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Friday Insights

Variety bites!

A lesson in building resilience..

Came across this great nugget of trivia that got me thinking. We all know how the Russia-Ukraine war has been a major threat to food security. Especially for Corn, Wheat, and Soybean, of which Ukraine is among the major producers in the world. Before the war, majority of Ukraine’s grain exports used to be through the Black Sea ports such as Odessa and Mykolaiv. Grain would come to the ports by rail and would get loaded onto ships. After the Russian attack this route was no longer available, and the shipments had to be done through Romania and Poland, by rail. But this is where a new problem emerged. Ukraine’s railroad uses the Russian standard for railroad tracks, which is wider than the European tracks that use the 1435 mm gauge standard. So now, the grain coming in from Ukraine had to be unloaded at the Romanian and Poland borders and loaded back on to the train cars that are suitable for the European tracks. A slow process that created a huge bottleneck for the supply of very essential commodities. Curious, I searched to check how many different rail-track standards are there across the world, and their geographic spread. The figure below (Source: Agrico Group Website) was a revelation. Rail roads being such a critical transport mode for inland transport such extent of variety must be a real bottleneck for cross border inland transportations. The way that ‘containerization’ in the 1960s revolutionized shipping would never be possible for rail transportation with such variety of rail track standards across the world. While bringing in rail track standardization will probably never materialize given the huge investment implications, geo-politics and so and so forth, my thought was more on – to what extent can we control needless variety in our own organizations? In terms of standardization of components, products, policies, processes, and systems? In which areas do differentiation generate value? In which areas do they become a bottleneck? To what extent are we carrying our past baggage that need to be discarded as we prepare ourselves for the future? Some food for thought as we continue in our quest of building resilient supply chains.. Read More