gap in understanding how the private actors operates in humanitarian logistics, as well as what makes them capable of contributing. As we did see how firms’ contributions increased during the pandemic, the private sector is somewhat of a forgotten aspect in this context. This view of the private firm needs further studies in order to fill the missing link in the literature between the private sector and the humanitarian logistics research. Private firms are more effective and cost efficient, despite this, existing knowledge is modest. Based on 174 previous humanitarian logistics and disaster relief publications, governmental and socio-economic keywords were the most reoccurring (Kunz & Reiner, 2012 p. 128). This can imply that existing literature on humanitarian logistics is often done through the view of governmental operations, and not contributions from companies within the private sector. The actions seen from the private sector during the pandemic is important to understand in order to further utilize capabilities in future scenarios of disaster relief in humanitarian logistics.

Moreover, we can also identify that the role of the private sector in humanitarian logistics has predominantly been viewed as a donor of monetary funds (Kovacs & Spens, 2007 p. 110).

Where the financial funds have proven to be essential in humanitarian organisations

(UNOCHA), as they can enable flexible aid to the affected region without the risk of unsolicited material donations. Subsequently, Kovacs & Spens (2007) underlines this one-sided prioritizing by agencies in a reference by Murray, (2005) that aid-agencies want to show donors that their contributions have a direct connection to the cause. Where this would reduce the risk of firms donating unsolicited material donations. However, due to shortages that occurred in COVID-19, we identified that monetary donations could not help to the same degree as the critical supplies that were needed for the medical sector experiencing shortages. This presents a highly relevant research gap when considering private firms’ donations in humanitarian logistics for material donations. Additionally, this is important to address as the information and the capabilities of the private firm could play a determining role in how beneficiary the material donations become.

Hence, it is important to develop an understanding of how the private actors made sure that the material donations could be used by the disaster relief organisations facing the shortages.

By analysing the motives behind the engagement for public firms in humanitarian logistics, there were two major forces which could be identified from earlier publications. Initially, private firms could see economic gains as the humanitarian operations is considered a multi-billion-dollar industry (Falagara Sigala & Wakolbinger, 2019, p. 48). Another driver is the increasing

importance of CSR related activities, with a wider stakeholder perspective. Where Fontainha et al., (2016, p. 90) emphasize that private firms need to consider more than return on the

investment for the shareholders, but also address social issues such as those in disaster relief operations. However, these motives may be different between firms and the engagement could be also a combination of these motives. However, the increasing awareness of CSR related activities has enforced that the area has been studied quite extensively during recent years.

Despite this increased coverage we deem it necessary to include this aspect in the study, as the motives could enable a deeper understanding for the engagement of private firms in

humanitarian logistics. Where the motives could also potentially be a driving factor that contributes to the quick changes in the private firm’s production.

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5 In the perspective of responsive production and distributions, firms were directly affected by COVID-19 due to the need for quarantine in order to reduce the spread of infection in their workforce. This has impacted global supply chains, especially industries with a small number of suppliers (Kovacs & Sigala, 2021). Quarantine restriction have affected a majority of firms, that now have to reconsider face to face interactions. This together with political decisions have led to temporary production stops which have caused disruption in supply chains all over the world.

Against all odds, some firms managed to source materials, knowledge and find new ways of producing much needed means for humanitarian causes. Therefore, these actors are an interesting object of research in order to extend existing knowledge on what made them capable of

contributing despite the uncertain circumstances. More specific we would like to understand which factors made them capable to adapt their production, and how they successfully did it. The aspect of flexibility and quick response manufacturing have been studied by several authors in the past. Upton, (1995, p. 205) refers to is as operational mobility, to adapt the production to another type of product with little effort. Building on the flexibility aspect (Baykasoğlu, 2009, p.

4109) also stated that flexible changes have to be done quickly and with little impact on cost and performance. Even though the profound literature on these aspects, flexible manufacturing in humanitarian crisis scenarios is partly non-existent. Where, there currently is a broad coverage of research on how firms do operational changes in production, but only in the perspective how gaining a competitive advantage. Therefore, the flexibility aspect in regards to the global

pandemic of humanitarian logistics is a brand-new topic of research. Here we would like to know how they operate when the motives are inclined towards a humanitarian cause, not to mention in a crisis. In our view it is important to understand to keep learning from successful responses in order to be better prepared for the future to come. This could enable a deeper understanding on how flexibility is used for private firms in humanitarian logistics.

1.3 Research question

Based on the previously mentioned research gap, the research question for this thesis degree is:

-How have Swedish private firms implemented/enabled drastic production change in case of humanitarian logistics during COVID-19?

