Logistically Speaking: The U.S. Needs a Department of the Supply Chain

Sept. 7, 2012
We need to let supply chain people start calling the shots, before it’s too late.

I used to think that there are two types of people: Those who see the glass half-empty and demand that somebody fill it for them, and those who see there’s a drinking fountain right next to them so they fill it up themselves. As the political season continues its lugubrious pace, I’m becoming increasingly convinced that there’s a third type: Those who don’t have a glass at all and have given up trying to get one.

As of July 2012, the U.S. unemployment rate stood at 8.3%, as measured by the Bureau of Labor Statistics (BLS), representing 12.8 million people. That number is bad enough, but when you factor in “discouraged workers” (yes, the BLS actually uses that term) and others without jobs who aren’t currently seeking work, the unemployment rate swells to 15.0%. There are 2.5 million of these “unemployed but not counted as unemployed” people, plus another 8.2 million part-time workers who want a full-time job but can’t find one. All told, there are currently 23.5 million people in the ranks of the unemployed/underemployed.

Now you would think a job situation this serious would dominate the daily news cycle, especially since only by getting these people back to work will we be able to reduce our national debt down to a more manageable size. Instead, we get carnival sideshows by both political parties, with the Democrats maligning big business at every turn while ensuring that labor unions prosper, and the Republicans insisting that regulations be rolled back and corporate taxes be reduced. And while these squabbles go nowhere, the nation sinks even deeper into debt as Washington’s only answer is to spend, spend, spend.

At the risk of making an already overbloated bureaucracy even larger, I think it’s time for a cabinet-level Secretary of the Supply Chain, somebody whose job is to oversee the interconnectedness of all businesses. This person would not be a career politician, nor an academic, nor a pundit. Instead, the Secretary would be an example of the best and brightest that the corporate world has to offer – somebody who knows from experience the importance of all the core supply chain functions: planning and forecasting, sourcing and purchasing, manufacturing, transportation and distribution, and all the processes in between along a product’s lifecycle.

We have more than enough czars and senior advisors who are accountable to no one and therefore end up producing nothing of substance. What we need in Washington is leadership, specifically, supply chain leadership. And by that I mean somebody who clearly sees the big picture. How refreshing it would be to have someone who actually understands the nature and the interdependency of global supply chains, and who is committed to making it easier for U.S. companies to meet the demands of their customers in a timely and efficient manner.

Consider the backgrounds of the closest thing the Obama Administration has to supply chain experts: Janet Napolitano, Secretary of Homeland Security (lawyer and career politician); Ray LaHood, Secretary of Transportation (teacher and career politician); Rebecca Blank, Secretary of Commerce (academic and career politician). We’re entrusting the economy of the country and the coordination of the national supply chain to people who have never even worked in the private sector. This kind of thing, of course, has been going on for years, but it’s time to say, “We need a better way.”

The U.S. Cabinet is still stuck in a 1960s mentality, when the Department of Transportation was created. Just as no one today would seriously claim that transportation is the be-all and end-all of supply chain management, so too should the government recognize that we’re already a dozen years into the 21st Century, and it’s about time that the Departments of Transportation, Homeland Security and Commerce all be rolled into a single entity, the Department of the Supply Chain (DOSC).

The mission of the DOSC should be something like this: “To ensure the efficiency of the U.S. supply chain in a way that meets the vital national interests of our industries and our people; that protects our industries and people from man-made and natural disasters; and promotes economic growth, technological competitiveness and sustainable development.” And written into the charter somewhere should be the requirement that the Secretary of the DOSC have substantial operational and managerial experience in the private sector.

The career politicians have driven us to the brink of a fiscal cliff, so before it’s too late, we need to call upon the supply chain experts to rescue us.

Follow me on Twitter @supplychaindave.