WASHINGTON — Sen. Sherrod Brown, D-Ohio, proposed the Supply Chain Resiliency Act, legislation that is aimed to promote U.S. companies and to avert supply chain disruptions. He made the proposal Wednesday during his weekly media conference call.
Throughout the pandemic, Ohio companies have reported supply chain disruptions which have cost them the ability to manufacture and deliver their products and remain competitive in a global marketplace. Shipping, delivery, and new home construction are examples of industries in Ohio that have all endured the “far reaching impacts” which this legislation hopes to address, Brown explained.
Supply chain bottlenecks during this holiday season continue to threaten the health of Ohio’s economy, as well as the larger U.S. economy, by creating gaps in manufacturing that are delaying the arrival of needed parts for the assembly of products, which, ultimately, delays delivery of these goods to consumers.
“Over the last few months we’ve seen supply chain disruption all over the country and around the world. There are a lot of different interconnected causes, especially the pandemic, creating bottlenecks at ports and other key infrastructure. It’s frustrating for business and its frustrating for consumers,” Brown said. “A delay in just one input can put a company far behind on filling orders or force them to redesign production.”
The solution, Brown believes, is to “invest in American manufacturers to decrease their reliance on long, international supply chains.” To accomplish this, he is proposing the creation of an Office of Supply Chain Resiliency at the Commerce Department.
The Office would provide loans, loan guarantees, and grants to small and medium manufacturers so they can meet consumer demand and expand U.S. production, as well as monitor, research, and address vulnerable supply chains.
Brown points the finger at past practices for outsourcing manufacturing internationally.
“We know part of the problem here is that we’ve had far too many corporations outsource production,” Brown said, citing tax reasons, the lower cost of labor, and “bone-headed tax and trade policy coming out of the federal government.”
With the economy recovering, strong job growth, and strong consumer demand, it’s important to ensure that consumers are getting the supplies they need and American manufacturers are receiving the components they require, Brown said.
Some of the specific items in shortage that Brown mentioned include medications, medical equipment, and semiconductors, and Brown said, American companies should not have to wait on “China or other countries on the other side of the world, when we have manufacturing talent here.”
Ethan Karp is president and CEO of MAGNET, the Manufacturing Advocacy & Growth Network, an organization in Cleveland that works to train the next generation of manufacturing workers in Ohio. “We at MAGNET go inside plants. We help them with everything from streamlining production to making new products, and manufacturers are busy. It is booming,” said Karp. But manufacturers are telling him they can’t produce enough to meet customer demand because of supply chain disruption. It’s “the little things,” especially, he says, that are missing and interfering with production lines, and while those pieces can be redesigned and the production process altered to make those accommodations, all of that takes time and costs the company money as well as potential sales losses. He also reports six month delays to receive chips from vendors used in the manufacture of electronics.
“Our prices are just going to continue going up as consumers if we don’t get a handle on figuring out how we stop these disruptions,” Karp said. “It went from shutdown in COVID, to can’t find enough people,” to “can’t get the materials.”
Elie Merheb, president and CEO of Kent Adhesive Products Company (KAPCO), based in Kent, Ohio, reported that their shipping times have doubled and in some cases tripled.