America’s supply chains play a crucial role in America’s well-being. This was never more evident than in 2020, when the COVID-19 pandemic caused massive shortages of goods and services. The resulting domino effect hindered U.S. business and manufacturing facilities that were waiting for shipments of components in order to do their own production.
The Biden administration has echoed the importance of America’s supply chains by issuing an executive order in February 2021, pledging to strengthen supply chain resilience and ensure federal agencies become better equipped to withstand future supply chain challenges.
Our federal agencies gain a rare opportunity to re-evaluate their supply chain strategy and their suppliers and determine whether some changes are in order.
Evaluate tools currently in use
As a first step, agencies should evaluate the supply chain solutions they use and identify limitations for each. Note that while many limitations stem from the tools’ capabilities, others might be created by mandates and regulations with which federal agencies must comply.
To kick off the evaluation, agencies should thoroughly test the available tools for all scenarios the customer is likely to encounter. Simulate real-world scenarios for accurate assessments, while also considering the differences between agencies’ parameters. For example, civilian agencies and the military each must track and manage existing vehicle and equipment inventories. However, a military solution must adapt to atypical markets, terrain and regulations.
User feedback provides an important data source for these evaluations, as do current test results. Existing analyses, such as prior test results, might prove helpful—especially in long-term use cases—but cannot substitute for testing the solution against current needs.
Share gaps and strengths of existing tools with prospective suppliers
Once agencies have identified supply chain limitations and gaps in existing solutions and tools, they should look to engage prospective suppliers and begin a solution discovery process. This may be accomplished through upgrades but may also require migration to new solutions. The evaluation criteria will differ slightly by industry, but every agency should use these six key evaluation points as the core data set:
- Production capacity and schedule – Agencies should ensure that suppliers can produce the needed amount in the necessary time frame. This includes understanding how suppliers are prepared to handle a crisis that causes supply shock.
- Quality of solution – Agencies should look to suppliers that meet industry quality standards, as it can be difficult to measure quality before using a product or service. In the commercial and civilian space, agencies should require suppliers to provide ISO BS/EN ISO 9001:2000 certification. The DOD has its own specifications, referred to as MIL-SPEC, that describe essential technical requirements that all military materiel must meet.
- Past performance –Performance issues affect a federal agency’s ability to deliver goods and services to the public. The Contractor Performance Assessment Reports System (CPARS) serves as a tool that agencies can use to objectively review a supplier’s past performance.
- Risk Management – Although risk plays an inherent part in any business, suppliers should establish measures in place to limit the supply chain’s exposure n to risk. This includes considerations for cybersecurity threats, a detailed method of tracking raw materials from origin to application, and already established processes to mitigate risks and recover when exposed to risk. A supplier that considers risk exposure and security, from the earliest stages of the supply chain through delivery and maintenance of the solution, will help agencies avoid some risk exposure.
- Sustainability – Sustainability plays an important part in the supply chain, for ethical and financial reasons. The American public increasingly supports sustainable practices that promote humane working conditions and limit damages from manufacturing. Separate from that, building a sustainable supply chain helps to control costs and decrease expenses over the long term.
- Considerations for future changes and technology – Agencies depend on suppliers to build a supply chain that can withstand unexpected changes in technology and adopt future technology. Agencies should seek innovative suppliers that are incorporating newer technologies like blockchain, artificial intelligence and machine learning. They are typically better equipped to help agencies prepare for future technology shifts.
Evaluating suppliers on these six points and comparing them to one another will allow agencies to narrow down the pool of suppliers to those best able to support their mission and provide a reliable, resilient and adaptable supply of goods and services.
Design new solutions and iterate through testing
With a smaller, reliable group of suppliers identified and an existing solution that has been thoroughly tested to find gaps, agencies can switch focus to designing and building a new solution. Just as with testing the initial solution, this process should be iterative, with back-and-forth discussion between the agency and its suppliers.
Ultimately, after many rounds of testing and changes, one or more suppliers should emerge with solutions and implementation plans. For some agency operations, multiple suppliers provide alternative but compatible solutions, lessening the risk of supply chain delays and disruptions.
The recent and ongoing supply chain disruptions provide a rare window of opportunity for many agencies to take a step back and re-evaluate their processes and tools. By evaluating current solutions and determining their effectiveness in meeting the needs of the American public, agencies can identify areas for improvement and begin iterating on new solutions. Through comprehensive testing and open lines of communication with suppliers, agencies can ensure that the solutions in their supply chain can reliably meet the needs of the American public, with limited disruptions. Agencies can help holistically fortify America’s supply chains by replicating this process of evaluating current tools within multiple agency functions.
To learn how CGI can help agencies secure and manage their supply chains, contact Chris Hetman directly.