Strengthening Resilience of Supply with Essential Goods through Public-Private Emergency Collaborations: Challenges and Incentives
Creators: name: Lüttenberg, Markus
Publisher: name: Karlsruher Institut für Technologie (KIT)
Year: 2023

description: 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.