Arriving in Cuba for the first time is like stepping into a time capsule that has preserved different periods of the country’s history, and then mixed them all together. There’s old Havana, the center of the city, filled with block after block of cobblestone streets and two and three story Spanish Colonial buildings. Then there is Art Deco Havana with houses and buildings from the 1930s and 40s painted pastel shades of yellow, pink, green and blue. And of course there is Soviet era Havana with its square, concrete apartment blocks and office buildings. In some parts of the city buildings are run-down and much in need of repair. In other parts, buildings are being restored and turned into art galleries, restaurants and clubs. Circulating through this urban collage is a stream of traffic composed of brightly colored and polished American cars from the 1950s (Cadillacs, Ford Fairlanes, Chevy Nomads), grey Russian Lada sedans from the 1980s, beat up trucks and buses, plus shiny new Hyundai cars and vans. You are seeing the impact of the supply chains that supported the country’s development.
As you visit different parts of Havana you realize there were different supply chains that supported each of these periods: Colonial; Deco; and Soviet. The city’s development and architecture is so visibly shaped by the supply chains that supported it during those different periods. Havana first rose to prominence because it was the place where the Spaniards brought together the gold and silver they found in the New World. In the fortified harbor of Old Havana they loaded this treasure onto fleets of galleons every year for transport to Spain. Then as the gold and silver ran, out it was replaced by sugar. For some 200 years Cuba was where much of the sugar came from that fed Europe’s insatiable demand for sweets.
Suddenly in 1898 the Spanish colonial supply chains came to an end, and the Americans (with Teddy Roosevelt and the Rough Riders leading the way) set up new Cuban supply chains focused on trade with the United States. Then came the Soviets in 1961 (with Fidel and Che leading the way). Cuba exported its sugar and rum and tobacco to the Soviet Bloc and got everything else it needed in return. But once again, that changed in 1991 with the collapse of the Soviet Union. And that was the start of a time they call the “Special Period”.
Talking with Cubans you get the idea they have learned something from their experiences with supply chains. First Cuba was dependent on Spain, then the United States, and then Russia. Cuba learned something about putting all its eggs in one basket. They learned that when the basket breaks everything changes, and those changes are abrupt and hard to control.
Cubans seem eager to see things change again, but they don’t want the changes to be so abrupt, and they aren’t eager to simply exchange one master for another. They want supply chains that give them choices and don’t tie them so closely to just one source of supply.
In talking to people you hear them say life was good in the 1980s; Cuba supplied the Soviets with sugar, rum, and cigars; and in return they got everything else they needed. But suddenly the Soviet Union was gone, and so was everything else they needed. They talk about those years of the Special Period in the early and mid ’90s as a time when many people ate only one meal a day, and that meal was rice and beans. They talk about gasoline being almost impossible to find, and how China provided them with thousands of bicycles, but because they had so little to eat (and bicycles require a lot of effort), people would pass out in the streets from exhaustion.
The Special Period brought home some very important lessons. It’s what happens when an abrupt and unexpected change occurs due to a single source supply chain falling apart. In the business world this is referred to as “business continuity” and “supply chain risk management.” Those lessons prompted Cuba to start experimenting with mixes of communism and capitalism. They started allowing people to start up small businesses such as taxi cabs, restaurants, and art galleries. And to find customers for those businesses and gain entry into the global economy, the Cuban government started joint ventures with European hotel chains and Asian manufacturing companies. Now they are promoting tourism, and stepping up their cultural exchanges to show off their talented artists, musicians, doctors and engineers.
[A classical music concert in the Plaza de la Catedral – Street scenes in Spanish Colonial Havana – View from my hotel room of Soviet Havana]
Economics is called the “dismal science” because of the way its realities limit options, and require hard choices about where to place resources. Maybe supply chain management could be called the “pragmatic science” since supply chains are what enable the success of any economic choices a country may make (or doom those choices to failure).
For the last 55 years Cuba’s history has been driven by decisions it made to cope with the sudden changes that came about when its previous single source supply chain with the United States was cut off by the embargo. Now as that embargo is slowly being lifted, this country is set to open up to a future where diversity and pragmatism will hopefully win out over purely political concerns.
The story of history seems to be all about courage and creativity, and much of it is. Yet over the longer term, it’s also about supply chains. The more diversified a country’s supply chains are, the more independent that country can be. Fidel and Che had courage and big ideas, but 55 years ago, did they realize the importance of supply chain resilience and sustainability? Cuba is a study in how supply chains influence a nation’s development.
Author’s Note: Michael Hugos – I spent a week in Cuba in October 2015 as a member of a cultural exchange group from the United States. Picture of Che Guevara and Fidel Castro, 1960 — courtesy Cuban Ministry of Education.