We Need More Resilient Supply Chains

Rather than quoting passages from Steve Clemons’s post at The Hill on the complexity of returning things to being “Made in America”. I’ll just suggest that you take a look at it and make a couple of more points.

My first point is that, although I do believe that we need an economy that does more primary and secondary production rather than relying as heavily as we do on tertiary production, I am less interested in “Made in America” than I am in having more resilient supply chains. In part that will necessarily mean more primary and secondary production in the U. S. but it will also mean not being completely dependent on any single country for strategic necessities, particularly China.

My second point, riffing off Mr. Clemons’s networking analogy is that the present problem with our supply chains for nearly everything from electronics to food and pharmaceuticals is that they aren’t enough like the Internet. I won’t dwell on the mechanics of it too much but the original purpose of the protocols that became the Internet was to provide resilient networking in the case of nuclear war and part of that technology is the ability to route around inoperative segments of the network. In theory a good supply chain will implement that sort of resilience but they rarely do. There are many reasons for that but one of them is that it can be darned hard to determine whether overseas second sources are actually second sources at all.

It doesn’t really matter whether 100% of the active ingredients in 10% of your pharmaceuticals or 10% of the active ingredients are only made in China. As long as it’s not 0% you still have a vulnerable supply chain.

If your calculations of efficiency don’t take that into account, you’re not calculating actual efficiency but speculating. Our problem is that CEOs are rewarded for just that kind of reckless behavior and rarely punished when their gambles don’t pay off.