For a collaborative public-private partnership to work, the individual interests of the private sector must be brought into alignment with the requirements of the collective good.
Karl Buschmann is a strategic advisor for the Council of Supply Chain Management Professionals. He works with the executive leadership team on key business development initiatives, such as the Executive Inner Circle, the development of private/public partnerships, and brand building. He acts as an ambassador, influencer and evangelist for CSCMP with other associations, industry trade groups, and stakeholders in the supply chain discipline. Using his background in global trade and higher education, Buschmann has been instrumental in helping to create the semiconductor supply chain report, an alliance with The Association for Manufacturing Technology, and new channels for membership growth and expansion. He is also an adjunct policy analyst at RAND.
Bradley Martin is the director at the RAND Corporation's National Security Supply Chain Instituteand a senior policy researcher at the RAND Corporation, where he has worked since November 2012. His work has emphasized issues of vulnerability resulting from economic interdependence, strategic readiness impacts from logistics and infrastructure shortfalls, and the overlap between geopolitics and supply chain exposure. His most recent work has focused on the challenges associated with China’s position in multiple different supply chains critical to the U.S. and its allies.
Daniel Egel is a senior economist; director at the RAND Corporation's Economics and National Security Initiative; and a professor of policy analysis at the Pardee RAND Graduate School.
The United States is at an inflection point in its approach to supply chain management. Facing off against China, an adversary that has both a proven capability and willingness to weaponize supply chains against the United States and its allies, both the U.S. government and U.S. private companies are embracing a pivot away from efficiency to resilience.
Effectively managing this transition from efficiency to resilience, while ensuring that the United States is postured for the economic and national security threats created by hyper efficient supply chains, will require new modalities for public-private partnership.
Recent decades have demonstrated that market forces generally do produce very efficient supply chains. These supply chains, under private sector ownership, have resulted in a worldwide economy that is in some respects prosperous beyond the wildest expectations of the 18th and 19th century economists who initially pointed to the virtues of specialization.
However, this efficiency depends, in large part, on geopolitical stability. The quarter-century following the end of the Cold War proved remarkably stable. However, this stability is increasingly under threat, both by acute threats like Russia's war in Ukraine and the increasing tensions between Washington and Beijing.
A public-private approach—widely acknowledged as critical to overcoming these supply chain risks—is at the heart of a series of landmark U.S. efforts. This is demonstrated by the design of the Supply Chain Disruptions Task Force, Bipartisan Infrastructure Act, CHIPS and Science Act, and Inflation Reduction Act. Each embraces a partnership between the U.S. government and the private sector in addressing the supply chain disruptions that began with the COVID-19 pandemic and have evolved with rising U.S.-China competition.
The U.S. government has long recognized the value of public-private partnerships in addressing systemic challenges to supply chains. An example is the Advisory Committee on Supply Chain Competitiveness, which was established with the specific purpose of giving the Secretary of Commerce industry expert advice on a comprehensive national freight infrastructure policy. The potential of these types of partnerships is illustrated by this committee's role in raising awareness of systemic congestion and bottlenecks at ports in 2021.
However, there is often a disconnect between the public rhetoric of public-private partnerships and the reality of how they are implemented.
This is demonstrated most clearly, perhaps, in the difficulties that the White House has faced in effectively engaging with commercial actors in executing its landmark programs. As a prominent example, the CHIPS and Science Act has been criticized for picking winners and losers rather than filling gaps that the private sector is not equipped to fill. Missed opportunities for collaboration have resulted in mistrust.
Another missed opportunity is the White House's new Council on Supply Chain Resilience, which was announced with little private sector consultation. There is no doubt that coordination across U.S. government agencies, the primary mandate of this council, is indeed valuable. However, it is an open question whether this council can be effective without private sector collaboration. Building a private sector counterpart to this council, perhaps building from the model of Commerce's analogue advisory committee, seems like a policy worth considering. The three leading supply chain professional organizations—Council of Supply Chain Management Professionals, Association for Supply Chain Management, and Institute for Supply Management—could enable the objectives that this council seeks to achieve and provide a mechanism for monitoring supply chain performance.
Other examples of missed opportunities are in government-industry exchange programs. These should be ideal chances for civil servants and academicians to learn something about private sector decisionmaking. But, as documented in a 2022 report from the U.S. General Accountability Office, this has not been the case. Correcting this discrepancy would require a change to the Intergovernmental Personnel Act of 1970.
