Supply chainsBiden Orders Review to Bolster Supply Chain Resiliency
President Joe Biden signed an executive order on Wednesday to formally order a 100-day government review of global supply chains and potential U.S. vulnerabilities in key industries including computer chips, electric vehicle batteries, pharmaceuticals and critical minerals used in electronics. On top of the 100-day review of these four key industries, Biden’s order also directs yearlong reviews for six sectors: defense, public health, information technology, transportation, energy and food production.
President Joe Biden signed an executive order on Wednesday to formally order a 100-day government review of global supply chains and potential U.S. vulnerabilities in key industries including computer chips, electric vehicle batteries, pharmaceuticals and critical minerals used in electronics.
The order aims to avoid repeating the severe lack of personal protective gear such as face masks and gloves that the country experienced during the early months of the coronavirus pandemic last year. It comes as American automakers grapple with a shortage of semiconductors, critical elements in navigation and entertainment systems in modern vehicles.
“The COVID-19 pandemic has underlined the need for resilient supply chains and robust domestic manufacturing, so all Americans have access to essential goods and services in times of crisis,” White House press secretary Jen Psaki told reporters last Thursday.
On Wednesday, a senior White House official speaking on background told reporters that “President Biden committed last year to directing the U.S. to take a comprehensive approach to securing supply chains, and the executive order that the president will sign tomorrow afternoon kicks off that process.”
On top of the 100-day review of the four key industries, Biden’s order also directs yearlong reviews for six sectors: defense, public health, information technology, transportation, energy and food production.
According to the official, the reviews will be modeled after the Defense Department’s process to evaluate and strengthen the defense industrial base and may include the president’s invocation of the Defense Production Act or other financial incentives. The DPA is the primary source of presidential authorities to expedite and expand the supply of materials and services from the U.S. industrial base needed to promote national defense.
Supply chain experts welcome the administration’s move.
“We could talk about buying American all we want but if we have not ensured the supply chain is functioning, we’re going to continue to have shortages and stock outs,” said Nada Sanders, a professor of supply chain management at Northeastern University.
While most of the work to ensure supply chains are resilient happens at the firm level, federal support to look at the problem holistically is seen as critical to help U.S. companies to invest strategically and become more agile at reacting to fluctuations of supply and demand in times of crisis.