Christian Grønnerød, head of supply at the Danish Refugee Council, talks to Ceri Jones about the intricacies of humanitarian supply chains, logistics networks and the benefits of deeply decentralised operations.
Hi Christian. Firstly, please could you tell me about the Danish Refugee Council and its global reach?
Imagine, it’s 1956. A train comes out of Budapest and stops at the border between Denmark and Germany where a group of volunteers want to help refugees – that’s how our organisation started. It was supposed to last a couple of weeks but lo and behold, 60 plus years later, we are still here. Last year we touched about 8m refugees in 40 countries, and the numbers are only going up.
Today we are organised wherever larger conflicts take place that lead to refugees and internally displaced people. Of course, emergencies are important, but we work to bring refugees and internally displaced people back to some sense of normality over the next 10 years. That may be building up legal protection, getting their IDs back, re-establishing them as human beings and ensuring they have an identity, training, rescaling, upscaling and basically stepping in where states don’t fulfil their rights and duties.
How do you fund these overlapping projects?
We are primarily funded by public international funds, governments, the EU, US and the UN system. We have about 9,000 employees in about 40 plus countries and are extremely decentralised. Our country operations run most of the activities, and I sit at headquarters as head of supply team for the organisation. In that role, I’m more strategic than operational.
And does donor funding affect how you operate?
One of the big differences we have compared to a commercial supply chain is that we have traceability and visibility throughout our supply chain. For instance, with Ukraine one of the first things needed was an NFI kit – a non-food item kit, so shampoo, soaps etc. We go to a donor and say we want to help 100,000 refugees with NFI kits, they say, fine, here’s money. We take that, go to market, and deliver to the refugees.
But we have to demonstrate what we did with those kits. So if one donor gave us money for 25,000 kits and another for 50,000 and they are lying in stock next to each other in a warehouse, we need to be able to identify donor A from donor B. It’s a hard requirement with a lot of extra administration.
The second big difference is, of course, the uncertainty and demand. We never know where a crisis is going to happen, though we can have an idea. With Ukraine right now, there are 12-13m people who have left their homes and need help to cope. Did we know that in January? No. Did we know that in February? No. Did we know on 25 February? Yes.
Do you always set up a new team in a new location on demand?
Well, when there’s a crisis we want to move in early, but whereas other groups will come in, do initial work and then move to another crisis, we stay behind to help in the longer term. Based on our business model, we have a small overhead on our donation, so if I receive $1m for one project, we’re allowed to take a small percentage of that to pay for the rest of the organisation and keep a minuscule surplus to build into a fund.
These work as great accelerator funds. So when a crisis like this happens, we can start a new organisation with those surplus funds, to go out and advocate to the donors and then the money starts to come in, right? It’s essentially internal seed funding we can use to start a crisis response.
How do you manage efficient and ethical sourcing when you're always operating in emergency response?
In these situations, we and many other organisations are all chasing the same thing and there’s only that much in the local marketplace. You see an enormous initial demand that will drive up prices and may also have an impact on quality because some items have been in the back of a warehouse forever. What can you do?
Part of the issue is a lot of local context comes into play. Although I might be able to create a generic long-term agreement for an NFI kit, local context means a group of people may have cultural issues with certain items, eg one type of shampoo is not being used because the cultural way to wash hair is different there.
It’s very difficult to do it in advance. Of course, you could source generic items that suit somewhat, but if you really want to help, you have to tailor them to the cultural aspects you are facing. Another issue we face is impartiality, which is important. We do not take sides in any conflict.
The Ukraine conflict actually pushed this to a point where for medical equipment to treat the wounded, based on our humanitarian principles we had to choose whether to help with that or not. And we chose not to because if we were perceived as helping the Ukrainian resistance we would become a legitimate target.
Supplying critical items to conflict zones must be extremely dangerous. How do you set up the logistics arrangements to support people in need during wars?
This is an enormous collaborative effort. Within the humanitarian sector you have something called the cluster system. It’s about 10 areas of collaboration and there’s one on logistics which is called the logistics cluster, hosted by the World Food Programme. That’s a group of experts that sit in Rome and they are the first people on the ground to put down a logistics framework. On 25 February they were in Poland, about 50km west of the Ukraine border. They secured warehousing, trucks, cold storage, offices, everything. Then all the partner organisations (about 500) could utilise these.
So when there was a need for transport, instead of me sending my two packages and somebody their three, they could guarantee full container loads. And they obtained intelligence on where we could cross. Because they are hosted by the UN, they work directly with governments and customs bodies to ensure there are exemptions for humanitarian personnel or humanitarian material. They set up the system, we then become the customers. This takes away the competition for trucks and airport handling equipment – you don’t have to worry about it because it’s paid for by the humanitarian system
So there is competition but also a lot of collaboration between different humanitarian agencies then?
