We’ve toiled away for years in relative obscurity and have had to explain over and over to our friends and relatives what we do for a living. We’ve been the obscure operations backbone behind the scenes that make our companies function.
But the pandemic and now Biden’s Executive Order have brought the limelight to supply chain professionals and to the work that we do. We are the movie stars of this new story.
President Biden signed an Executive Order on Feb 24, 2021, directing a broad review of supply chains for critical materials—from semiconductors to pharmaceuticals to large-scale batteries to rare-earth minerals—to support domestic production and strengthen ties with allies to address supply chain issues. The EO calls for a 100-day review and subsequent actionable report by named agencies. Here are a few highlights:
- The United States needs resilient, diverse, and secure supply chains to ensure our economic prosperity and national security.
- Resilient American supply chains will revitalize and rebuild domestic manufacturing capacity, maintain America’s competitive edge in research and development, and create well-paying jobs.
- Close cooperation on resilient supply chains with allies and partners who share our values will foster collective economic and national security, and strengthen the capacity to respond to international disasters and emergencies.
The EO goes on to call for separate year-long investigations of supply chain risk in six industry sectors: defense, public health, communications technology, energy, transportation, and food production. These supply chains also include emphasis on American manufacturing and reshoring, in a way that was not generally articulated in the past. Previous government executives seemed to think that supply chains simply include the purchase of raw materials and finished products coming from China. This EO demonstrates a broader understanding of supply chain complexities that include sourcing and manufacturing. It even covers reshoring manufacturing and the risk of climate change on American factories.
Supply Chain risk exposed by the pandemic includes broad ranges of industries. A global shortage of semiconductors is expected to last at least through the end of the year, causing difficulties in a range of industries. Semiconductor shortages seem to be a combination of increased demand as people bought electronics during the COVID-19 pandemic, plus limited manufacturing capacity to meet that demand and the impact of the U.S.-China trade war.
Biden stated that the solution to supply chain issues will be to increase domestic production in certain industries as well as to work with allies to prevent future shortages. As we know, Executive Orders are policy statements with few executable actions. This EO on supply chains is different. It calls out specific responsibilities and actions assigned to specific government agencies.
In the ending paragraphs, President Biden calls out reform of domestic and international trade rules. Hopefully, this will include the renewed support for the WTO and the ability to resolve disputes in a world court. There is also a lot of positive buzz about Katherine Tai, the nominee for U.S. Trade Representative.
“We all recognize that the particular problem will not be solved immediately. In the meantime, we are reaching out to our allies, semiconductor companies, and others in the supply chain, to ramp up production to help us resolve the bottlenecks now,” Biden said. “We need to stop playing catchup.”
It’s not that EOs from the previous administration on things like critical minerals didn’t state similar policies. But this time, there are specific assignments to address these issues and knowledgeable, capable people to carry out the orders.
Get ready supply chain professionals – the floodlights are on you.