Optimising for Resilience. Redundancy as a trade-off

We, people, are smart enough to engineer two-stage turbochargers in truck engines rather than the more effort- and cost-saving, hence more optimized, single compressors. A sacrifice readily made to tackle large inertia and better coverage of the entire operating range of the engines. Yet again we tend to build transport businesses pivoted around a single preferential resource, multiple workflows dependent on single actions like for example physical stamping or otherwise approval, sales focused on a single segment of an otherwise fragmented market. All for the sake of higher optimization. Why as engineers of truck engines we are quite able to see the link between duplication of critical components and the increased resilience of the whole engine but not as entrepreneurs “engineering” our business? Is it another fallacy of human logic?

Optimisation for higher yields traditionally aims at lowering costs, identifying waste and eliminating duplications to benefit from reduction of redundancy and costs and therefore increase in efficiency. Sounds and works great in the short run. However, operating on a longer horizon, workflows tend to intensify significantly, markets are vulnerable to disruption and companies are more than likely to hit a bump that can choke and stall the “engine” that was so painstakingly optimized to generate higher revenues. Suddenly you are in the midst of a crisis no one saw coming, which can easily eat away all profits. Only that it was not sudden at all but was, instead, slowly burning under the floor, crawling within the internal structures and heating up critical workflow interaction nodes over time until something gave away.

So is redundancy really the enemy of optimization? Engineers understand that the intentional duplication of critical components or functions of a system increases its resilience. Its ability to recover from disruptions and uncertainties, bounce back from crises and maintain reliable service in the face of adversity. Its flexibility if you like. Systems more used to emergencies and calamities are usually better prepared – think of the military or Darwin’s natural evolution. Isn’t it time we apply similar tactics to transport and logistics businesses as well? Because failures there can affect the entire supply chain and ultimately the lives of all of us. Resilience comes, however, at the cost of some efficiency. Nevertheless, it is a cost well covered since cyclical disturbances of multiple effects are practically certain in the long run.

It is a challenging task, no doubt about it. Putting it off, however, is likely to cause even more challenging times. Defining the resilience of a business or any of its services comes from the understanding of how it responds to various disturbances under normal operating conditions, how large disruptions it can tolerate and how quickly it can restore to normal operation. A kind of a stress test to understand how much it can be pushed and still adapt rather than break. Then the challenge is to figure out the optimal pre-crisis access to resources and capacity levels, the optimal reconfiguration actions during the crisis and the optimal resources spent during entire recovery process. Sufficient transformative capacity of the business in terms of supplies, funds, fleet capacities, markets, subdivisions, processes, IT infrastructure, teams and people is key.