Building Resilient Supply Chains (PDF) from the Economic Report of the President (PDF) outlined the opportunities and challenges in 2022, and suggests both the need and the intent to support this kind of collaboration. However, for this collaborative public-private partnership to work, the individual interests of the private sector must be brought into alignment with the requirements of the collective good perspective and policy goals of the public sector. Both partners have useful tools and working examples to now make this vision happen.
Business software vendor Cleo has acquired DataTrans Solutions, a cloud-based procurement automation and EDI solutions provider, saying the move enhances Cleo’s supply chain orchestration with new procurement automation capabilities.
According to Chicago-based Cleo, the acquisition comes as companies increasingly look to digitalize their procurement processes, instead of relying on inefficient and expensive manual approaches.
By buying Texas-based DataTrans, Cleo said it will gain an expanded ability to help businesses streamline procurement, optimize working capital, and strengthen supplier relationships. Specifically, by integrating DTS’s procurement automation capabilities, Cleo will be able to provide businesses with solutions including: a supplier EDI & testing portal; web EDI & PDF digitization; and supplier scorecarding & performance tracking.
“Cleo’s vision is to deliver true supply chain orchestration by bridging the gap between planning and execution,” Cleo President and CEO Mahesh Rajasekharan said in a release. “With DTS’s technology embedded into CIC, we’re empowering procurement teams to reduce costs, improve efficiency, and minimize supply chain risks—all through automation.”
And many of them will have a budget to do it, since 51% of supply chain professionals with existing innovation budgets saw an increase earmarked for 2025, suggesting an even greater emphasis on investing in new technologies to meet rising demand, Kenco said in its “2025 Supply Chain Innovation” survey.
One of the biggest targets for innovation spending will artificial intelligence, as supply chain leaders look to use AI to automate time-consuming tasks. The survey showed that 41% are making AI a key part of their innovation strategy, with a third already leveraging it for data visibility, 29% for quality control, and 26% for labor optimization.
Still, lingering concerns around how to effectively and securely implement AI are leading some companies to sidestep the technology altogether. More than a third – 35% – said they’re largely prevented from using AI because of company policy, leaving an opportunity to streamline operations on the table.
“Avoiding AI entirely is no longer an option. Implementing it strategically can give supply chain-focused companies a serious competitive advantage,” Kristi Montgomery, Vice President, Innovation, Research & Development at Kenco, said in a release. “Now’s the time for organizations to explore and experiment with the tech, especially for automating data-heavy operations such as demand planning, shipping, and receiving to optimize your operations and unlock true efficiency.”
Among the survey’s other top findings:
there was essentially three-way tie for which physical automation tools professionals are looking to adopt in the coming year: robotics (43%), sensors and automatic identification (40%), and 3D printing (40%).
professionals tend to select a proven developer for providing supply chain innovation, but many also pick start-ups. Forty-five percent said they work with a mix of new and established developers, compared to 39% who work with established technologies only.
there’s room to grow in partnering with 3PLs for innovation: only 13% said their 3PL identified a need for innovation, and just 8% partnered with a 3PL to bring a technology to life.
Even as a last-minute deal today appeared to delay the tariff on Mexico, that deal is set to last only one month, and tariffs on the other two countries are still set to go into effect at midnight tonight.
Once new U.S. tariffs go into effect, those other countries are widely expected to respond with retaliatory tariffs of their own on U.S. exports, that would reduce demand for U.S. and manufacturing goods. In the context of that unpredictable business landscape, many U.S. business groups have been pressuring the White House to pull back from the new policy.
Here is a sampling of the reaction to the tariff plan by the U.S. business community:
American Association of Port Authorities (AAPA)
“Tariffs are taxes,” AAPA President and CEO Cary Davis said in a release. “Though the port industry supports President Trump’s efforts to combat the flow of illicit drugs, tariffs will slow down our supply chains, tax American businesses, and increase costs for hard-working citizens. Instead, we call on the Administration and Congress to thoughtfully pursue alternatives to achieving these policy goals and exempt items critical to national security from tariffs, including port equipment.”
Retail Industry Leaders Association (RILA)
“We understand the president is working toward an agreement. The leaders of all four nations should come together and work to reach a deal before Feb. 4 because enacting broad-based tariffs will be disruptive to the U.S. economy,” Michael Hanson, RILA’s Senior Executive Vice President of Public Affairs, said in a release. “The American people are counting on President Trump to grow the U.S. economy and lower inflation, and broad-based tariffs will put that at risk.”
