By Karl Buschmann and Fabian Villalobos
Under the Biden administration, progress has been made on strengthening the resilience of supply chains, but other gains are being left on the table. One reason why: The public and private sectors do not use a common vocabulary, leading to incomplete or misaligned incentives, priorities, and perspectives.
The Biden administration started sounding the alarm about America’s supply chains just weeks after taking office in 2021 with an Executive Order, followed by the launch of the Council on Supply Chain Resilience in 2023 and additional instructions in 2024. While progress has been made on strengthening the resilience of supply chains, other gains are being left on the table. One reason why: The public and private sectors do not use a common vocabulary, leading to incomplete or misaligned incentives, priorities, and perspectives. It’s time for a common vocabulary and vision. Fortunately, the inaugural Quadrennial Supply Chain Review of December 2024 lays the groundwork for an “enduring vision” for the incoming administration and for a truly common vocabulary and vision.
Let’s define terms. In its simplest form, resilience is the ability to bounce back from large-scale disruption, according to supply chain expert and MIT professor Yossi Sheffi. On that much, the private sector and government agree.
However, a disconnect occurs when it comes to the term “supply chain.” In private industry, the supply chain is about logistics, transportation, distribution, and warehousing. However, in government circles, the phrase is used to indicate what industry would refer to as a “value chain (PDF)”— the multiple steps and companies that develop and assemble products. As a result, policy conversations about reshoring, derisking, and diversification focus on firm ownership, trade policy, and the role of the government in the economy. Fortunately, transportation and logistics, which are central elements to resilience in global trade, have been addressed in the “Quadrennial Supply Chain Review.”
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“In private industry, the supply chain is about logistics, transportation, distribution, and warehousing…in government circles, the phrase is used to indicate…the multiple steps and companies that develop and assemble products.”
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It’s easy to see why this disconnect exists. Government works at the macro level, setting broad policy objectives. It uses the language of law, regulation, and compliance—all calibrated to the political economy. That framing trickles down to policy scholars, like academics and think tankers, who often have limited private sector experience, especially in supply chains.
Moreover, as William Alan Reinsch of the Center for Strategic and international Studies points out, senior governmental officials have incorrectly used the terms “friendshoring” and “onshoring.” That only muddles policymaking in the public sector and confuses the private sector.