In 2021, the COVID-19 pandemic exposed significant risks associated with our modern logistics and the sourcing practices of our domestic original equipment and consumer product manufacturers. Today’s supply chains are complex, global systems that are designed to access the lowest-cost, often offshore suppliers. The trade-off? These global supply chains are riskier than our domestic supply chains, as a single failure in the chain can disrupt the supply of critical materials. Furthermore, as we’ve seen, when an event disrupts supply, the ripple effect is widespread and costly.
Supply chains will continue to face challenges in 2022. However, we see positive signs for U.S. manufacturing and domestic supply chains. Below, are our top three.
U.S. government, industry, and trade associations are focused on rebuilding domestic supply chains
First, the Biden administration has pointed to the U.S. Commerce Department’s NIST Manufacturing Extension Partnership program (NIST MEP) as the go-to for large domestic manufacturers looking to find domestic suppliers. Not familiar with NIST MEP? This national network collaborates with small and medium U.S. manufacturers to strengthen their competitiveness.
With our longstanding relationship with NIST MEP, RTI Innovation Advisors’ works closely with the network of small and medium-sized enterprises (SMEs). We help the SMEs adopt new technologies, commercialize technology, and diversify into new markets. This advisory role gives us a unique understanding of and insight into SME challenges. Additionally, the role enables us to find domestic strategic, value-added suppliers for our manufacturing clients.
Second, key federal legislation to support rebuilding the domestic supply chain may become law in 2022. The Senate passed the United States Innovation and Competition Act (USICA) of 2021. USICA includes a quadrupling of funding to NIST MEP to strengthen the small and medium-sized U.S. manufacturing base. At the end of 2021, the House and Senate were negotiating a compromise bill. In October 2021, Rep. Carolyn Bourdeaux introduced the Supply CHAIN Act. This bipartisan bill would create an Office of Supply Chain Resiliency and Crisis Response within the Department of Commerce to monitor supply chains of critical goods and materials and plan for and respond to supply chain disruptions.
Third, industry associations are increasing their focus on supply chain resilience. For example, the Association of Manufacturing Technology and the Reshoring Initiative are helping their members understand the full value of domestic supply chains including
- price competitiveness,
- flexibility, and
- reduced complexity and related risk.
For manufacturers that want to understand the true cost of offshoring, the Reshoring Initiative has also developed the Total Cost of Ownership (TCO) Estimator which allows manufacturers to compare the relative value of domestic and offshore sources. Often, a domestic supplier that has a higher unit price has a lower or equivalent TCO when compared to foreign suppliers. This is particularly true for domestic firms with highly automated operations.
RTI Innovation Advisors helps manufacturers address challenges
With extensive networks that span industry sectors and a unique relationship with the NIST MEP, we help manufacturers
- find the right suppliers,
- make the best decisions for their organizations, and
- ensure long-term sustainability.
Are you struggling with supply chain resilience or sustainability? Do you want access to new markets? Are you concerned that your supply chain won’t recover from the next disruption?
Get in touch. We’d like to help you overcome challenges and grow.