An open letter to the Supply Chain Caucus of the U.S. House of Representatives

Unfortunately, the only co-chair who provides his email address is Rep. Allred. It is [email protected]. You can go to the websites of the other three Members of Congress and send them an email by filling out a form.

Summary: In light of the undeniable and negative impact that the Novel Coronavirus and COVID-19 have had on supply chains all over the world, the authors call on leaders and professionals in supply chain, innovation, and technology, whether based in the United States or abroad, to unite in helping the recently formed Supply Chain Caucus of the U.S. House of Representatives as well as leaders in other countries set an agenda for supply chain, innovation and technology that is built to withstand the challenges the world will contend with in the future. 

We need help from everyone who reads this. The Supply Chain Caucus needs our help and encouragement to get moving quickly to engage with the many difficult issues at hand.

1. Make a commitment today to help the Supply Chain Caucus of the U.S. House of Representatives, and government and civic leaders who are committed to advancing supply chain, innovation and technology wherever you live by adding your name alongside other supply chain professionals, academics, investors, entrepreneurs, business executives and innovators here.
2. Share this open letter with at least five people in your professional and social networks with the tags #SupplyChain, #Innovation, #Technology, #TheWorldIsASupplyChain, and #SupplyChainMassive. 
3. If you are the CEO or Founder of a company, please encourage your employees to sign this letter. The more people who sign-on, the more the members of the Supply Chain Caucus will understand the extent of their responsibility. If you do not work in supply chain, please send it to your friends who do and encourage them to sign.

As the world comes to grips with the novel coronavirus and COVID-19, it is becoming painfully clear that critical supply chains, both in the United States and abroad, are not prepared for some of the challenges that our world must be prepared to confront now, and in the future. 

Dear Co-Chairs of the Supply Chain Caucus of the U.S. House of Representatives:

We are encouraged that the U.S. House of Representatives has created a Supply Chain Caucus. We are writing this letter to emphasize that your caucus is by far the most important caucus within the House of Representatives. As people who work in various professional capacities within the supply chain, we feel it is our responsibility to help ensure that you succeed in fulfilling your stated mission. We are writing this letter to offer some suggestions on some of the issues the Supply Chain Caucus must address.

Background

Before we delve into specific suggestions, we offer these observations:

First: All human activity is driven by supply chains. Supply chains may be natural or man-made. Natural and man-made supply chains interact with one another in ways that we cannot always predict or control. Escalating concerns about climate change reflect the effect that man-made  supply chains are having on the natural environment and natural supply chains. 

Second: Events like the novel coronavirus, and other natural or man-made disruptions to global supply chains, are likely to become more common in the future as the world’s population continues to grow, straining resources and the natural environment. Such events will call for more coordinated, large-scale, and global responses. The success of such responses will depend on international cooperation between governments, and between private sector and public sector organizations.

Third: Given projections about population growth, supply chains around the world are going to face increasingly more difficult and challenging problems. We can’t afford supply chain resiliency as an afterthought. Supply chain resiliency must be an upfront concern that is built into design processes from the beginning.

Fourth: Supply chains are formed from a complex and interconnected network of social, environmental and economic systems. If any one of these subsystems suffers a catastrophic failure, the entire system fails. Moreover, it is  generally impossible to predict when a catastrophic failure might occur, or in which subsystem such a failure is most likely to occur.

Finally: It may seem alluring to adopt a hyper-protectionist approach towards trade with the rest of the world. Given the realities of the world today, we urge you to question if that is indeed the best long-term approach if the United States’ goal is to build sustainable and resilient global and domestic supply chains?

Developing an agenda for supply chain, innovation and technology

Given this reality, what should the Supply Chain Caucus be working on? Here are some suggestions to get you thinking about what your agenda might look like in the near future.

Policy: What new policies should the United States consider in order to strengthen the ways in which supply chains function, in the United States and around the world? For example:

• The U.S. trucking industry has experienced a very difficult year in 2019. What policy tools exist, or need to be created, to strengthen the U.S. trucking industry in an environment that promises more extreme weather events, and more episodes like the novel coronavirus? 
• The global maritime industry is confronting a number of difficult problems. Given how fundamental shipping is to global trade and well-being, what policy tools can your caucus implement to ensure that U.S. companies, innovators and entrepreneurs play a leading role in solving the industry’s problems?
• The world is making a slow transition from linear supply chains to circular supply chains as we recognize that man-made supply chains are having a negative impact on the environment. What is the government’s role as the United States and the world makes this transition?

