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How Commerce’s SCALE Tool Takes Another Step Toward Keeping Supply Chains a Priority in a New Congress
Two years ago, as the nation’s supply chains had been slowly righting themselves from the upheaval of the pandemic only to be beset by further disruptions from weather, geopolitical disruptions and more, I called on the government to prioritize greater visibility into the supply chain through legislation that would deploy tools to safeguard against what was then seemingly constant disruptions to the supply chain.
Fast forward to September 2024 to the Commerce Department’s inaugural Supply Chain Summit, where they announced the new SCALE data tool that will track supply chain performance and proactively assess risk. This step is part of the broader Supply Chain Center effort that Consumer Brands influenced and shepherded since the early days of the pandemic. We’ve consistently collaborated with Commerce to guide the development of tools like this, and moreover, the overall track reflects the path we’ve made efforts to get the government on to ensure visibility into the supply chain doesn’t fall out of focus, even when we aren’t seemingly in crisis mode.
Now, with the election firmly in the rear view and all of Washington focused on what to expect in a second Trump administration, the consumer packaged goods industry maintains that protecting and strengthening supply chain resiliency is critical to ensuring consumers’ uninterrupted access to affordable, everyday products. And while each administration may have different approaches and philosophies on global supply chains and trade, we hope to see continuation of work at Commerce that has percolated since COVID — building on lessons learned and putting those into practice. SCALE is latest step, but there is room for more to come in the form of legislation that will equip the current and future administration with the tools it needs to succeed.
In June, we submitted comments to Commerce urging the department to consider how the unique supply chain structures of the consumer packaged goods industry may necessitate varied policy approaches, underscoring that a one-size-fits-all path leaves tangible benefits on the table at best. At worst, it actively undermines efforts to maintain or expand the competitiveness of domestic food, beverage, household and personal care manufacturing.
This is critical to consider because our industry — which is America’s largest domestic manufacturing sector — operates in a fundamentally different manner than other industries, like clothes, cars or high-tech industries like for semiconductor or solar panel production. The uniqueness of the CPG industry is steeped in the fact that operations and jobs are scattered across the country, chiefly in agricultural or ag-adjacent areas. These operations rely on a litany of domestically produced inputs and ingredients, including packaging and agricultural commodities, as well as on long-standing ties to domestic farmers and workers.
At the same time, however, the industry requires certain ingredients and inputs from abroad that cannot be sourced domestically. For example, products like cocoa, coffee or spices do not and cannot be grown in the continental U.S. and must be sourced from other regions. Similarly, inputs for household and personal care products, from diaper parts to certain chemical compounds, may not have ready sources of domestic production.
Here’s where the SCALE tool comes in to close some of the gaps in navigating supply chain risks. According to Commerce, SCALE “utilizes a comprehensive set of indicators to assess structural supply chain risk across the U.S. economy,” and “will enable the U.S. Government to be more proactive and strategic in addressing supply chain risk.” It works by comparing “risks across industries and provides an in-depth assessment of what is driving those risks. SCALE will inform U.S. government decision-making and can facilitate data-driven conversations with industry on risks, opportunities, and actions that can advance supply chain resilience,” the department said in its press release.
We’re not done. This is a next step, but it remains important for Congress to keep supply chain flexibility top-of-mind — and the good news is that there is still time for Congress to pass comprehensive supply chain legislation. SCALE showed a commitment to formalizing and enhancing the work already underway to shore up our supply chains, and legislation would be another step in ensuring the critical oversight we need to keep them moving.
Published on November 25, 2024
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