1.4 Purpose

The purpose of this degree project is to gain a deeper understanding over the private actors’

involvement in humanitarian logistics, during the COVID-19 pandemic. Despite the increased acknowledgement of the crucial role that the private actors have had in humanitarian logistics, earlier literature covering the phenomenon remains scarce, where we hope to extend this through our study. Furthermore, we aim to develop an understanding of how they have used drastic production change to help people in a critical need during the pandemic, where disruptions were also evident. By seeing these successful implementations, we hope to bring insights for future research and practitioners for the private firms’ involvement in humanitarian logistics.

Additionally, we also believe that this could present results which can give insights for future disasters, potentially leading to more effective disaster relief with faster response times.

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6 However, due to disasters unpredictability in both occurrence and the effect it is difficult to predict what is to come for the future. Despite this we argue that this thesis could provide initial guidelines and crucial insights which can be both beneficial to the private firm and how they can contribute to humanitarian logistics, but also for the organisation distributing the disaster relief.

As the insights gained could potentially aid them in making decisions under similar characteristics and enable them to easier reach out to private firms in disaster relief.

1.5 Focus, delimitation, and limitation

The focus of this thesis is on examining the private sector solely, meaning that this study will not investigate how e.g., the hospitals perception of the private sector contributions. This was made as we wanted to focus on the ability for drastic production change amongst the private firms and their involvement in humanitarian logistics. As we have chosen to focus on the private firm’s perception and experiences of how they have enabled drastic production change in humanitarian logistics, and not how this might have been perceived by the disaster relief organisations e.g., hospitals. However, we do believe that this could be an interesting area for future research within this field. Another implication is that we have chosen solely private firms, meaning businesses operating in the private sector. It is possible that the operational factors lifted in this report could also be applied for other public organisations as well, that have done similar changes. However, this is not something that we have considered in this degree project, as we wanted to concentrate on the identified research gap amongst private firms.

The delimitation that we have chosen is the selection of private firms to those that have had a direct contribution for medical organisations i.e., disaster relief organisations. This implies that private firms that did similar changes and distributed either hand sanitisers or protective

equipment directly to other private firms (e.g., banks, grocery stores, retail stores etc.) or consumers were not considered. We do acknowledge that this could also be identified towards humanitarian logistics, as the wider population can be considered to be in a critical need, due to the risk of spread. However, as we chose to focus on private firms operating with medical organisations as we deemed the identified shortages seen in the medical sector more impactful than those seen in e.g., grocery stores, banks or similar.

In terms of limitation, an important distinction that has been made is in accordance to COVID- 19. As the pandemic is still ongoing it can therefore mean that the disaster could evolve further, after this thesis have been published. This is something we have considered and from this reasoning we have chosen to focus primarily on the preparedness and response phases of the disaster as the recovery phase has not been reached. Moreover, as this study will be focused on Swedish firms during the COVID-19, it is important to address as the regulations and

precautions for COVID-19 have been vastly different between countries. Therefore, it is possible that there are some differences due to different national and regional regulations. This could have an effect considering the lockdowns for private firms e.g., lockdowns forcing production to be closed, which could have a direct effect on their ability to produce. However, we do not believe that this will interfere with the purpose of the study nor the generatability. Lastly, there is some limits in terms of transparency when it comes to the presentation of the respondents. As the anonymity of our respondent is a must, some descriptive information has to be left out due to the chosen sampling technique.

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2.0 Scientific methodology

In this chapter we will initially present our choice of subject and pre-understandings, following the chosen philosophical approaches (i.e ontology, epistemology and axiology). Afterwards the research approach, research design and literature search will be presented.

2.1 Choice of subject

The choice of research subject origins from two fields in combination which eventually forged this research subject. As we are writing this thesis as a degree project in Civiliekonomprgrammet med inriktning mot handel och logsitik there are some academic knowledge connected to

logistics, which were of interest. However, we considered the research topic of pure logistics to be a well-researched subject. Therefore, we started seeking towards niches, specifically logistics outside the competitive advantage context. Our first path was to target the public sector such as hospitals which we eventually had to discard due to the hard attainable and sensitive data we had to gain under a short amount of time. With the help of our supervisor, we identified the area of humanitarian logistics which were not as covered as the traditional commercial aspect of logistics research. There was also a greater sense of fulfilment of focusing on humanitarian logistics, an opportunity to contribute to the research for humanitarian causes. In addition, with the COVID-19 pandemic new opportunities presented themselves in the view of business research, which the academic world just started exploring. We found that the contributions of supplying health care related material by private firms during the pandemic was an act under humanitarian logistics and a suitable object for this study.

