CAPS recently sat down with North Carolina State University professor and CAPS researcher Robert B. Handfield, Ph.D., to get his take on U.S. President Joe Biden's post-inaugural executive orders and relevant world events that could impact your supply chain.
This video was recorded on January 21, 2021. Transcript as follows:
My name is Rob Handfield - I'm a professor of supply chain management at North Carolina State University. I'm also Executive Director of the Supply Chain Resource Cooperative at NC State.
As you know President Joe Biden issued 17 executive orders yesterday immediately after being inaugurated and I think this has a number of implications for supply managers, as well as a number of other events that are going on around the world today that, going forward in 2021, we should be thinking about.
The first is there are some enormous semiconductor chip shortages, and this is extending lead times on semiconductors – in some cases up to six to eight weeks. This is a function of the huge demand for laptops that has occurred as people work from home, but it's also shutting down some of the automotive companies. So that's problematic for anyone that that's buying semiconductors, which basically are used in almost everything today.
Keystone Pipeline and oil & gas implications
The second issue has to do with the Keystone Pipeline permit reversal and President Biden signed an order to immediately quit the pipeline. This is also problematic for a number of reasons. Number one: most of the refiners in the Houston Gulf Coast area were hoping to be able to get access to the Alberta heavy crude. Their systems are designed around that type of crude, so they're instead going to have to rely on Venezuela; well Venezuela has its own problems, as we know. And relations with Venezuela aren't exactly positive right now, so this is problematic from an oil and gas perspective. We're still not completely independent of petrochemicals and heavy crude, so this may be something that, you know, may be examined more in the future.
Paris Accord and forced labor
A third issue has to do with moving to the Paris Accord and the Paris Accord, one of the things they’re really stipulating, is around modern slavery. There’s modern slavery acts in the UK, Australia, and California. One of the big concerns there has to do with the Uyghur forced labor concerns. The Uyghur region of China, one of the biggest outputs they have there is cotton. So, some of the research we’ve done has shown that it’s really difficult to be able to trace cotton in those areas. Cotton is typically blended in the supply chain and it ends up showing up in a lot of different types of apparel. So, the idea of being able to restrict access to Uyghur cotton is going to be challenging as well and that’s a problem that no one has really figured out how to deal with yet. There are some technologies that claim that the DNA of cotton can be traced; those technologies are a little bit suspect as well.
COVID-19 vaccine disssemination
One of the biggest executive orders, of course, is the Biden vaccine strategy document. I went through that document this morning and I think that, in general, it sort of, I would call it kind of fluffy still - it doesn’t really get into the details. Especially there were some real problems, I think, with the holdup of the vaccine. And as we’re seeing, the problem today is not with the supply of vaccines, I think we’re seeing plenty of those. I think it has to do with the distribution of vaccines. One of the things that Biden did put into that plan, which I think is good, is he’s allocating $50 billion to help the states. And I think the states can really use that funding to get the National Guard out, to be able to use alternative and creative ways of vaccination to speed up the vaccine. And speeding up the vaccine is going to be really critical. It’s going to be important for your businesses as well. People with vaccines will more likely be willing to come back to work.
Coronavirus antigen testing
The other thing we saw in the plan is increasing the number of what they call antigen tests, or the fifteen-minute test, if you can think of them that way. Those tests are also important because I think we can get quicker results. We can also modify them if there are other variants. We have the UK variant, there’s a South African variant, there’s even a Brazilian variant, and we may start to see variants of this COVID, you know, pandemic start to emerge. Those antigen tests can be modified quickly, and they can be a really important part as we think about going back to work.
Long-term work from home & commercial real estate
Speaking of going back to work, I think a lot of organizations are thinking about what their strategy will look like in 2021 and what proportion of their workforce will in fact be going back to work. This could have real implications for real estate. As we know the commercial real estate market is in sort of tatters right now as organizations are debating whether they really want to go back to work. And that can impact leases, which could impact property values.
So, these are all some of the outcomes we think are on the horizon in 2021 to start thinking about. Supply chain procurement leaders will clearly be at the forefront of these discussions and hopefully we’ll be able to weigh into your board in terms of what’s going on.
So happy 2021, we’ll see you next time! Thank you.
More from Dr. Handfield
Explore the entire CAPS Library
Check out a handful of other reports for both members and non-members by Robert B. Handfield, Ph.D., in the CAPS Library available with a free account. Please note that reports released within the last four years are reserved for members.