smash and grab

a misguided attempt at component-based business

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> the demise of railtrack
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> loose coupling
> example
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taking apart the network formerly known as British Rail ...

Perhaps one of the worst examples of the component-based business in recent years has been the fragmentation of British Rail. This started as a politically inspired attempt to improve the economic performance of the UK railway network by introducing a commercially competitive structure. But this structure is now widely blamed for poor customer service, confused timetables, neglected track maintenance, and a series of appalling rail crashes. So what went wrong? Is there an fundamental flaw in the whole concept of the component-based business, were there particular factors here that made it difficult or impossible, or was this particular project just poorly planned and/or poorly executed?

It's worth noting that Swiss Railways has a federal structure, but hasn't suffered the problems faced by British Rail. Is this because the Swiss have more experience with federal structures, or because Swiss Rail hasn't faced any radical change?

component-based development -> component-based business

Rail Maintenance - Safety and Trust

veryard projects > component-based business > railways > rail maintenance

October 23rd, 2003

Three public events in close succession. The precise connections between these events have not been made public, but we can make some intelligent assumptions.

	The UK engineering firm Jarvis pulls out of the rail maintenance business.
	Jarvis is accused of falsifying records relating to rail maintenance contracts.
	Network Rail announces that all rail maintenance, previously outsourced to several engineering firms including Jarvis, will now be carried out inhouse.

5 year share price chart from BigCharts.com

3 month share price chart from BigCharts.com

One thing that stands out strongly is the relationship between safety and trust. The safety of the rail network depends (among other things) on our being able to trust in the rail maintenance process, and in those firms engaged in this process.

The allegations against Jarvis lead to a reduction in perceived trustworthiness - not just of Jarvis but of the whole industry. Even if the allegations are unfounded, and even if it is grossly unfair to paint all engineering firms with the same brush, trust has been damaged.

One of the most important lessons from this affair is that safety-critical engineering cannot be regarded as purely a techical matter, but requires attention to commercial / socioeconomic factors and stakeholder issues.

Safety
Trust

Book: "Broken Rails"

veryard projects > component-based business > railways > "Broken Rails"

Christian Wolmar. Broken Rails: How Privatization wrecked Britain's Railways.
Aurum Press, 2001

Wolmar has written an excellent and detailed account of the failure of the British Railway system. Just as the first edition came out, Railtrack was put into administration. The second edition is expanded to cover the later events.

component-based development -> component-based business
The Demise of Railtrack - From Railcrack to Failtrack
veryard projects > component-based business > railways > demise of railtrack

Railtrack PLC has finally gone broke. The UK Government has refused to make more funds available to Railtrack in its present form. So what went wrong?

Conflicting
Objectives The complex structure of the rail industry represented an attempt to introduce competition. And yet political lobbying at the time of privatization ensured broad protection of franchises and fares against true competition.

Fragmentation The British Rail network was decomposed into 50 companies, including 25 separate franchises. Railtrack itself handed responsibility for maintaining the infrastructure over to about a dozen prime contractors, and this responsibility was passed in turn to over 2000 subcontractors. At the time of the fatal crash at Hatfield, Railtrack had no clear understanding of the state of the network - and nor did anybody else.

Loss of Knowhow Railway companies have tried to cut costs by laying off staff at all levels, including managers and drivers, despite a significant growth in passenger numbers. "The net result has been a collective loss of memory on the basics of running a railway." (Chris Green, former BR manager who now runs Virgin trains.)
source: Financial Times, 8th, October 2001.

Financial Times

Curriculum of error

veryard projects > component-based business > railways > curriculum of error

	History	British Rail was created after several independent rail operators were merged under public ownership. It was often criticized for poor management, poor labour relations, poor customer service and poor economics.
	Politics	As part of its programme to denationalize anything that moved, the Conservative Government took a hatchet to British Rail.
	Economics	The structure imposed a particular model of inter-firm relationship. Each component has targets to reach, and this leads to conflicts of interest between the players.
	Geography	The preferred notion of competition required multiple operating companies in the same region, with a separate company responsible for the track.
	Law	The preferred notion of regulation set performance targets, and imposed fines for non-performance.

Loose Coupling

veryard projects > component-based business > railways > loose coupling

When you want to travel from A to B, you may have the opportunity to change trains. There is a curious fact about changing trains. Passengers appear to know more about the possible connections between trains than the train operators do. When you talk to railway staff about a missed connection, they will usually say that it's not a "booked" connection. In other words, if it's not in the book, they don't officially know about it.

If you can pretend that connections don't exist, then you don't have to bother when the connections are missed. This is a highly convenient form of loose coupling for the train operators - but can be highly inconvenient for the passengers.

Example

veryard projects > component-based business > railways > example

Source: Frank Wood

incident

It is raining. A train is standing at a red signal. The signal turns to green and the train moves off. One of the train's motors is defective, and because of this the wheels spin. Each wheel has a metal tyre, and the friction causes part of it to be flattened.

results

Because the wheels are no longer perfectly round, parts of the wheel bang down on the track. This increases wear on the insulated block joints and will eventually cause signal failure.

The heat caused by the spinning wheels causes star fissures around fish plates holding rails together. This will eventually cause signal failure - and also the track will have to be repaired.

The wheel spin causes additional strain on the remaining motors.

conflict of
interest

The component that is responsible for running trains on time will be reluctant to slow trains down.

Train maintenance and signals do not want the extra expenditure caused by trains not being (as they see it) "optimally" driven.

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Thanks to Frank Wood for input.

	Conflicting Objectives	The complex structure of the rail industry represented an attempt to introduce competition. And yet political lobbying at the time of privatization ensured broad protection of franchises and fares against true competition.
	Fragmentation	The British Rail network was decomposed into 50 companies, including 25 separate franchises. Railtrack itself handed responsibility for maintaining the infrastructure over to about a dozen prime contractors, and this responsibility was passed in turn to over 2000 subcontractors. At the time of the fatal crash at Hatfield, Railtrack had no clear understanding of the state of the network - and nor did anybody else.
	Loss of Knowhow	Railway companies have tried to cut costs by laying off staff at all levels, including managers and drivers, despite a significant growth in passenger numbers. "The net result has been a collective loss of memory on the basics of running a railway." (Chris Green, former BR manager who now runs Virgin trains.) source: Financial Times, 8th, October 2001.