2.2 Pre-understandings

Preunderstanding involves previously understood knowledge, insights and experiences which is used in gaining an understanding of the research (Stenbacka, 2001, p.553-554). Furthermore, the authors highlight the importance of pre-understanding as it can increase visibility and

transparency in the access. Where access refers to the ability to come close to the researched phenomenon, in both physical and mental access (Stenbacka, 2001, p.553-554).

This can also be seen in the chosen field as we both have previous logistics experiences through our education, which also served as the access point for the researched field in combination with the help of our supervisor. Our previous knowledge for humanitarian logistics was before

COVID-19 limited, which could serve as a barrier. However, through our previous knowledge gained from our education specific to supply chain, we believe to overcome this barrier with the combination of an objective literature research. This is done to prevent any bias that could come from presumptions in the literature search from earlier experiences. Furthermore, neither of us have any involvement with an actor in either the public or private sector, which neglects the risk of any bias in presenting the results.

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2.3 Research philosophy

Research philosophy can be defined as the nature of knowledge and its development, which is the basic premise of the process during a research (Saunders et al., 2009, p. 107). Johnson &

Clark (2006, cited in Saunders et al., 2009, p. 107) mean that researchers within business and management need to consider this, as the choices in philosophy in terms of research strategy can have distinct impact on the understanding and what is being done in the investigated area. The three main aspects in the research philosophy consists of ontology, epistemology, and ontology (Saunders et al., 2009, p. 129; Collis & Hussey, 2014, p. 47), which will now be presented. For the different philosophies we will initially start with the choice made for the thesis, afterwards explanations of what they mean will be lifted, and lastly the argumentation of why these was made and why other philosophies were not suitable for the study will be presented. This was done because we wanted to focus on the aspects relevant for this study and how they are of relevance.

2.3.1 Ontology

The ontology view we have chosen for this field will be constructivism as we believe that there are many factors influencing the managers and researchers in the field. Where ontology is the assumption concerning the nature of reality, which includes ideas of existence in the relationship between people, society, and the world (Eriksson & Kovalainen, 2008, p. 4-5; Saunders et al., 2009, p. 110). Furthermore, this can be seen in the chosen field with the increased CSR awareness, which can influence companies to act more sustainable towards the stakeholders.

This increase in awareness has according to us led to more companies being involved in sustainable actions. Elaborating further on humanitarian logistics there is the influence from actors such as NGOs and public organizations both in awareness of the disaster and in donations, hence social actors continuously affect the area of humanitarian logistics. When choosing

between the two views of ontology, being either the objectivism or constructivism Eriksson &

Kovalainen, (2008, p. 5) mean it should reflect the view of the fundamental properties seen in the studied field of the social world, even though many of the assumptions are taken for granted.

Hence making constructivism suitable, as it encompasses the interpretivist view that reality is socially constructed, hence each person has their own perception of reality, leading to multiple realities existing simultaneously (Collis & Hussey, 2014, p. 47). In contrast we can therefore conclude objectivism to be ill suited as the assumption arrives from positivists that believe that social reality is objective, being external to researchers and hence the belief that everyone has the same perception of reality (Collis & Hussey, 2014, p. 47). This is not aligned with the

researcher’s beliefs as we can see that COVID-19 has impacted everyone, but in very different ways, leading to multiple realities existing simultaneously. Furthermore, we also deem it difficult to separate the researchers from the studied field to answer our research question. Therefore, we believe that constructivism is crucial to answer the purpose of this thesis.

2.3.2 Epistemology

Following the previous choice of constructivism, the natural choice in epistemology would be to adopt a choice of the subjective view. The epistemology assumption underlies what is considered as valid knowledge by examining the relationship between the researchers and what has already

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9 been researched (Collis & Hussey, 2014, p. 47; Saunders et al., 2009, p. 112). In this assumption there are two different beliefs, the first being from the positivists, which believe the only true knowledge that can be gained through the phenomenon are those that are observable and measurable (objective view) (Collis & Hussey, 2014, p. 47). Where the other belief is from the interpretivists that instead tries to minimize the distance between the field of research and the researcher (subjective view) (Collis & Hussey, 2014, p. 47).

As previously mentioned, we argue that knowledge is complex and is subjective for actors being involved in different situations. For the chosen area of research, we argue that the involved actors in the humanitarian process are subjective and influence each other, where if we adopted an objective view, this could discard unmeasurable findings. Additionally, we also argue that the subjective view, meaning that there exists no knowledge beyond the capabilities of the

observations and interpretations of the external world (Eriksson & Kovalainen, 2008, p. 6) is more suited towards the purpose of this thesis. As the topic is relatively unexplored, we have chosen to discard the objective view, as the goal is in exploring the complexity of the

phenomena, which according to Collis & Hussey (2014, p. 45) is better done by interpretivism through qualitative studies. Therefore, we deem the objective view that emphasizes the belief that there exists a world which is external and theory neutral (Eriksson & Kovalainen, 2008, p. 6) ill-suited for the purpose of this study. Furthermore, the findings are assumed to be focused on the capabilities on the firms, which by support of Saunders et al. (2009, p. 112) is aligned with interpretivism through the differences that are in the role of social actors.