There is. For example, when Covid hit I was asked by a group of 30 NGOs to represent them on the UN Covid-19 supply chain system task force. It was set up and led by the World Food Programme (WFP) and the World Health Organization (WHO), with all the big UN organisations, myself and another NGO there looking at how we as a global humanitarian system could respond. They consolidated all the demands for PPE, patient care and testing, and with that demand went directly to manufacturers and locked in requirements which made sure that items could be transferred wherever needed. That same concept was then used for vaccines to a certain extent.
Afterwards, in early 2021, I was asked to lead the steering group to evaluate the performance of the UN during that period and we found that even though we had preparedness, we were unprepared and needed a playbook for this going forward. One issue was the need for early collaboration because the problems are getting so big that nobody can solve them alone. We have to solve them together.
What’s the difference between primary need and longer-term support?
That’s what we call the protracted crisis. It starts with the beneficiary. So if we take South Sudan: we would build a refugee camp, put in sanitation, health clinics, and everything to create a temporary life. We might start vocational training to build skills, or micro programmes so they can build small shops to start trade. And all that has to be done following our mode of procurement being primarily local.
There are always local considerations and requirements, so it’s very difficult for me to sit here and determine what kind of kit people would need in northern South Sudan because I don’t know the geographical conditions or constrictions of moving things in or the cultural issues there. Somebody working there will know more about local procurement and my programme staff would be able to describe this in order to solve the local problems.
So you’re a proponent of local procurement managed locally?
Yes, we also have a push from the donor community to make sure that more and more is purchased, but also manufactured locally. The Toyota Land Cruisers everyone’s driving around are produced in several places so how much input do I give to the local economy by buying it there? Maybe not much. But if it’s something that could be manufactured locally – soap, for instance, or foods or seeds – then that will benefit the local economy. One of the other things growing in our industry is cash-based interventions. Imagine somebody is cold. I could give them a jacket, but if I give them money, they get part ownership in solving their problem.
This way you empower people to be part of their solution. So some might choose to buy a jacket, some may choose firewood or a blanket. That’s where a phone comes in handy because in certain places in East Africa, we can send money direct for a person to use in local trade. And if the market is not there, we can build the market. Often we agree with traders that certain food items must be in stock at a set price so people can take their voucher and choose a bag of rice or maize. If the local market is not working, we can establish one by agreeing with traders that if they set up shop, we guarantee people will come to it, and that we will pay for whatever is taken from their stock at an agreed cost.
Did this style of operating mean dealing with Covid was business as usual for you?
Well, this has always been normal for us – these are the conditions and constraints we operate under. There is always variability and uncertainty. But whereas a commercial entity would have money to throw at a problem, if you give money to a charity, you want that charity to help people. You don’t want that money to go to the charity to build competencies or tools like a new ERP system or something that would enable us to deliver better – you want it to go into the tummy of a child.
So we have a very small percentage of donations which needs to cover everything, my salary, the ERP system, the safety fund we have to send out new projects when we need to do that. It also has to cover problems with liquidity, or when a bank closes down and our funds get frozen. We have razor thin margins and it’s very difficult for us to invest back into the business, so a lot of what we do is manual and not as efficient as it could be.
With all of this visibility and agility in place, what are the current challenges for the sector?
We as a sector have a lot to learn from private industry, especially in terms of tools and ways of doing things, while keeping in mind the humanitarian principles we have to stick to. For a commercial entity, it might be profitable for them to help in delivering life-saving products to, say, an army. But if private entities start delivering core humanitarian aid they could then outcompete us and we could lose funding. So we need to figure out a way of having better collaboration.
Frankly, the worst that can happen is that somebody says, we want to help these poor people; they need clothes so let’s go into our wardrobes and send whatever we have to a humanitarian organisation. But when we are sitting in Poland trying to sort care packages from the priority items that need to be delivered, that takes away time, effort and storage space. That’s why time and time again, humanitarian organisations say, please don’t send things, send money because with money we can get what is needed, not what people think is needed.
Where does sustainability fit into sourcing for humanitarian purposes?
We have built up collaborations on sustainability with several organisations. We now have an equal partnership and recently signed an agreement looking at sustainability in terms of humanitarian supply chain, the WREC project. One of the big questions we are pondering is where’s the delineation between saving life and saving the planet.
For instance, there’s a warehouse in Dubai where there’s a lot of stock sitting – a few years back we had a major hurricane in Mozambique and it would have been easier to put it on a ferry or a boat to send it from Dubai to Mozambique, right, but in those three weeks people would die. So do you fly them, which is bad for the planet or take the boat and let people die? On behalf of the entire community, we want to build this momentum to show how we can add sustainability into humanitarian supply chains.