A recap of President Biden’s latest supply chain announcement from November 2023. Discover how this plan will build US supply chain resilience.
What is the White House Council on Supply Chain Resilience (CSCR)?
In the face of complex global supply chains, global geopolitical turmoil, and extreme weather disruptions caused by climate change, building supply chain resilience is now more important than ever. The newly formed White House Council on Supply Chain Resilience (CSCR) is clear proof that resilience and security are top of mind not only for private organizations but also for our U.S. government.
The CSCR held its inaugural meeting on November 29, 2023. The goal of the CSCR is to support the enduring resilience of critical supply chains in America as part of a long-term, government-wide strategy to foster supply chain resilience. In the first meeting, President Biden announced 30 new actions to further strengthen American supply chains—the first of those actions being the creation of the CSRC.
Outside of the CSCR, the Administration outlined various other actions to help support lower costs for families, enable reliable deliveries, strengthen agriculture and food supply chains, and support jobs. In this blog, we will recap each new supply chain initiative.
Healthcare Supply Chains: The Defense Production Act Title III
To manufacture more essential medicines within U.S. borders and decrease the number of drug shortages, the Administration will broaden the Department of Health and Human Services (HHS) authorities under Title III of the Defense Production Act (DPA). The DPA Title III is a program that “…targets investments that create, maintain, protect, expand, or restore domestic industrial base capabilities…” according to the Assistant Secretary of Defense.
To get started, HHS has identified $35 million in investments for the production of generic sterile injectable (GSI) medicines, a staple of hospital care that frequently faces shortages due to quality problems during manufacturing. HSS will also select a new Supply Chain Resilience and Shortage Coordinator who will be responsible for addressing shortages in critical medical and food supply chains. Additionally, the Department of Defense (DOD) will soon release a report on the pharma supply chain highlighting high-risk areas to further reduce reliance on foreign suppliers.
The Department of Commerce’s New Supply Chain Center
With over a decade’s worth of supply chain data at Resilinc, we are big proponents of a data-driven approach to SCRM. That said, we were excited to hear about the announcement of the first-ever Supply Chain Center, which will fall under the Department of Commerce (DOC). This center will develop supply chain risk assessment tools and analyses to increase resilience by forming partnerships across government, industry, and academia. The center will also partner with the Department of Energy (DOE) to analyze clean energy supplies and with HHS to address foreign dependencies on critical drugs.
Using “FLOW” to Map and Monitor the Supply Chain
Launched in March 2022, The Department of Transportation’s (DOT) Freight Logistics Optimization Works (FLOW) program was created to develop a shared picture of supply chain networks. Participants are now utilizing FLOW data to inform logistics decision-making, which has helped make global freight networks more resilient through earlier supply chain disruption warnings. Now, DOT will start working with the USDA to help producers and sellers avoid disruptions that lead to increased food prices.
Developing a Plan for Smart Manufacturing
A new study by the National Academies of Science, Engineering, and Medicine will be created to develop a nationwide plan to improve smart manufacturing. Smart manufacturing is when new technologies are used in manufacturing to provide real-time data and improve supply chain resilience. This study will be sponsored by the DOE’s Office of Energy Efficiency and Renewable Energy (EERE) Advanced Materials and Manufacturing Technologies Office (AMMTO). This study will aim to support new digital and AI technologies to enhance manufacturing systems.
The Supply Chain Resilience Center and Multimodal Freight Office
The Department of Homeland Security (DHS) will launch a new Supply Chain Resilience Center (SCRC). This center aims to improve supply chain resilience by addressing risks and vulnerabilities at U.S. ports, and in 2024, it will conduct two tabletop exercises to test the resilience of cross-border supply chains. The Department of Transportation (DOT) is launching a new Multimodal Freight office, which will maintain and improve the nation’s freight network.
New Major Supply Chain Investments
Several major investments were highlighted at the inaugural meeting:
- The Department of Energy (DOE) announced $275 million in grant selections for its Advanced Energy Manufacturing and Recycling Grant Program. These investments will help revitalize communities affected by coal mine or coal power plant closures by investing in clean energy supply chains. This includes the production of batteries for electric vehicles.
- The DOE also announced up to $10 million in funding to accelerate critical material supply chains in the US and a $5.6 million prize to develop circular clean energy supply chains.
- The USDA plans to make investments worth $196 million toward strengthening domestic food supply chains.
- To guide the $714 million in DPA investments made in 2023, the DOD will publish the first National Defense Industrial Strategy (NDIS). This guide will lay out investments in defense-critical supply chains over the next three to five years.
New Supply Chain Technologies
Several new technologies and strategies were also highlighted in the announcement:
- There will be enhanced efforts to monitor El Niño’s impact on U.S. and global supply chains led by the White House National Security Council, the Office of Science and Technology Policy, and the Council of Economic Advisors in partnership with the National Oceanic and Atmospheric Administration.
- The DOE is developing an assessment tool for raw materials, manufacturing, workforce, and logistics considerations. To assess the potential for trade disruptions (particularly to semiconductors), the Department of Interiors’ U.S. Geological Survey (USGS) will map critical global supply chains.
- The DOD is also developing a Supply Chain Mapping Tool to analyze supplier data for 110 weapon systems to identify potential supply chain risks and develop mitigation strategies.
- The Department of Labor (DOL) will provide $8 million for two four-year projects to identify supply chain traceability methods and technologies to address child labor and forced labor risks in supply chains—particularly the cobalt and cotton sectors.
Looking Ahead to 2024
Next year, at the Supply Chain Data and Analytics Summit 2024, the Department of Commerce will bring together an array of public and private stakeholders to gather expert opinions on the new assessment models and tools. Also, in 2024, there will be a series of AI hackathons to develop new AI approaches to domestic critical mineral resources.
In addition to the planned supply chain resilience actions, the fact sheet highlighted the continued efforts to deepen ties with allies and partners—such as the EU, Japan and Korea, Mexico and Canada, Australia, and WHO—and strengthen global supply chains through partnerships like the Indo-Pacific Economic Framework (IPEF), Americas Partnership, North American Leaders’ Summit (NALS), and more.
As governments recognize the importance of supply chain resilience in reducing not only risks—but also costs—it’s time for businesses to invest. Learn more about the long-term value your business can derive from a mature and resilient supply chain risk management program. Learn how in Resilinc’s Best Practices Guide: Cashing in On Supply Chain Risk Mitigation.
