If there is one lesson the pandemic taught strategists, it is that global supply chains are easily disrupted and profoundly impact developed countries’ functionality. Currently, global superpowers are in a race to develop increasingly complex technology, such as AI and quantum computing – technology that will significantly broaden the reach of both military and economic power. Key to the success of this power advancement is access to precious materials essential for breakthrough computing power, intelligence, and force capability.
It is within this geopolitical power battle playing out across the world that the U.S. State Department (State) and the Department of Homeland Security (DHS) communities have become even more crucial to ensure global success in securing this access. Paramount to this success is sound supply chain management and private-sector cooperation.
Department of State: A Key Role Spanning the Globe
State is at the epicenter of this pinnacle juncture in U.S. strategic growth. In 2021, State along with the Department of Commerce and the U.S. Trade Representative were assigned key roles in advancing Executive Order 14017, “America’s Supply Chains.” Given the new global power dynamic catalyzed by China’s assertive activities across the global stage and Russia’s invasion of Ukraine, State’s diplomacy and foreign policy and foreign relations role has become increasingly important as the Biden administration has acted upon a policy of “friend-shoring.” Specifically, friend-shoring supports and redistributes critical supply lines to trusted and geographically advantageous partners. This serves to, among other things, solidify and expand a broad network of trusted allies to lower the risk of supply chain disruption.
As a result of successful friend-shoring, the U.S. can expect to see a more resilient operating base, with faster access to critical goods and services and a decreased dependence on global competitors, often at lower costs, too. The strategic risks of not acting are great as global competitors have taken significant steps to reduce U.S. influence and strategic positioning. For example, China’s success in partnering with countries in the developing world to physically establish telecommunications infrastructure enables significant influence over information flows and technological modernization in these countries. This infrastructure increases the difficulty in establishing future U.S. supply chain relationships due to the potential risk that China will, amongst other factors, attempt to steal sensitive U.S. information and technological outflows or otherwise negatively try to affect U.S. relationships, commerce, innovation, and production, such as related to advanced semiconductors.
Department of Homeland Security: A Key Role at Home
For its part, DHS must meet the challenge of rising levels of trade and travel while concurrently ensuring that those imports and people do not threaten the economic and physical security of the country. Bad actors capitalize on supply chain vulnerabilities to smuggle harmful substances, goods, and people into a country. They seek to exploit our vulnerabilities – routes, financial or other dependencies, and people – and utilize myriad sophisticated and unsophisticated means. For instance, new supply lines for technological advancement can be used to infuse counterfeit parts – components that have the potential to cause weaknesses in critical infrastructure through cyber intrusion or degraded asset capability. Changes to the supply chain ecosystem create additional vulnerabilities that terrorists will attempt to exploit, such as targeting of overwhelmed ports due to increased trade. This is a potential peril that DHS and other stakeholders have been addressing for decades at critical ports such as Los Angeles and Long Beach.
What to Do Given These Seemingly Ubiquitous Risks
While the risks in these situations sound overwhelming, principles that govern risk management and the execution of strong global supply chain activities establish the parameters for successfully accomplishing the State and DHS missions. Just as innovation and greater technological power have created enormous new opportunities for global growth, it also created a “structure” or system of amplified and new principles, best practices, technology, tools, data-driven planning, subject-matter expertise, and processes that, when combined, result in faster, smarter, and more secure supply chains. For example, integrated principles around Supply Chain Risk Management have broadened the aperture of manufacturing and distribution networks, significantly increasing information flow and analysis capabilities. Technology-enabled risk analysis and assessment methodologies can be applied to predict and understand where vulnerabilities in the supply chain may exist for short-term decisions, continuous monitoring, and future positioning.
Data-driven scenario planning capabilities have become a critical practice to enable risk-mitigated options for decision-making. It is no longer a matter of just having a decision to move forward, but rather which decision is best, based on the most likely scenarios that will occur in an uncertain environment. Such scenarios are not simply focused on traditional supply chain logistics but incorporate a dynamic set of factors, such as political, environmental, financial, and security factors. This comprehensive approach increases understanding and confidence in a trusted supply chain network and thus reduces risk. Based upon effectively addressing the uncertainty that the recent pandemic brought on the global supply chain, the commercial sector invested significantly in Supply Chain Risk Management capabilities. The public sector has made progress to do the same, though challenges remain.
What’s Next: Looking Ahead
The world power dynamic is changing rapidly, and the global supply chain has become a battleground for today’s superpowers. State and DHS have unique roles to enable successful tactical gains and strategic positioning. For the short term, agencies must continue the hardening process of existent public-sector supply chains. In the long term, standardized and integrated data will facilitate more sophisticated analyses and timely decision-making. Given that bad actors will try to capitalize upon new relationships and vulnerabilities, infrastructure, technology, data, and processes will need to be continually updated to maximize the availability of commercial supply chain advancements. Lastly, the private sector has a key role in making such advancements possible by reducing barriers to data access and reliability. Through such partnerships, advancements, and application of supply chain principles, the U.S. has a tremendous opportunity to achieve national goals and keep adversaries at bay.