2.3.3 Axiological

Subsequently, for the axiological assumption we have chosen the interpretivist view since it is more in line with our chosen study. The axiological assumption describes the relation the researchers have to their judgement’s values. How much the authors values will affect the study at different stages, and if the findings can be seen as credible (Saunders et al., 2009 p. 116). The two stances in the axiological assumption, positivists and interpretivists have different

interpolations of the effect of the researcher’s values affecting the study (Collis & Hussey, 2014, p. 48). We believe that our existing values will affect the study in some unconscious way,

therefore this study will adopt the assumption of interpretivism. Consequently, a positivistic stance cannot be assured since, it means that there are no values involved in the research process.

The conductors of the study are not interfering with the studied object, the two parts are

separated and non-influential on each other (Collis & Hussey, 2014, p. 48). Since we believe the chances of the researchers’ values will interfere in the study, more than not, interpretivism is more suitable.

Further, Heron (1996, cited in Saunders et al., 2009, p. 116) mean that values will interfere, and researchers will have to use axiological skill in the process of deciding and planning out the research process. The values carried are affecting the path of which topic is more interesting to study and which is not. The interpretivists in contradictory to positivists, believe that values kept by the authors are present at all times. These values interfere with what is perceived as facts and findings, and what to draw from them (Collis & Hussey, 2014, p. 48). There are some benefits of disclosing one’s values in advance of the study which would encourage the researchers to be honest and aware of values which could affect judgments and drawn conclusions (Saunders et al., 2009 p. 117).

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10 As we have an underlying interest in this subject it is important to keep this in mind when

conducting the study. As the research method is done through qualitative interviews the distance from the researchers and the studied object is close, and in risk of higher levels interference compared to quantitative data collection. Therefore, in preparation, we stated our thoughts, pre- understandings, and choice of the research area in the beginning of this chapter, to clarify any values that could potentially affect the study.

2.4 Research approach

This study will seek to answer the research question in an inductive process, through starting with empirical observation, to discover patterns of generalizations. In social science there are two main paths of research methods, deductive or inductive logic approaches (Eriksson &

Kovalainen, 2008 p. 13). The two approaches are contradictory to each other, they begin their reasoning logic from each end of the spectrum. However, Eriksson acknowledges that in social science it’s common that the research uses both deductive and inductive processes throughout the study, abduction.

The inductive process has been a path for social science to take when deduction cannot explain human interaction in a social perspective (Saunders et al., 2009 p. 126). Since this study will have some aspects of social interaction, the inductive process will be preferable in this aspect.

Inductive reasoning starts with the observed phenomena which then develops into more general assumptions, specific to general (Collis & Hussey, 2014 p. 7). The inductive approach has the benefit which enables studies to find new undiscovered aspects of the specific context (Polsa, 2011, p. 289). Therefore, the inductive process is more suitable for this study as the purpose is to gain deeper understanding over the factors in private firms that enable drastic production change in humanitarian logistics, hence going from experience to theory. This model is therefore

contradictory to the deductive process and a more useful approach in this case.

In comparison, with a deductive methodology, theory is the basis of empirical study. In general, deductive research has its origin in natural sciences (Saunders et al., 2009 p. 126). Where

theoretical frameworks are developed with the purpose of testing them against empirical findings (Collis & Hussey, 2014 p. 7). The deductive process begins with structuring of hypotheses and theoretical concepts, which act as the basis for the empirical study (Eriksson & Kovalainen, 2008, p. 13). We can also conclude that there is a lack in established theoretical concepts for this specific chosen field, which implies difficulties in hypothesis testing of confirmation or denying.

Additionally, we also deem it difficult to quantify the data in the deductive approach, where the results could imply that unmeasurable findings are not investigated, hence leaving out important gaps in the research. Therefore, we argue that hypothesis testing is not suitable and therefore discard deduction and abduction, opting instead for the inductive approach. Furthermore, the inductive approach is supported by the interpretivism assumptions earlier, where the most suitable approach according to Collis & Hussey, (2014 p. 47) is the inductive approach.

Following the purpose, we can state that the inductive approach is more advisable according to the human interactions and experiences that we aim to identify.

