Executive Order Lays Foundation for More Resilient Supply Chains

The COVID-19 pandemic and global health crisis that began in 2020 shed light on several supply-chain issues, weaknesses, and vulnerabilities. Ideally, during a crisis, the U.S. would be able to rise to the occasion, shifting gears quickly and efficiently to ensure that whatever resources are in short supply—whether it’s toilet paper, food, medicine, or something else—make their way into the hands of those in need. Unfortunately, at the beginning of the pandemic, this wasn’t the case. It became clear that, in general, supply chains in the U.S. weren’t quite as flexible and agile as they needed to be. And now, the White House is looking to create systemic change that could strengthen U.S. supply chains and prevent similar situations from happening again.

Recently, President Biden signed an executive order designed to create more “resilient and secure” supply chains for critical and essential goods. The first step outlined in the executive order is initiating a 100-day review to identify steps the government can take in the near-term to address vulnerabilities in the supply chains for four products: semiconductors, large-capacity batteries like those used in EVs (electric vehicles), critical minerals, and pharmaceuticals.

The order will also initiate a more in-depth review of U.S. supply chains focusing on six sectors over the course of a year. The six sectors are the defense industrial base, the public health and biological preparedness industrial base, the ICT (information and communications technology) industrial base, the energy sector industrial base, the transportation industrial base, and supply chains for agricultural commodities and food production. This year-long review will assess vulnerabilities, recommend ways to address risks and improve resiliency, and propose new R&D (research and development) opportunities. The executive order commits to making this an ongoing process by proposing a quadrennial review of supply-chain resilience in the U.S. Finally, the order also calls for collaboration, partnership, and consultation with outside stakeholders—namely, state and other local or tribal governments, industry leaders, academia, labor unions, NGOs (non-governmental organizations), and the general public.

Perhaps this last point will be the order’s most significant downstream effect. By calling for a consistent re-evaluation of supply chains, the administration is hoping to ensure standards don’t slip and the nation will be ready next time. If 2020 has taught the nation anything, it’s that crises are impossible to predict.

Efforts to gather data and recommendations for improvement will be an important step in identifying existing issues and, ultimately, finding fixes for these issues. However, what the order doesn’t identify is how IoT (Internet of Things) technologies can be a part of the solution for U.S. supply chains. Supply-chain innovation in the realms of improved sensing technologies, 5G connectivity, AI (artificial intelligence) and machine learning, blockchain, and robots and automation, among others, can be critical tools in helping the U.S. rebuild stronger in a post-COVID world. What’s more, these technologies could be allies in preventing disjointed supply chains during future crises. Digital transformation was already on the docket for so many industries, including supply chain, and the pandemic has only heightened the need for digitization.

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