White House unveils plan to build supply chain resilience
New Biden administration actions for supply chains include a cross-governmental council, use of the Defense Production Act for essential medicines, and data sharing and analytics.
The Biden administration wants to build up U.S. supply chain resilience with 30 new actions it unveiled Monday.
In a statement, the White House described the list as critical to helping Americans get the products they need when they need them, making sure businesses have reliable deliveries, strengthening U.S. agriculture and food systems, and supporting U.S. workers.
"Robust supply chains are fundamental to a strong economy. When supply chains smooth, prices fall for goods, food, and equipment, putting more money in the pockets of American families, workers, farmers, and entrepreneurs," the White House statement said.
Supply chains have been a focus of President Joe Biden's administration from the start. Actions include the signing of an executive order on America's supply chains and the formation of the Supply Chain Disruptions Task Force in 2021 that brought together governmental and private entities to address COVID-19 pandemic-related disruptions.
Subsequent efforts to address supply chain resilience include the Chips Act, which intends to bring semiconductor manufacturing to the U.S., as well as the Inflation Reduction Act and the Bipartisan Infrastructure Law, which make investments designed to boost manufacturing and strengthen supply chains.
The creation of the Council on Supply Chain Resilience, which convened for the first time Monday. The council includes the heads of cabinet departments and chairs from economic, national intelligence and environmental councils and offices. The Council on Supply Chain Resilience is chaired by Lael Brainard, director of the White House National Economic Council, and Jake Sullivan, White House national security adviser.
Use of the Defense Production Act of 1950 to increase the production of essential medicines in the U.S. and mitigate drug shortages.
Cross-departmental supply chain data-sharing capabilities, including partnerships to improve supply chain monitoring and strategy. This will include the Department of Commerce's Supply Chain Center to integrate industry expertise and data analytics to develop supply chain risk assessment tools, as well as the Department of Transportation's Freight Logistics Optimization Works program, a public-private partnership to create a shared view of supply chain networks and facilitate a more reliable flow of goods.
Supply chain resilience a Biden concern
The administration's list was not surprising, given that Biden has made promises to try to shore up supply chain concerns throughout his campaigns and presidency, said Douglas Kent, executive vice president for corporate and strategic alliances at the Association for Supply Chain Management (ASCM). But, he added, the push to operationalize supply chain resilience is important.
There are lots of ways to try to build [supply chain] resiliency, and focusing on putting a structure and infrastructure together with monetary and resource support is a good thing for the government to do.
Douglas KentExecutive vice president for corporate and strategic alliances, ASCM
"There are lots of ways to try to build resiliency, and focusing on putting a structure and infrastructure together with monetary and resource support is a good thing for the government to do," he said.
The primary intent is to remove gaps in the supply chain that can affect the U.S. economy and national defense, Kent said. There's also a secondary aspect of shoring up domestic jobs and returning some manufacturing to the U.S.
The White House's 30 actions will help address some of the top supply chain trends for 2024 that ASCM identified in a recent report, including the digitization of supply chains and reshoring of manufacturing, Kent said. One measure that companies are investigating is designing supply chains that are less dependent on China by sourcing raw materials and locating manufacturing in the U.S. or other countries that are considered more reliable allies.
"Supply chain network redesign is a critical answer to resiliency," Kent said. "A lot of the factors that they're putting forward is to bring that activity closer to home or to reduce the dependency on nations where our current footprint could put us at risk."
Another part of the White House's plan centers on digitization and data-sharing technologies, Kent said. That includes a focus on investing in interagency information sharing and making sure different departmental functions within the government have supply chain visualization capabilities.
"This is so they're able to share information and hopefully get ahead of any potential risks because they have the foresight to do so," he said.
However, there are challenges in attempting to do this type of data sharing, primarily data hygiene and trust, Kent said.
"Neither of those are insurmountable, but they're both pretty big issues to tackle," he said. "Certainly, it's not good having transparency into information that is riddled with inaccuracy or the hygiene of that data is not there, even if you make it reside in a control tower-like system."
This graphic shows the top 10 trends in supply chain for 2024, according to the Association for Supply Chain Management.
Regardless of data-sharing challenges, the Biden administration's list emphasizes supply chain disruption as an issue that needs to be addressed now, said Michael Dominy, vice president for supply chain research at Gartner.
Geopolitical factors in the past few years are forcing this, including the COVID-19 pandemic, the war in Ukraine, and continued tension between China and Taiwan, he said.
"Making sure we have a more resilient supply network definitely makes sense. It's a reaction to all the disruptions that we saw and continue to see," Dominy said.
He agreed that companies have had to rethink their supply chains to not be so dependent on China.
"For a while, everything was about having to make it in Asia, and how to squeeze out more cost and make it as lean as possible, so there were a lot of brittle aspects of the supply chain," Dominy said. "That makes folks rethink what they're doing, like moving manufacturing [out of China] -- not necessarily back to the U.S., but having some in Mexico and other countries."
It's also about bringing things such as rare-earth minerals and other raw materials to the U.S. to help protect supplies that are necessary for national defense or critical industries, he said.
"Building some of those capabilities because of deep risks eliminates us from being so dependent on and vulnerable with some of these core materials," Dominy said. "That's just recognition of the reality today around tensions with other global powers."
Jim O'Donnell is a senior news writer who covers ERP and other enterprise applications for TechTarget Editorial.
