Do We Need a Federal Office of Supply Chain?
Discussions about the supply chain chaos that has emerged with the COVID-19 pandemic are frequently linked to the barriers and vulnerabilities associated with a globalized supply chain.
But what about constraints right here at home?
With so many players involved across industries and at the state and federal levels, it’s no wonder the domestic supply chain is more often a disjointed conundrum than a well-oiled machine.
In that context, the Consumer Brands Association (CBA) is calling for a federal Office of Supply Chain (OSC) to coordinate strategies across public-private sectors.
In a post about the CBA request, Tom Madrecki, VP of Supply Chain and Logistics for CBA summarized the need and also addressed what some may fear an OSC would mean.
“Far from heralding bigger government or yet another agency, such an entity would actually make better use of what we already have. The U.S. is not lacking in supply chain policy—in fact, it’s quite abundant. Many different policies impact businesses and ultimately the consumers those businesses serve. But the interplay between those policies and the private sector has not been fully documented or well understood…”, he wrote.
The call for an OSC is the result of a study conducted by the CBA in collaboration with the Council of Supply Chain Management Professionals (CSCMP) and Iowa State University that included input from 25 supply chain thought leaders, as well as data gathered from published supply chain research, and government and NGO documents.
As the CBA notes in its overview of the results, “The most critical conclusion of the study is the need for a federal office of supply chain, responsible for the oversight and coordination of public policy affecting private sector supply chains. At present, policies, investments and regulations affecting supply chains emanate from multiple departments and agencies, creating conflict, inefficiency and invisibility into challenges of consequence to Americans. A dedicated office focused on improving supply chain security, efficiency and resiliency, with key performance indicators to monitor the success or progress of its initiatives, would have been an asset throughout COVID-19 response and still can be in the future.”
The CBA published its findings and recommendations in U.S. Supply Chain Policy Priorities—A Case for a Federal Office of Supply Chain. Here, we’ll take a bird’s eye view of the report.
Building a Case
The report begins with a scenario that many private sector supply chain stakeholders may long for.
“A major role of government should be to establish policies that are facilitative and enabling of private sector supply chains’ development and adoption of new technologies and managerial practices that lead to improved performance. A corollary of enabling policies is the elimination or reduction of unnecessary and restrictive regulations that hinder operational efficiency and inhibit innovation.”
However, as noted in a cited 2013 report by the World Economic Forum (WEF), most governments aren’t organized in a way that supports an optimized supply chain, since logistics are handled by many different agencies. As a result, supply chain efficiency is greatly reduced.
When the siloes of federal agencies are eliminated, the CBA report predicts this should “help the U.S. develop a more comprehensive, integrated and coherent national supply chain and economic growth strategies in a more expeditious manner.”
And failure to do so will not only lead to suboptimal public policy, but “threatens our ability to compete with our major economic rivals, most notably China.”
Input from Supply Chain Thought Leaders
When the supply chain thought leaders who participated were asked for their input regarding major issues, challenges, and potential solutions, six areas were identified as the most important in terms of public policy focus.
Optimize freight movement over national transportation networks. Specific concerns related to the driver shortage, transportation infrastructure, and freight capacity visibility.
Increase the skilled labor pool for supply chain. “Deficiencies in the current labor pool and the changing skill sets required of employees were mentioned by nearly every thought leader.”
Increase harmonization and digitization. “Several thought leaders lamented the lack of harmonization or standardization of various governmental regulations across the nation.”
Improve urban/metro freight logistics. “Multiple thought leaders noted the challenges associated with urban deliveries…”
Promote supply chain technology, process and service innovation. “The federal government approval process for new technologies tends to be slow, explaining why many new technologies are developed or tested outside the U.S. This jeopardizes the country’s position as a global leader in innovation.”
Identify, manage, support and protect critical supply chains. The pandemic has revealed “deficiencies and vulnerabilities in the supply chains of critical products, components and ingredients. This includes the need to have greater control within the nation of these essential items and the need to prioritize the protection of workers in critical supply chains.”
The experts also provided specific recommendations to address each area of focus, which can be found in the full report.
