These days, it seems like there are more divisions than commonalities among people. But the supply chain crisis that has plagued this country over the past two years has been an equalizer to some extent. People living in rural communities, suburbs and major metropolitan areas all have had to confront the stark reality of the nation’s fragile supply chains. Everything from construction materials to appliances to baby formula to prescription medication have experienced severe disruptions, with a new shortage seemingly emerging every few days. This supply chain crisis is more than just an inconvenience; it has had real consequences for millions of Americans’ lives. Moreover, it has provided a worrying reminder that supply chain vulnerability poses a serious threat to U.S. national security and prosperity.
The U.S. government has a central role to play in combating the supply chain vulnerabilities that threaten the nation. But given the complexity and scale of the challenge, doing so effectively is no easy task. As the ongoing crisis has demonstrated, current supply chain risk management practices often leave the U.S. government scrambling to deal with the costly impacts of supply chain vulnerabilities after the fact. If the U.S. government is going to combat risk more effectively in supply chains, it must move from reactive remediation to proactive prevention. Critically, making this transition requires investment in training for the U.S. government’s supply chain risk management workforce so they are sufficiently prepared and equipped to confront this new challenge.
Limitations of Current Supply Chain Risk Management Practices
The risks facing the nation’s supply chains are complex and growing. An over emphasis on efficiency and just in time production methods in recent decades has created supply chains that lack excess capacity, that are overly reliant on foreign sources for critical materials and components and that are rife with bottlenecks and single points of failure. As a result, the nation’s supply chains are brittle and vulnerable.
Current U.S. government supply chain risk management practices, however, are insufficient to cope with an increasingly challenging risk environment. There are three principal factors driving this insufficiency. First, supply chain risk management is largely a pick-up game, with the mission assigned as an ancillary concern or secondary duty. Second, whether it be foreign influence, obsolescence or other vulnerabilities, those tasked with supply chain risk management tend to have differing but myopic definitions of what constitutes supply chain risk, as well as differing views on how to implement evolving statutory and policy guidance into their practices.
Third, current supply chain risk methods rely on manually intensive processes, siloed data and aging (or already outdated) technology. Due to these factors, supply chain risk management is often consumed by inefficient and inadequate efforts to identify and contextualize risk, forcing the U.S. government into a reactive posture that can only attempt to remediate the costly and disruptive impacts of supply chain vulnerabilities after it’s too late.
Training Can Enhance U.S. Government Supply Chain Risk Management Efforts
If the U.S. government is to move from reaction to proactive risk mitigation and prevention, it must transform its supply chain risk management practices. Professionalizing the supply chain risk management workforce through standardized training can play a vital role in catalyzing that transformation. To maximize the impact, any supply chain risk management training program should, at minimum, include these three critical elements.
Holistic View of Risk: Supply chain risk is multifaceted and interconnected. But an environment where there are multiple, narrow views of the problem can lead to gaps that allow risk to slip through undetected. The supply chain risk management workforce needs a holistic view of supply chain risk that spans across companies, capabilities and capital. This holistic view of risk can help standardize understanding, close gaps and enable comprehensive risk management across entire industries and product lifecycles.
Incorporation of Data at Scale and AI Driven Applications: Like the rest of the world, supply chain risk management is awash with data, making it difficult to isolate the risk signal from the noise. Current manual processes and analog tools, however, are not up to the task. As a result, surveillance and investigation efforts can be all consuming for the workforce, limiting time and resources available for remediation or mitigation. Artificial intelligence (AI)-driven applications that fuse and process data at scale, however, can provide highly automated and more accurate risk surveillance and identification. This automation can free up time and resources, allowing the workforce to focus its attention on the critical tasks of contextualizing and mitigating risk.
Standard Framework for Developing Risk Mitigation Strategies: Identifying risk is only part of the battle. Once identified, risk must be continually mitigated at scale to build a stable and resilient industrial base and prevent costly future disruptions. Developing and applying mitigation strategies, however, is a complex endeavor. A standard framework for developing risk mitigation strategies can be a critical enabler for the workforce. Informed by the collective experience and best practices of the enterprise, this framework can provide a common approach for implementing new statutory or policy guidance, a common methodology for assessing risk, and a common playbook of proven mitigation measures. This framework can serve to improve the timeliness, effectiveness and consistency of risk mitigation efforts.
Supply chain risk is a pernicious and growing threat to the U.S. national security and prosperity, as well as the well-being of the people. If the U.S. government is going to effectively combat it, the nation needs a professional supply chain risk management workforce that is trained and equipped with the most modern practices and tools in the arsenal.