Design and Control Principles for Non-Profit Supply Chains

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While America has the strongest national economy with a GDP of 12.4 trillion dollars in 2005, thirty-six million Americans suffered from hunger in that same year. Twenty-five million of these Americans rely on America's Second Harvest (ASH) and their network of pantries, shelters and soup kitchens for food. The largest suppliers to these agencies are regional and local food banks, which serve as distribution centers to collect, store and distribute food. Much of this food comes from surplus food. According to the Department of Agriculture, 100 billion pounds of food are wasted each year in the United States. The goal of ASH and related agencies is to match surplus food with those in need. This matching is a large-scale distribution and inventory management operation, performed daily by thousands of non-profit agencies across the country. Much research has been conducted in academia and the private sector on supply chain problems in commercial settings where the goal is to maximize profit or minimize cost. Little work has been conducted in non-profit applications where the objectives are often more difficult to quantify since issues such as equity and sustainability must be considered. Our work will design efficient control and management principles for non-profit supply chains that are involved in food distribution, based on our on-going work with the Greater Chicago Food Depository, a member of the ASH network of food banks.The alternative objectives of non-profit distribution operations lead to new variations of traditional problems in operations research and operation management. We consider dynamic inventory allocation problems and vehicle routing problems with non-traditional objective functions that are aimed at equity and sustainability rather than profit. Our main objective is to develop a series of analytical and simulation models to generate decision rules and insights for effective management of non-profit inventory/distribution networks. We believe that this project will strengthen the relationships between non-profit organizations and academia, and stimulate the interest of the operations research and operation management community toward studying operations of non-profit agencies.