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2.5 Research design

The chosen research classification for this thesis will be the analytical/ explanatory, as the purpose lies at extending the understanding for private firms operating within humanitarian logistics on a deeper level. Furthermore, the research design is important as it will connect to the purpose of the study and will eventually connect to the answer the authors seek to obtain

(Saunders, 2009, p. 138). Therefore, the chosen design is suitable as the purpose is centered on an analysis of how the firms implemented and enabled the drastic production change in

correlation to humanitarian logistics. Hence, connecting well with the analytical or also referred as the explanatory research, as these explanatory studies try to explain the relationships and causes within the variables (Saunders, 2009, p. 140), where the focus lies within understanding characteristics, relationships, and correlations (Collis & Hussey, 2014, p. 5). This is well suited for the chosen research question as we seek to analyse how different operational production factors have affected the relationship between private firms and their involvement in

humanitarian logistics.

However, there are also other methods that were considered, being the descriptive, exploratory and the predictive, which will now be discussed. The descriptive approach could have been adopted if we were to examine exclusively what factors that were used, but we argue that an analysis covering how the factors were adopted in correlation to human needs during a crisis will give a more in depth understanding. Descriptive research is used when the authors want to gather information of an already existing phenomena, in the purpose to describe the subject (Collis &

Hussey, 2014, p. 4). As Robson (2002, cited in Saunders, 2009 p. 140) said “descriptive research is “to portray an accurate profile of persons, events or situations”. Hence, the descriptive is not aligned with the purpose of this study. Additionally, we deem the explorative approach not suitable as the chosen field has gotten attention previously, where e.g., the donations from the private sector have been acknowledged for humanitarian needs. Therefore, we deem this approach ill-suited as the exploratory research approaches are often used when the targeted phenomenon or subject have no prior research (Collis & Hussey, 2014, p. 4). While considering the unpredictability seen in the events that organizations within humanitarian logistics operate, we also deem the predive approach ill-suited as every disaster is unique, which is apparent with the direct shock of COVID-19. As the predictive research goes beyond observing and

understanding the studied subject, to eventually bring forth knowledge on why certain phenomena exists and provides an opportunity for generalization which could be applied elsewhere in the future (Collis & Hussey, 2014, p. 5). Ultimately, all these other considerations prove that the best research design to adopt in accordance with the purpose of this thesis is the explanatory design.

2.6 Literature search

The theoretical framework presented for this degree project will consist of previous research and literature done within the chosen studied field. The literature search can be defined as “a

systematic process with a view to identifying the existing body of knowledge on a particular topic” (Collis & Hussey, 2014, p. 72). Having a critical review of the literature is deemed essential as it can guide the understanding of previously done research in relation to the chosen research question (Saunders et al., 2009, p. 98). Furthermore, the authors mean that using a

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12 funnel strategy could be helpful, going from a broad view then narrowing it down to a specific research question. Additionally, when conducting the literature search Collis & Hussey, (2014, p.

77-78) mean it should be systematic and methodological, where the scope and keywords should be defined.

In our research we chose to use the funnel strategy where the defined scope was within

humanitarian logistics, which later was narrowed down in combination with our chosen research question. This was done through a systematic approach where we primarily used scientific articles that were peer reviewed as a first source, to ensure a high quality on the literature, where the current research gaps were outlined. Through the literature review we also identified that humanitarian logistics had many similar keywords, which we used in the literature search to develop a broad understanding of the topic. The chosen keywords that were identified as relevant in our research question that we used to identify the literature were, humanitarian logistics, humanitarian operations, disaster relief, natural disasters, Covid-19 humanitarian logistics, supply chain crisis management, adaptation focus, flexibility, operational flexibility.

The literature that was collected was primarily done through the Umeå university library and Google Scholar. Additionally, we also used textbooks from earlier courses to a certain degree, which were used to explain basic concepts.

2.7 Source criticism

Our theoretical understandings in this thesis origins from existing literature found mainly through google scholar and multiple databases via Umeå University. Since these sources are external and more or less unknown, it’s important to always take a critical standpoint. According to Thurén & Werner, (2019, p. 12) the school of source criticism contains four criteria’s being;

authenticity, the relation in time, interdependent and freedom of tendency.

By being authentic the publication is what it portrays itself to be, not misleading its identity (Thurén & Werner, 2019, p. 27). In order to prevent the usage of non-authentic sources the selection firsly were done through reliable databases such as those provided by Umeå University being; Ebsco, Scopus and Web of Science. Where the selection database from Umeå University library allows the selection for peer-reviewed publication, we could conclude that they attained a high level of authenticity. However, some sources were found through google scholar and this database does not allow a peer-reviewed selection. This increases the risk of using a non- authentic reference in this thesis. Therefore, these sources were not used as a primary source of new crucial information, but rather in combination with other peer-reviewed articles.