These issues, and others we don’t have enough room to mention, will require the Supply Chain Caucus to move past partisan divides in order to examine and push for policies that will strengthen the U.S. economy by making it more resilient to exogenous and endogenous shocks, whether global or domestic, while protecting the characteristics that have made the U.S. economy the envy of most of the world. 

Innovation: Domestically, what can the government do in partnership with the private sector to encourage the commercialization of innovations that promise to refashion supply chains for the realities of the world that we live in now, and the world that we will live in tomorrow? 

For example, some of these innovations are currently languishing within university research labs that have been funded through federal and state grants, but that subsequently face difficulty in becoming commercial products. One goal of the Supply Chain Caucus should be to make it easier for private capital to find and fund such innovations through a streamlined process that rewards the financial risk-taking that will be required to bring such products to market.

Technology: Between 2020 and 2050 we are going to see an increase in cyber physical systems – where software technology is applied and integrated into the physical world around us. This is an ongoing trend that will continue to accelerate as time goes on. Many of the startups creating such innovations will be tied into supply chains in one way or another. Some of these technologies will be completely new inventions that did not exist in the past, and they will introduce new ways of doing business that will require working with policy makers to ensure that laws and regulations do not unnecessarily slow down their development and progress. 

Your caucus must play a leading role in ensuring that such innovations come to market quickly, but at the same time your caucus must empower government agencies and regulators to protect the public from any possible harmful effects such technology might have on society, and punish bad actors who attempt to exploit such innovations for their own ulterior purposes.

Finance: Financial markets exist to aid the production of goods and services through the facilitation of risk transfer between market participants – producers, investors and speculators among others. As global supply chains are refashioned to confront the challenges the world is encountering this century, it is not clear that the way public and private financial markets have functioned historically is fully aligned with the new realities of the world that we are encountering today. It is worth examining if there is a role that federal regulators and other policy makers can play to encourage innovation in financial markets to strengthen the transition from the supply chains of the past to the supply chains of the future.

Society: Supply chains are human systems too. How should society in the United States be organized to ensure that widespread supply chain disruptions capable of causing social upheaval and unrest are kept to a minimum? What does this mean from the perspective of a national industrial policy for the United States? Supply chains exist in and are essential to every industry. What does this suggest from a national security perspective in terms of which supply chains should be localized versus which supply chains can remain fully globalized?

What will supply chains look like in the future?

The phrase “supply chains of the future” can seem nebulous and vague. It is not. Here are three characteristics of supply chains that we know will become increasingly important as the future unfolds: 

• First, the supply chains of the future must be sustainable, in the sense that they meet the needs of today without sacrificing the needs of the future. 
• Second, the supply chains of the future must be designed with a systems perspective in mind such that they simultanoeusly satisfy the needs of existing social, environmental and economic systems. 
• Third, in order to optimize for resilience, the supply chains of the future must strike a balance between centralization and decentralization.

In the letter you sent your congressional colleagues soon after the caucus was established, you stated that your caucus seeks to “strengthen and add resiliency to protect the delivery system, which can be severely harmed by geopolitical events such as the recent coronavirus outbreak that has had significant impacts on global supply chains.”

Supply chains are production systems too. 

Efficient and well-functioning supply chains are critical to the way the world works, in developed as well as developing countries. 

We are all rooting for your success. The world we have become accustomed to depends on it. Many lives depend on it.

We pledge to offer you our knowledge and expertise if and when you feel it would help you accomplish the goals of the Supply Chain Caucus.

Thank you,

Brian Laung Aoaeh, CFA – Co-Founder and General Partner of REFASHIOND Ventures, Co-Founder and Co-Organizer of The Worldwide Supply Chain Federation and The New York Supply Chain Meetup

Craig Fuller – Founder and CEO of FreightWaves

Lisa Morales-Hellebo – Co-Founder and General Partner of REFASHIOND Ventures, Co-Founder and Co-Organizer of The Worldwide Supply Chain Federation and The New York Supply Chain Meetup

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