Supply Chain Executive Order

On February 24 President Biden signed an Executive Order aimed at encouraging Supply Chain Resilience. There are two parts, first, a 100-day Supply Chain Review focused on semiconductors, batteries, rare earths, active pharmaceutical ingredients, and closely related flows. Then, second, a set of six Sectoral Supply Chain Assessments: defense Industrial Base, public health and biological preparedness, information and communications technology, energy, transportation, and agriculture/food. These six assessments are to be completed by next February.

As with any significant Executive Order there are several motivations playing out and a variety of purposes being pursued. There has been plenty of insightful commentary. There have already been several efforts to influence how the EO will be implemented. There will be more.

Indirectly, the Executive Order calls-out several conundrums that challenge effective policy-making related to supply chains.

Four urgent vulnerabilities are plucked from six very full baskets of strategic risk. These four have been recognized (by some) as urgent for a few years. The 100-day window suggests some solution paths have been conceived. The tasks between now and Memorial Day are to confirm or deny (and refine) what has been conceived. If confirmed, this window in time will also be used to gin-up support for moving forward.

The one year schedule for the six assessments is, almost certainly, an initial down-payment that, if successful, will start a multi-year process of sustained strategic engagement in crafting meaningful Supply Chain Resilience. In Washington DC a one-year schedule for anything is generous. But tension persists between the real need (practically and politically) to do-something-soon and the temporal components to do-something-substantive.

The Executive Order gives diversity and security equal — uneasy — equivalence in its recipe for resilience. Diversity innately resists being secured. Security and resilience are often in tension precisely because systemic diversification and independent self-organization makes securing much tougher. Too much security results in rigidity instead of resilience.

Authentic sources of dissonance between national security and economic vitality are another uneasy (and inescapable) relationship baked into the Executive Order. The national security shop and the economic policy shop are given co-ownership of the whole Supply Chain Resilience process. Similar dual touch-points persist across the effort, for example when the Department of Homeland Security and the Department of Commerce are given joint custody of the Information and Communication Technology (ICT) industrial base.

Does anyone know if President Biden is a fan of Arnold Schoenberg? Or maybe Stravinsky? Some say dissonance is as All-American as Gershwin and jazz. Whatever the sound-track, this Executive Order explicitly embraces persistent tensions involving time, turf, technique, targets, interdependencies, freedom, risk, and how the real world works, especially at global scale. The Executive Order leans into these tensions, but it is not yet clear how — if — they will be resolved. Schoenberg’s stubborn non-resolutions are very different from Miles Davis.

Over the next year each of the big six or seven players will have the chance to strut their stuff. I expect a policy line-up that ranges from Sousa marches to the coolest jazz. Then the EO outlines how, “as soon as practicable following the submission of the reports required,” the national security and economic policy shops will provide to the President recommendations to “strengthen the resilience of America’s supply chains.”

I’m guessing that the President’s senior folks are guessing — even depending upon — that six honest assessments will (despite dramatic differences) unveil a Venn diagram where — miracle of miracles — all the essential “industrial base” supply chains share about 80 percent of the same problems (and opportunities?) that can be strategically addressed as a network-of-networks. I’m guessing they are correct. For this fusion to be practically reflected in policy and strategy, I am betting on — hoping for — something more jazz-like than march-like.

Late in his career Miles Davis put aside raw improvisation. But even his most composed performances preserve tensions purposefully deployed as creative strength. Herbie Hancock remembers, “What I realize now is that Miles didn’t hear it as a mistake. He heard it as something that happened. As an event. And so that was part of the reality of what was happening at that moment. And he dealt with it…. Since he didn’t hear it as a mistake, he thought it was his responsibility to find something that fit.”

Great attitude — the only realistic attitude — for engaging the dynamic realities of contemporary demand and supply networks. In Kind of Blue and much more, the great jazz trumpeter resolves tension by embracing dissonance. Not easy to do, but possible.