Recent Public-Private Sector Initiatives
According to the report, “There are noteworthy recent policy statements and initiatives from key government agencies that reveal a keen awareness of the benefits of collaborating with the private sector on supply chain matters and a greater willingness to do so.”
Among those mentioned are the U.S. Food and Drug Administration’s (FDA) Blueprint for the Future and the U.S. Department of Transportation’s (DOT) National Freight Strategic Plan.
FDA’s Blueprint for the Future
Released in July of 2020, the FDA’s New Era of Smarter Food Safety – FDA’s Blueprint for the Future includes four foundational pillars:
Smarter Tools and Approaches for Prevention and Outbreak Response
New Business Models and Retail Modernization
Food Safety Culture
In the following video, Frank Yiannas, Deputy Commissioner of Food Policy and Response, and FDA Commissioner Stephen M. Hahn, M.D., discuss the release of the Blueprint.
U.S. DOT’s National Freight Strategic Plan
In September of 2020, the U.S. DOT released its National Freight Strategic Plan. According to the U.S. DOT, “The National Freight Strategic Plan defines the U.S. DOT’s vision and goals for the Nation’s multimodal freight system and defines strategies to achieve those goals. The Department developed this Plan through a multi-agency effort involving extensive consultation with freight stakeholders in both the public and private sectors…”
The vision for the Plan is that “The freight transportation system of the United States will strengthen our economic competitiveness with safe and reliable supply chains that efficiently and seamlessly connect producers, shippers, and consumers in domestic and foreign markets.”
Strategic goals include:
“Safety: Improve the safety, security, and resilience of the national freight system.”
“Infrastructure: Modernize freight infrastructure and operations to grow the economy, increase competitiveness, and improve quality of life.”
“Innovation: Prepare for the future by supporting the development of data, technologies, and workforce capabilities that improve freight system performance.”
The following principles will guide the U.S. DOT’s leadership in meeting those goals:
“Modernize or eliminate unnecessary or duplicative regulations that inhibit supply chain efficiency, reduce incentives to innovation, delay project delivery, or raise costs to shippers and consumers; while protecting safety and environmental outcomes.”
“Improve cross-sector, multijurisdictional, and multimodal collaboration to enhance intermodal connectivity and first-and last-mile connections, streamline interstate policies and regulations, and support multi-state investment.”
“Provide targeted Federal resources and financial assistance to support freight projects that provide significant benefits to the national economy.”
“Invest in freight data, analytical tools, and research to enhance the abilities of State, regional and local agencies to evaluate and address freight issues.”
The following video provides an overview of the National Freight Strategic Plan rollout.
CBA’s Critical Infrastructure Supply Chain Council
Also highlighted in the report is the Critical Infrastructure Supply Chain Council (CISCC) launched in May 2020 by the CBA. The report touts it as “an excellent example of supply chain collaboration within the private sector.”
This alliance of more than 100 trade associations across multiple industries is “committed to the common goal of advancing uniform, national policies that strengthen the nation’s supply chains and ensure the timely flow of critical products.”
According to a CBA press release announcing the CISCC, “the CISCC seeks to advance uniform, national polices that strengthen the country’s supply chains and ensure the timely flow of critical goods. The CISCC will:
Share information with federal, state and local officials regarding the importance and operations of critical supply chains, as well as provide recommendations and suggested best practices.
Leverage the experience and resources of its members to engage federal, state and local governments to find solutions when there are potential breakdowns.
Serve as a forum across industries to anticipate, spotlight and address future supply chain challenges.”
The Power of Effective Collaboration
In June of 2020, the CBA announced another collaborative initiative, the Contactless Delivery Task Force. According to the press release, the CBA “brought together 23 consumer packaged goods (CPG) companies and retailers to launch a new task force that will study the impact of a contactless pick-up and delivery protocol to create greater efficiencies and reduce employee risk during deliveries. The Contactless Delivery Task Force brings together manufacturers, supply chain partners and retailers to develop scalable, uniform standards for safely transporting and exchanging freight, with an initial focus on electronic bills of lading (eBOL).”
The following video provides a glimpse at the power of this type of collaborative effort.
For a more detailed look at findings and recommendations from the CBA’s U.S. Supply Chain Policy Priorities—A Case for a Federal Office of Supply Chain, you can visit the CBA website to download the full report.