Retail industry groups are saying a White House report released yesterday is “spot-on” with its recommendations on ways to assess and strengthen the vulnerabilities of critical supply chains, but individual companies will have to play a larger role as well.
The Biden Administration report calls for establishing a Supply Chain Disruptions Task Force, leveraging data to track and monitor supply chain performance, and convening a global forum on supply chain resilience. In addition, the policy document highlights “the need for a whole-of-government approach to building supply chain resiliency and competitiveness, urging the creation of an office of supply chain to coordinate across a siloed government,” according to the Consumer Brands Association.
“Modern supply chains are complex, and there is no silver bullet solution to achieving resiliency,” Consumer Brands Association President and CEO Geoff Freeman said in a release. “Rigorously tested throughout the Covid-19 pandemic, the CPG industry possesses unique insight into issues that impact the availability, affordability, and accessibility of everyday products. Unprecedented consumer demand has contributed to rising costs and strained supply chains. The private sector has stepped up to meet these challenges, but government needs to play a critical role.”
The report, titled “Building Resilient Supply Chains, Revitalizing Manufacturing, and Fostering Broad-Based Growth,” is the result of a 100-day review of the supply chain for certain products, commissioned under President Biden’s Executive Order 14017.
The review focuses specifically on vulnerabilities in providing supplies in four sectors: semiconductors, large capacity batteries, critical materials and minerals, and pharmaceuticals and active pharmaceutical ingredients. It suggests strategies for improving the supply of goods in each category, and forms a supply chain disruptions task force designed to address short-term bottlenecks and temporary mismatches between demand and supply resulting from the nation’s economic reopening following the Covid-19 pandemic.
Although the report is focused on those four key sectors, it will likely have repercussions on a far wider array of goods, said Johnathan Foster, principal consultant with Proxima, a procurement consulting firm. For example, if the strategy is successful in lifting constraints on computer chips, that move could reinvigorate automotive plants that are now stalled as they await missing components, and thus boost demand for related goods such as steel, rubber, and plastic, he said.
“It will open dialogue about constraints that are hamstringing all supply chains and not just the focus group. Freight and supply chain issues tend to be agnostic with common symptoms and issues. Solving for one issue naturally solves for another,” Foster said in an email.
That tight linkage means the plan could also affect additional consumer goods, since the new task force will include funding from the U.S. Department of Agriculture (USDA) to strengthen and diversify food supply chains, according to Patty McDonald, global solution marketing director at logistics technology vendor Symphony RetailAI.
“Over the past two years, food retailers have not only been concerned with how to prepare for and respond to changes in consumer buying behavior, but also any disruption within the supply chain that is unexpected, such as weather, price, and economic shifts,” McDonald said in a statement.
“The White House task force announcement today is only one step in realizing how indispensable yet vulnerable the food supply chain is, and will aide companies in establishing systems to ensure more efficient supply chain management. However, as we move forward, it is up to grocers and food retailers to take the necessary steps to implement a future-proof supply chain infrastructure that has the ability to address disruptions and shortages before they occur.”