Simon Geale, executive vice president of procurement at Proxima, discusses the potential impact of President Biden’s new White House Council on Supply Chain Resilience.

Whether or not the new council will have its desired impact on domestic supply chains, it “signals intent,” Geale says. He views the body as the “missing governance piece” that’s needed to oversee the numerous actions that government has been taking to boost supply chain resilience within the U.S.

Biden’s moves come at a time when supply chain “regionalization” is taking place, as manufacturers lessen their reliance on producing in China, and seek locations closer to western markets. The trend was evident well before the coming of the pandemic in 2020, but COVID-19 provided the trigger for action, Geale says. “We are quite used to dealing with supply chain disruptions,” he adds. “What we weren’t able to cope with was all things happening at once. It was a big shock to the system.” 

In deciding which specific industries on which focus a reshoring effort, government and business will likely choose those sectors that are expected to play a major role in U.S. employment and security in the years ahead, such as defense, pharmaceuticals, high-tech and agriculture. They’ll be less concerned about continued Chinese production of lower-cost goods such as toys, textiles, furniture and domestic appliances. And certain countries that have served as the source of critical raw materials will likely retain that role. “It just makes sense to continue that way,” Geale says. 

The complete onshoring of manufacturing for the U.S. market isn’t feasible, Geale says. Producers will still be looking to lower-cost alternatives such as Mexico and Asia. He sees half a dozen economic and industrial “centerpieces” forming in the years ahead, with their future success dependent on the maintenance of stable economic policies by participating countries.