Furthermore, we also chose to take a critical standpoint when reading the articles to further attest to the authenticity criteria. The relation in time questions the legitimacy of a source that are far apart from its source of information (Thurén & Werner, 2019, p. 12). As stated earlier, the aspect of logistics can be traced back to the 5^th century, and the available publications in this subject will alter in age. In our selection we always strived towards the newest available sources of information, but this does not ensure that new information is built on old. When using sources that are considered “old” we only included the information if we thought that it was still relevant in time, such as definitions. The interdependent criteria consider if the source is reliant on other types of external information or not (Thurén & Werner, 2019, p. 12). In order to ensure this, we

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13 stived towards using primary data when available. In some cases, the primary source was not available and is therefore a weakness in the interdependence criteria. Finally, the freedom of tendency criteria evaluates the source in the perspective of having an underlying personal, economic, or political interest (Thurén & Werner, 2019, p. 12). In order to prevent such

tendencies peer-review articles was used as main arguments and with additional sources the risks were minimized.

2.8 Overview for chosen scientific methodology

Philosophical assumptions - Ontology

- Epistemology - Axiological

Constructivism Subjective view Interpretivist view

Research approach Inductive process

Research design Analytical/ Explanatory

Literature search Funnel strategy

Scientific and peer-reviewed articles Umeå university database

Google Scholar

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3.0 Theoretical framework

This chapter will start by introducing the reader in humanitarian logistics to gain an understanding of the chosen research field. Afterwards the process within this field will be presented, followed by its involved actors. Then the factors affecting production changes will be discussed, following the motives behind the involvement in humanitarian logistics. Finally, the disruptions seen in the private sector as well as the geographical scope will be outlined.

3.1 Understanding humanitarian logistics and supply chain management (HLSCM)

As stated earlier humanitarian logistics is the cost-efficient handling of information, goods, and materials from the start of the value chain to the end consumer, the people in need. (Overstreet et al., 2011). Where the people in need are often those who are affected by either a man-made or natural disaster (Kovács & Spens, 2007, p. 99). In the definition of humanitarian logistics

operations, this thesis is targeted towards the people in need caused by the COVID-19 pandemic.

Going further, we can say that everyone got affected but more specifically the healthcare sector took a big hit. Therefore, in this aspect people in need is the consumer/user of PPE and other healthcare connected organisations, such as hospitals, elderly care and other individuals exposed to high infection risk related activities.

A common theme in humanitarian logistics, humanitarian supply chain, disaster relief operations and supply chain crisis management are that often three phases are mentioned, being

preparedness, response, and recovery (Queiroz et al., 2020; Anparasan & Lejeune 2017;

Holguín-Veras, 2013; Kovács & Spens ,2007). Where Holguín-Veras mean that humanitarian logistics is too broad to be defined by a certain number of operations, but rather includes all phases of emergency management. Therefore, considering the issues seen in COVID-19 we argue this is highly relevant, and it is applicable to the ongoing pandemic. An important factor in disaster operations has proven to be logistics, where logistical efforts are approximated to be 80% of the relief (Kovács & Spens 2007, p. 99-100). The efforts from logisticians can determine the speed of when supplies arrive at the site to the people in need, which is crucial as the right disaster relief could potentially save lives. From this we can conclude the importance of understanding the factors of what made the private firms able to respond in humanitarian logistics during a time of crisis, as it could enable a better transition potentially saving lives when the next crisis appears.

Another view that is closely connected to humanitarian logistics is the supply chain perspective during humanitarian operations, which involves planning the supply and demand regarding the location and volume to ensure direct response, alternative transportation routes, and emergency plan negotiations with suppliers (Chiapetta Jabbour et al., 2019, p. 297). Therefore, coordination in the process of disaster relief is important to ensure high quality through the engagement of the responding actors (Anparasan & Lejeune, 2017, p. 266-267). To understand the involvement of the different actors it is firstly important to understand the process that is within the humanitarian operation.

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3.1.1 The process of humanitarian logistics operations

The process in humanitarian operations is crucial to provide aid in time for affected regions, where it is important to be as responsive and effective as possible. Whether the disaster

characteristic, effective logistics is key in order to secure a flow of needed goods in a complex supply chain. Humanitarian logistics operations provide aid by allocating resources such as food, shelter, medical equipment and other necessities to locations with limited access. The

humanitarian operation falls under two types of key activities, support services and programs.

There is a clear focus from organizations on the short-term activities in disaster relief operations compared to long term investments (Whiting & Ayala-Öström, 2009, p. 1082). The provider of such aid are mainly governments, nongovernmental organizations, United Nation agencies and private organizations (Costa et al., 2012, p. 598-599). Even though that private firms are a main part of the process, we still know very little of how they work and interact in the humanitarian setting.

