The Unknown Aspects of Supply Chain

Written By:

John Kennedy, Ph.D.

Executive Director

Team Eagle Consulting

 

In my lifetime I have spent over 12-years in college, but luckily, my time did include multiple degrees. They range from Mechanical Engineering to Education to an MBA in Management to a Doctorate in Industrial Engineering. That last one was a key to my life and career because it tied Engineering & Manufacturing together with Supply Chain. It became my life’s purpose on many fronts.

I often joke that if you are struggling to sleep, then I will send you a copy of my dissertation – “US Production and Inventory Control juxtaposed in a Global Supply Chain’ – by page 6, lights out! While that is probably true, I am also very proud of the work, as the research did provide me with a foundation in inbound & outbound logistics that was unparalleled in my career.

Fast forward to 2020, and imagine my excitement when the term ‘Supply Chain’ became the overall focus to everyone’s life during Covid. While the reason was not a positive…the fact that we became aware of the importance that Supply Chains on every critical path was a plus. I was sure that this was the crisis that would change the game for us, and make our country step up its efforts in Manufacturing/STEM including Logistics.

I was wrong.

Oh, it’s true the term became a buzz word and is (still) trotted out repeatedly when it fits a certain narrative, but no one really wants to understand it. In fact, it’s better if we don’t, then we can manipulate it whenever someone can use it to gain an advantage in a conversation.

Why do I say this?

During my time at NJMEP (New Jersey Manufacturing Extension Program) I worked very hard to push a National Supply Chain Tool to be led by the (51) MEP Centers across the country. These entities are not government agencies, but each led the way in their respective States when it comes to Manufacturing by providing amazing support through services and advocacy. I did so, because there is no standard tool, and when taking on various crises – man-made or natural – any delay can be life threatening on many levels. The fact remains that it is impossible to determine what you need until you know you already have; and that includes a Supply Chain.

I was never so proud to be a key player in a group from the MEP National Network, the American Small Manufacturers Coalition, and a Bipartisan / Bicameral group of Federal Legislators that supported the creation and funding of that National Supply Chain Tool. One that can provide consistent and accurate access to critical data that makes all the difference – now and moving forward. This small group was able to convince everyone that this program needed to be included in the Chips Act. Our verbiage requested $131 million spent over 5-years with the MEP’s. In actuality, we received $20 million over two-years that is just not enough to build and sustain a tool that allows for each MEP Center to be on the same page when it comes to data. It is certainly not an easy task accruing and employed information from about 250,000 manufacturers nationwide.

Another crisis teaching us a lesson that we refuse to learn as we return to the status-quo.

Does it concern us that…

• That it took days of manual look-ups and multiple phone calls to locate suppliers for PPE and life-saving items like Respirators during Covid? The fact is that we did not even realize the extent of our capabilities in these areas…and still have no plan moving forward.
• That Steel & Aluminum Tariffs (agree or disagree they have been used by most every country for centuries, and they are not going away) taught us a Supply Chain lesson on what types of these metals we no longer manufacture in the USA? Not really…in fact we recently (almost) sold our largest Steel Producer to a foreign entity.
• That a reduction Oil and Natural Gas does not just impede our gasoline production, but that of the plastics resins that make up more and more of our build materials? Plant-Based is coming, but not ready to the extent needed.
• That the drilling and mining of Oil and Rare Earth Minerals are just one facet of the Supply Chain need in this sector? The considerable lack of refinery capacity restricts indiscriminately.
• That much of the actual drug manufacturing for acetaminophen and blood pressure medicine comes form outside the USA and mainly from China? Not a concern.
• That it gets more and more difficult to support our aging Military Assets with spare parts? Just Google B-52’s and their extended lifespan to 2050. That’s a service term of about 100 years.

What about another overused and undefined term…Reshoring. Now, I am certainly in support of bringing in new capabilities and products, but (again) if we are not aware of what is contained in our own Supply Chain…how can we know what to add? Providing foreign companies with tax and other financial benefits before those manufacturing firms that have remained here during all the turmoil is non-sensical.

And what of the Manufacturing Extension Partnership – National Network (MEP-NN)? Each Center strives to support companies in various STEM Support Services and Workforce Development support, and continues to produce an ROI in the range of 12:1, based on a series of core metrics that includes:

• Retained & Increased Sales – Over $500 billion
• Productivity Gains – Over $5 billion
• Capital Investments – Over $170 billion
• Retained & Added Jobs – Over 2.5 million

This level of performance is unheard of in regards to any Governmental Program, but (yet) MEP-NN has to fight every year to maintain ‘match’ funding. That figure currently stands at $175 million, and that is no small amount; until you consider that it equates to about $700 per manufacturer. Does that sound like Corporate Welfare to you?

That said – the program has been ‘zeroed-out’ or reduced or battled for small increases over its 3+ decades of great work. All the talk of increasing our Manufacturing Output from all the past Administrations, and the only program available to consistently assist our Manufacturer’s grow fights to survive.

When do we stop calling each other names, holding up signs, play games with budgets, and refuse to pay attention to the realities that actually do exist and are never solved?

And when do we realize that listening, learning, negotiating, and even arguing without personal intent will pave the way for positive movement that seems forever out of our grasp. If the USA wants to lead in this ever-advancing, high-tech world…then change is needed…now.