The tool is set to help the U.S. government identify and address potential challenges.
The United States Department of Commerce’s Supply Chain Center has launched a new tool – SCALE – to monitor and address risks to supply chains. The tool was unveiled at the inaugural Supply Chain Summit this week, hosted by the Department in collaboration with the Council on Foreign Relations (CFR).
According to the Department of Commerce, SCALE utilizes a set of indicators to determine and evaluate structural risks to the overall U.S. economy across supply chains. Together with input from the Industry & Analysis unit within the International Trade Administration, the tool will support the U.S. government in addressing challenges to and problems within supply chains, the Department clarified. The goal is to paint a picture of the whole U.S. economy to see where it is vulnerable and how to fix it. However, the accompanying fact sheet did not reveal detailed information on what indicators or data the tool uses besides comparing risks across industries and possible reasons for them. The Industry & Analysis unit is set to launch a competition on developing new data and analytics that could support and expand the indicators SCALE uses.
Over Half of U.S. Companies Require Half a Year to Return to Normal Capacity in Case of One Week of Transport Disruption
In an interview with the Financial Times (Paywall), Gina Raimondo, Secretary of Commerce, highlighted that data would indicate 57 percent of industries in America require half a year to return to normal capacity should there be just one week of transport disruption. She added that “plenty” of risks are yet to be understood and addressed.
Critical minerals are one of the most striking supply chain risks to the U.S. economy. Many are used in high-tech fields such as data centers, electric vehicles, or electronics. However, in many cases, the U.S. depends heavily on imports, especially from China, for example, in the case of rare earths or gallium and germanium. While voices in the U.S. are growing louder to decouple from the People’s Republic, Secretary of the Treasury Janet Yellen had said earlier this year that the U.S. would not seek to decouple but to diversify. Consultancies Roland Berger and PwC have also identified raw material supply chains as potential hurdles towards global energy transition efforts and economic prosperity.
Photo: P_Wei