In a humanitarian context there is often high uncertainty connected to the estimated supply and demand of the needed goods. By nature, humanitarian operations and logistics differ from traditional logistics. The international humanitarian operations are more unpredictable, uncertain and requires a flexible operation (Oloruntoba & Gray, 2006, p. 115). In addition, time is crucial as it might be the difference between life and death (Van Wassenhove, 2006, p. 477). High levels of uncertainty with extreme time pressure makes this a complex situation to solve. Humanitarian logistics operations differs from the commercial side, mostly in the perspective of time,

uncertainty, type of organization, and that the stakes are higher considering the lives at risk.

Existing literature covers the parts of the humanitarian process where governments and donor- dependent organizations are mostly involved. However, the private side of the humanitarian logistics process is not as thoroughly covered, leaving a room for missing links in the supply chain. This is an important aspect as private firms are a part of the humanitarian logistics process and more interesting, they are used to a competitive environment where responsiveness and flexibility is crucial for survival. If we could extend existing knowledge of humanitarian processes in a context for private firms, additional possibilities could open, hence helping the people in need.

In relation to these humanitarian aid processes there is the aspect of the stakeholders and other involved actors, which add another level of complexity. Donors, aid receivers and international communities are all stakeholders towards the success of the international humanitarian

organizations (Costa et al., 2012, p. 599). To understand the private firm processes and affecting factors, it’s important to understand which actors are involved in the humanitarian process and how, which will now be presented.

3.1.2 Involved actors in the humanitarian process

The humanitarian logistics supply chain can be categorized by the involvement of governments, aid agencies, other NGOs, donors, military, and logistics providers (Kovács & Spens 2007, p.

106-107). Furthermore, the importance from the public sector has gained increased attention for their sourcing of funds to aid agencies. This can be seen in COVID-19 where many donations could be seen in funds, but we also saw donations in the form of equipment, which has not been addressed in (Kovács & Spens, 2007). These donations of materials were a response to the shortages seen in the medical sector, where Patel et al. (2020) mean that the shortages lead to

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16 disease hotspots in hospitals, potentially jeopardizing the safety for workers and patients. Which caused hospitals to open requests for donations of PPE (Penn medicine; Methodist Hospital).

Many private companies contributed where e.g. Bruce Power donated over 1,2 million pieces of PPE to the healthcare workers during the Corona pandemic (Lebel, 2020). These contributions from private actors have been critical in the disaster relief, which proved apparent during COVID-19, despite this the literature remains scarce for their involvement. This apparent capability of private firm’s contribution indicates that they are part of the humanitarian process, highlighting the importance to extend current knowledge on humanitarian logistics for the private sector.

This increased attention of stakeholders can be seen in (Fontainha et al., 2016, p. 79) for their Social-Public-Private partnership (S3P) stakeholder model of disaster and humanitarian

operations, which also gives a more in-depth overview of the complex relationship that exists in correlation to the beneficiary than the aforementioned seen in Kovács & Spens (2007), which gives better a representation of the actors involved during the COVID-19 pandemic as well. The S3P model also indicates three important characteristics, this being the central perspective of the beneficiary, the dashed lines representing fragility in the relationships and that there are several relationships between all stakeholders (Fontainha et al., 2016, p. 79). Which can be seen in figure 1 below.

Figure 1.S3P stakeholder model of disaster and humanitarian operations (Fontainha et al., 2016)

Despite this acknowledgement of the private actor, their role remains underdeveloped in the humanitarian logistics context. Where the research done by Fontainha et al., (2016) has mainly conducted the risk and benefits of different relationships when collaborating with private actors.

This type of view is important but does not consider what the capabilities are for the private actor’s involvement. As seen from the pandemic, private firms possess capabilities that are crucial in similar scenarios. By understanding their role, we can more easily continue the research in order to find effective factors that improve their capability of contribution. This research gap can also be seen in the research by Kovács & Spens (2007) which has primarily

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17 considered private actors as donors or as logistics providers and have not investigated their roles in other scenarios. The need for recognizing the crucial role of private actors has also been acknowledged by the UK based NGO, Humanitarian logistics association (Deffor, 2020).

Additionally, this research gap has been lifted by Chiapetta Jabbour et al., (2019, p. 297) where they specify a more proactive role, of how private firms supply chain are connected and

organized in supporting prevention and preparation in situations such as natural and man-made disasters. But we can also see the lack in collaborative partnership in the research of Bealt et al., (2016) where there is a need of analysing other actors relevant in the humanitarian supply chain, where local and regional supplier are of particular interest.

