Is a New Council the Key to Resilience in US Supply Chains?

The White House recently announced the formation of the Council on Supply Chain Resilience. But will it really help reduce supply chain issues in the US?

Global supply chains have spent a lot of time in the news over the past few years. The COVID-19 pandemic shone a bright light on global supply chain activities, showing a wider public audience a more detailed picture of organisational operations than many had seen before. Many organisations saw this period as a wake-up call, with many subsequently taking decisions that ultimately led to a reduction in complexity and risk.

Such was the impact of supply chain disruption at this time that President Joe Biden issued his ‘Executive Order on America’s Supply Chains’ in the first six weeks of his presidency, aimed at increasing the supply chain resilience, creating more focused and stronger review cycles, improving risk management, and bringing a focus on cyber and digital issues to the fore.

And now, with inflation decreasing and supply chains entering a more stable period, President Biden has doubled-down on his original Executive Order by creating a new Council on Supply Chain Resilience. But is it really the solution to protecting supply chains now and in the future?

Alignment, Diversification & Resilience

It’s no coincidence that The White House chose the 29th of November to make the announcement of the new Council, as Cyber Monday is traditionally one of the busiest online shopping days of the year. It’s estimated that American consumers spent in the region of $12.4 billion this year, creating enormous demands on supply chains in an already busy festive period.

With a recognition that supply chain pressures are at least in part to blame for high levels of inflation, President Biden has introduced a number of new measures aimed at improving resilience through diversification and strengthening of supply chains. These include:

  • Multi-million dollar investments in raw materials and green energy projects;
  • Shorter term reviews on key supply chains for semiconductors, EV batteries, mined rare earth minerals, and pharmaceuticals;
  • A full strategy for defence-critical supply chains to be published by the Department of Defence;
  • A national Supply Chain Data Summit, to be held in 2024; and
  • Requirements for Governmental Departments to review key supply chains and provide actionable reports on their findings.

In addition, the existing FLOW program (Freight Logistics Optimization Works) which brings together public and private organisations to create a more joined-up approach on supply chains, is to be expanded from its initial 18 members to cover more than 50 organisations.

The Council on Supply Chain Resilience

These are the measures, so who actually makes up the Council on Supply Chain Resilience, upon whom much of the responsibility for actually delivering this plan will sit? 

The Council itself is Cabinet-level, meaning that the vast majority of President Biden’s Cabinet Secretaries will be involved, along with a few other non-cabinet positions:

  • The Secretaries of Agriculture, Commerce, Defense, Energy, Health and Human Services, Homeland Security, Housing and Urban Development, the Interior, Labor, State, Transportation, the Treasury, and Veterans Affairs, and the Attorney General;
  • The Administrators of the Environmental Protection Agency and Small Business Administration; 
  • The Directors of National Intelligence, the Office of Management and Budget, and the Office of Science and Technology Policy; 
  • The Chair of the Council of Economic Advisers; 
  • The U.S. Trade Representative; and 
  • Other senior officials from the Executive Office of the President and other agencies.

Quite a list of Governmental and non-Governmental heavy hitters, all of whom will be expected to communicate and coordinate with supply chains in their respective areas, assessing key risks and issues, and reporting them back, and then working to remove barriers to the smooth operation of the supply chains.

Issue One – A Flawed Composition?

If all of this comes to fruition, and if all the new measures bear fruit in the way they are intended to, there could be some enormous benefits for supply chains and, by extension, consumers. 

However, there are some potential problems that may need to be addressed. The list of participants on the Council reads as a ‘Who’s Who’ of American politics, even to people with a limited knowledge of American politics. One glaring omission which may inhibit the smooth coordination outside of the Government arena and that is in the composition of the Council.

Various sources have been quoted as saying that few, if any, industry leaders or experts were consulted on the plans or invited to take part, while no Supply Chain Software companies were asked to input on the data initiatives.

At best this would appear to be an oversight, at worst a flaw that will only come fully to light if measures begin to fail. 

Issue Two – Reporting Cycles and Presidential Elections

In addition, reporting cycles may also hinder any real progress. Though many departments are being asked to review and report every 100 days, the Council itself only operates in 4-year cycles. This period seems extremely long, particularly with the pace of global change and the macro-economic factors facing many organisations and supply chains.

This 4 year period will also set the Council against the US election cycle.

The first reports from the Council are due in December 2024, by which time the world will know who will be in the White House hot seat for the next 4 years. Should President Biden lose this election, he will have a matter of weeks to review all of these documents and put measures in place on the back of them.

And should there be a new incumbent (former President Donald Trump is currently the front-runner for the Republican nomination), it would well mean a new raft of policies and thoughts, running contrary to what has been put in place. Many of President Trump’s policies in his first term focused on onshoring supply chains, and he could choose to disband any Council if he believes another approach would work better.

We can hope that the new Council will have plenty to deliver in the next 12 months beyond the reporting, though there may need to be some adaptation in order to meet the ambitious goals that have been set out.