On February 24, 2021, President Biden signed Executive Order (E.O.) 14017, America’s Supply Chains.
E.O. 14017’s primary purpose is to’ “…strengthen the resilience of America’s supply chains”.
As written about here before and elsewhere, Covid-19 exposed the vulnerabilities of global supply chains. In the U.S., those weaknesses negatively affected U.S. national security and the economy.
Thus, the current administration is taking action to tackle these shortcomings post haste. Driven by national security and competitive advantage, E.O. 14017 calls for a 100-Day review to identify shortcomings in America’s supply chains. Moreover, the 100-day review will address supply chains of our allies and partners.
There’s more to E.O. 14017, as it goes beyond a mere review.
It’s goals are to achieve resilient, diverse, and secure supply chains. To accomplish that, E.O. 14017 calls for implementing recommendations followed up with annual updates. These updates will provide two pieces of information. First, they will provide the status of progress in implementing the recommendations. Essentially, annual updates will assess whether the recommendations are meeting their intended goals. Second, the annual reviews will assess how well these recommendations are performing.
With that basic understanding, let’s take a look at the key stakeholders charged with executing E.O. 14017.
Key Players Conducting the 100-Day Supply Chain Review
Identifying the key players of the review provides an idea of E.O. 14017 ‘s scope, complexity, and depth.
The co-leads for this review are the Assistant to the President for National Security Affairs (APNSA) and the Assistant to the President for Economic Policy (APEP). They will share responsibility in coordinating with all relevant executive branch agencies.
E.O. 14017 identifies these primary executive branch agencies and assigns specific review responsibilities:
- Department of Commerce
- Department of Energy
- Department of Defense
- Department of Health and Human Services (HHS)
These key leaders, in turn, will work with other relevant agencies to issue annual reports. These annual reports will consist of reviews called sectoral supply chain assessments.
Departmental Secretaries tasked to submit these sectoral supply chain reports include:
- Defense – will report on the status of the Manufacturing and Defense Industrial Base and Supply Chain Resiliency.
- HHS – will report on the preparedness of supply chains for public health and the biological industrial base.
- Commerce & Homeland Security – will report on the information and communications technology industrial base. This includes software development, data, and associated services.
- Energy – will report on all matters related to the energy sector industrial base.
- Transportation – will report on the preparedness of the transportation industrial base.
- Agriculture – will report on the preparedness of supply chains for commodities and food products.
These sectoral supply chain reports will address risks and recommendations. Again, as a point of interest, reports extend beyond U.S. domestic capabilities.
Note, E.O. 14017 also directs coordination with the Secretary of State. The purpose is to determine whether allies and partners have undertaken similar reviews.
E.O. 14017 takes a strategic view to supply chain management. It is not only a top-down review but also one that expands beyond U.S borders. It represents a holistic approach to identifying and remedying supply chain risks.
What Annual Sectoral Reports Include
Annual sectoral reports will address a variety of issues. They deal with information technology capabilities, climate, environmental, market, economic, geo-political, forced labor, risk and other contingencies.
They will also address R&D, supply chain gaps, redundancies, and single points of failure. And they will address alternative supply chains, workforce capabilities, financing, and stockpiling.
These sectoral reports leave no stone unturned.
Along with identifying risks, each department will establish priorities to inform their recommendations. To be sure, this is an ambitious bureaucratic undertaking. The scope and scale of this review will keep the bureaucracy earnestly occupied.
Given the executive order’s wide-ranging instructions and guidelines, 100 days seems aggressive. Regardless, the main point is the out-and-out recognition of supply chains’ strategic value.
In a post-Covid world, supply chains have captured the attention of U.S. and world leaders. China recognized this with its massive Road and Belt initiative. Similarly, the U.S. is taking concrete action now to bolster America’s supply chains.
Building a Resilient and Sustainable Supply Chain for Competitive Advantage
As you can see, the U.S. government now views supply chains as a strategic asset. That’s because supply chains affect the nation’s competitive advantage.
Weak supply chains falter in the face of damage, disruption, and dislocation. The lack of supply chain resilience can have dire consequences. The lack of resilience can undermine national security and impair the economy.
In contrast, robust and resilient supply chains can give the U.S. a competitive advantage. At the end of the day, to survive and thrive, you need a resilient and sustainable supply chain.
Now is a good time to take note of E.O. 14017’s underlying concern.
Do you have a robust and resilient supply chain? Is your supply chain a source of competitive
As a leading edge 3PL, American Global Logistics can assist you in building a robust and resilient supply chain.
We have experience in partnering with clients to build sustainable supply chains.
Contact American Global Logistics today to learn more.