This means that the role of private sector involvement in humanitarian logistics during COVID- 19 has been vastly different in terms of operational changes than previous research has

addressed. However, many argue that the pandemic was unpredictable and hard to plan for, meaning that organizations could not prepare or predict for its effect. From this reasoning we argue that the proactive roles of private sectors involvement presented by Chiapetta Jabbour et al. (2019) will not capture their role in COVID-19 accurately but needs to be studied on a

response level addressed in Bealt et al., (2016). This can be connected to the operational changes presented earlier that were seen in the heart of the pandemic, which still needs further research.

These factors enabling private actors to respond in a time of high uncertainty is important to research, as it can give guidance for their future involvement in humanitarian logistics when the next crisis takes place.

Furthermore, the emphasis for donors has been on monetary donations (Kovacs & Spens, 2007, p.110), hence leading to a research gap when shortages occur, where money will not contribute to the aid in the same extent as the critical products which are needed. At times when money is not an obstacle but rather our capability to produce much needed products, we need to

understand the underlying factors that enable firms to respond. Even though financial donations are generally seen as one the most valued resources by humanitarian organizations, as they can enable quick and flexible life-saving assistance in affected countries by the operating

humanitarian organizations (UNOCHA). Additionally, many experienced donors chose to contribute with monetary donations, as in disaster relief operations it is generally considered more versatile throughout the disaster relief operations, while neglecting the risk of the

unsolicited material donations (Özpolat et al., 2015, p. 109). For donors to be effective it often requires them to be well informed as their donations can be both beneficial and even harmful in disaster relief (Özpolat et al., 2015, p. 109).

3.2 Concluding remarks

Conclusively, humanitarian logistics is the process of which governments, aid-agencies, donors, private firms, and other NGOs provide disaster relief to people in need. This relief can be in the form of food, shelter, medical equipment, and other much needed resources in order to reduce suffering for the affected regions. Most of the existing studies have been looking at humanitarian logistics in the view of governmental and donor-dependent organizations, leaving a missing link in the chain, the private sector. The private sector is an important actor in the humanitarian logistics process as it can be a producer of such goods and equipment.

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18 Without the private sector contributions, in the form of production, governments and other aid- agencies have a missing link in the supplier side of the process and might not have anything to distribute to the affected regions. There is a need to understand which factors are making private firms capable of responding to a change in demand, especially when undergoing stress

themselves such as the COVID-19 pandemic. In order to understand what made these firms capable of contribution despite undergoing stress themselves, we first need to look at existing literature covering the factors improving quick response production change.

3.3 Factors effecting production change in private firms

3.3.1 Quick response manufacturing

The literature on quick response manufacturing underlines the importance of short lead times by being responsive to changes in demand (Fernandes & do Carmo-Silva, 2006, p. 74). Being responsive is a crucial factor for firms to gain a competitive advantage, due to customers willingness to delivery times (Godinho Filho et al., 2016, p. 4891). Beach et al. (2000) refers to Gaimon & SinGhal, (1992, p. 42) meaning that historically, demands were more reliable and the importance of reducing manufacturing costs were in focus. Times have changed and now firms have to adapt to fluctuations in demand at the same time and proactively introduce new products by using existing capabilities (Beach et al., 2000 p. 42).

In the development of the modern era of manufacturing there is an increasing need for

customization and having quick market responses, in order to compete on the market. Just like humanitarian logistics there is a need of being reactive to adapt to changes and disruptions in the demand. The common factor we found here is time in relation to flexibility, the quicker response the better. As we mentioned earlier, the private sector was fast to react to product shortages in the health care sector. In a humanitarian context, reaction time is crucial to reduce suffering and damages, and in a commercial context time is crucial to gain a competitive advantage.

The ability to be flexible and quickly change how and what a firm is producing to another is also referred to as operational mobility (Upton, 1995, p. 205). This capability is the basis for

manufacturing firms in order to gain a competitive advantage over each other (Upton, 1995, p.

206). Suri also referred to quick response manufacturing as a strategy, where firms respond to customer demand and quickly adopt their operational capabilities to fulfil them (Suri, 2010, p. 2).

This is what we saw private firms do in the pandemic outbreak, a quick manufacturing response.

However, the author points out when defining flexibility, it’s important to consider that firms could adapt flexible manufacturing in different ways. Upton (1995, p. 205-206) further states that there is a difference between internal flexibility and the external competitive need, which both enables a competitive advantage. One flexible manufacturing strategy is by offering a broad range of products, through division of production sites and external contractors. The firms do not have to build internal capabilities and instead utilize external parties by keeping the products in inventory. And contradictory to the external method, firms could build the capabilities to produce these types of products in one site (Upton, 1995, p. 206). With this method the firm could change between products quickly while keeping response times short. This challenge becomes even more complex when the producer and its connected supply chains undergoe stress themselves. A crucial necessity no matter what the context is, humanitarian or commercial.

Private firms using production change for a good cause