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Rethinking supply chain shortages: government partnership with the private sector offers the best way forward

In a matter of days during March of 2020, the novel coronavirus exposed immense vulnerabilities in America’s supply chain of critical materials and products. There were shortages of medical supplies, PPE, and components needed to produce everyday goods. Americans quickly discovered how dependent the United States is on other parts of the world for the materials and components to make everything from life-saving pharmaceuticals and medical devices to electronic chips and tech components. Who knew cars, refrigerators, and washing machines need semiconductor chips and that the bulk of the raw material and rare earth minerals comes from outside our borders?  

Recent incidents further illuminate how cracks in the supply chain can threaten the country’s national security and overall wellbeing. Just weeks ago, ransomware attackers effectively shut down the Colonial Pipeline gas pipeline for 11 days, generating a massive gas shortage along the East Coast. Earlier this year, the Ever Given cargo ship was wedged in the Suez Canal for six days, halting $9 billion a day in maritime commerce. Approximately 10 percent of world trade flows through the Suez Canal on an annual basis.

Today's supply chain is not your grandfather’s supply chain, reliant on local stockpiles of goods. Instead, it is global, complicated, and vulnerable to unconventional threats, including extreme weather, environmental damage, disease, and cyberattacks.

It is time to dramatically rethink our approach to managing our critical supply chains to anticipate and respond to future disruptions more rapidly. Strong public-private partnerships that focus on four key areas visibility, coordination, agility, and trust — will be vital to building and maintaining a flexible, resilient, and durable supply chain. 

Increased visibility of the entire supply chain will enable situational awareness and rapid decision-making. For example, can government and private organizations partner to use Artificial Intelligence (AI) predictive analysis for microtargeting to reach people who are hesitant to get a COVID-19 vaccine? How about connecting farm surplus with hungry families? Much of the data needed to improve supply chain visibility already exists in government and private-sector information systems. With appropriate safeguards and coordination, we can use existing data to create real-time dashboards and more precise and predictive forecasts about our supply chain. AI tools, data analytics, and various innovative technologies generate more accurate simulations and visibility. Industry partners can use their expertise and applied innovative technology to provide meaningful information on optimizing supply chains.  

Improved coordination will enable faster and more efficient management of supply shortages, demand spikes, disruptions, and threats. Coordination should cut across government entities and significantly expand public/private collaboration. COVID-19 made clear the necessity of government coordination and leadership. It also showed that a whole-of-government approach, combined with private-sector involvement, can effectively decrease vulnerabilities in the supply chain and address future challenges and threats.  

Through enhanced agility, manufacturing and distribution industrial bases can pivot more quickly to meet rapid demand fluctuations or disruptions. It will also increase American global competitiveness. Agility spans the spectrum from more modular design in complex equipment to manufacturing facilities that can quickly change product lines. In addition, the industry's ability to respond swiftly to changing demand signals is enhanced when government and industry work together.

And, as we have seen with the recent ransomware attack on the Colonial pipeline, trust must be at the very foundation of America’s future supply chain. Trust and transparency between private industry and government will be crucial to identifying supply chain vulnerabilities early and resolving them quickly. Investments in verification and early detection of supply chain threats, such as hacking, counterfeiting, and contamination, will strengthen trust. Federal leadership that provides coordinated and definitive cybersecurity guidance, actionable recommendations, and timely assistance and response is critical to establishing trust.

The Biden Administration, legislators, and industry all recognize the importance of U.S. Federal Government leadership in developing and implementing a modern, secure American supply chain built on a foundation of visibility, coordination, agility, and trust. America’s supply chain challenges will only be solved by government and industry working together.