Biden’s Supply Chain Plan Hinges on Continued Agency, Bipartisan Support

President Joe Biden unveiled earlier this week more than 30 new actions aimed at adding resiliency to America’s supply chains at the inaugural convening of the newly formed White House Council on Supply Chain Resilience.

The council was established to strengthen what the administration considers the country’s most critical supply chains. Notably, these industries are those most closely related to national security, including medicine for infectious diseases, rare materials, energy, and advanced technology.

“Usually, in a free market capitalistic philosophy the U.S. government had to stay away from setting a policy favoring a specific industry or company,” said  Joseph Sarkis, professor of management in the Business School at Worcester Polytechnic Institute. “In this case, they made a deliberate effort to focus on specific industries, either waning or critical.”

This latest announcement places a continued focus on the administration’s support of supply chain resilience, including an Executive Order on America’s Supply Chains, establishing the Supply Chain Disruptions Task Force, and expansions of production capacity and building infrastructure in key sectors through the CHIPS and Science Act, the Inflation Reduction Act, and the Bipartisan Infrastructure Law.

“There are some bipartisan initiatives, but it is not clear what is and what isn’t bipartisan. If the president and the agencies don’t get buy-in from both houses, it is just words with baby teeth.”

“Supply chain stress has eased measurably over the past year, and the Biden administration’s announcement is another step in the right direction,” said Jesse Rogers, economist at Moody’s. “While unlikely to resolve some of the more complex issues plaguing supply chains in one go, measures targeting pharmaceuticals, climate infrastructure, data security, and logistics will bolster resilience and get the ball rolling on smart infrastructure and global cooperation.”

Sarkis added that although many of these activities have been ongoing since the early stages of the Biden administration, it is confirming their follow-through. “Having multiple departments and agencies involved makes it a stronger and broader initiative than if one agency is leading it.”

Resiliency depends on execution and consistency

Biden announced several areas of focus, including the development of risk assessment tools for cross-governmental supply chain data-sharing. Other initiatives of note include:

• A plan to manufacture more essential medicines in America to mitigate drug shortages.
• $275 million in grants for the Advanced Energy Manufacturing and Recycling Grant Program
• $196 million in investments toward the domestic food supply chain
• Launch of the quadrennial supply chain review 

These practices and tools are intended for government agency use, but they also offer a promising catalyst for more widespread change and innovation in the private sector.

“The diffusion of practices and technologies and potential tools for risk management and resilience may go out to large private firms and their supply chains, especially ones that have government contracts,” said Sarkis. “Whether standards will occur may cause greater diffusion, but I would not consider this to be an overnight thing. It will be 5-10 years.”

Sarkis added that while these proposed actions are a promising step toward improved supply chain resilience and sustainability, real impact will require ongoing support by future administrations.  

“The impact can be great if the plans are executed rather than talked about, if there is diffusion of technology, best practices and standards to commercial supply chains, and there is a consistency in strategy through multiple administrations,” said Sarkis. “Otherwise, with many short-term and focused initiatives, the dynamic political waves of change will wash away these supply chain plans.”

Sarkis also pointed to concerns that relatively little financial support has been dedicated to these initiatives, indicating that further support is still needed to turn words into resources and action.

“There are some bipartisan initiatives, but it is not clear what is and what isn’t bipartisan,” he said. “If the president and the agencies don’t get buy-in from both houses, it is just words with baby teeth.”