National Association of Manufacturers (NAM)
“Manufacturers understand the need to deal with any sort of crisis that involves illicit drugs crossing our border, and we hope the three countries can come together quickly to confront this challenge,” NAM President and CEO Jay Timmons said in a release. “However, with essential tax reforms left on the cutting room floor by the last Congress and the Biden administration, manufacturers are already facing mounting cost pressures. A 25% tariff on Canada and Mexico threatens to upend the very supply chains that have made U.S. manufacturing more competitive globally. The ripple effects will be severe, particularly for small and medium-sized manufacturers that lack the flexibility and capital to rapidly find alternative suppliers or absorb skyrocketing energy costs. These businesses—employing millions of American workers—will face significant disruptions. Ultimately, manufacturers will bear the brunt of these tariffs, undermining our ability to sell our products at a competitive price and putting American jobs at risk.”
American Apparel & Footwear Association (AAFA)
“Widespread tariff actions on Mexico, Canada, and China announced this evening will inject massive costs into our inflation-weary economy while exposing us to a damaging tit-for-tat tariff war that will harm key export markets that U.S. farmers and manufacturers need,” Steve Lamar, AAFA’s president and CEO, said in a release. “We should be forging deeper collaboration with our free trade agreement partners, not taking actions that call into question the very foundation of that partnership."
Healthcare Distribution Alliance (HDA)
“We are concerned that placing tariffs on generic drug products produced outside the U.S. will put additional pressure on an industry that is already experiencing financial distress. Distributors and generic manufacturers and cannot absorb the rising costs of broad tariffs. It is worth noting that distributors operate on low profit margins — 0.3 percent. As a result, the U.S. will likely see new and worsened shortages of important medications and the costs will be passed down to payers and patients, including those in the Medicare and Medicaid programs,” the group said in a statement.
National Retail Federation (NRF)
“We support the Trump administration’s goal of strengthening trade relationships and creating fair and favorable terms for America,” NRF Executive Vice President of Government Relations David French said in a release. “But imposing steep tariffs on three of our closest trading partners is a serious step. We strongly encourage all parties to continue negotiating to find solutions that will strengthen trade relationships and avoid shifting the costs of shared policy failures onto the backs of American families, workers and small businesses.”
In a statement, DCA airport officials said they would open the facility again today for flights after planes were grounded for more than 12 hours. “Reagan National airport will resume flight operations at 11:00am. All airport roads and terminals are open. Some flights have been delayed or cancelled, so passengers are encouraged to check with their airline for specific flight information,” the facility said in a social media post.
An investigation into the cause of the crash is now underway, being led by the National Transportation Safety Board (NTSB) and assisted by the Federal Aviation Administration (FAA). Neither agency had released additional information yet today.
First responders say nearly 70 people may have died in the crash, including all 60 passengers and four crew on the American Airlines flight and three soldiers in the military helicopter after both aircraft appeared to explode upon impact and fall into the Potomac River.
Editor's note:This article was revised on February 3.
GE Vernova today said it plans to invest nearly $600 million in its U.S. factories and facilities over the next two years to support its energy businesses, which make equipment for generating electricity through gas power, grid, nuclear, and onshore wind.
The company was created just nine months ago as a spin-off from its parent corporation, General Electric, with a mission to meet surging global electricity demands. That move created a company with some 18,000 workers across 50 states in the U.S., with 18 U.S. manufacturing facilities and its global headquarters located in Massachusetts. GE Vernova’s technology helps produce approximately 25% of the world’s energy and is currently deployed in more than 140 countries.
The new investments – expected to create approximately 1,500 new U.S. jobs – will help drive U.S. energy affordability, national security, and competitiveness, and enable the American manufacturing footprint needed to support expanding global exports, the company said. They follow more than $167 million in funding in 2024 across a range of GE Vernova sites, helping create more than 1,120 jobs. And following a forecast that worldwide energy needs are on pace to double, GE Vernova is also planning a $9 billion cumulative global capex and R&D investment plan through 2028.
The new investments include:
almost $300 million in support of its Gas Power business and build-out of capacity to make heavy duty gas turbines, for facilities in Greenville, SC, Schenectady, NY, Parsippany, NJ, and Bangor, ME.
nearly $20 million to expand capacity at its Grid Solutions facilities in Charleroi, PA, which manufactures switchgear, and Clearwater, FL, which produces capacitors and instrument transformers.
more than $50 million to enhance safety, quality and productivity at its Wilmington, NC-based GE Hitachi nuclear business and to launch its next generation nuclear fuel design.
nearly $100 million in its manufacturing facilities at U.S. onshore wind factories in Pensacola, FL, Schenectady, NY and Grand Forks, ND, and its remanufacturing facilities in Amarillo, TX.
more than $10 million in its Pittsburgh, PA facility to expand capabilities across its Electrification segment, adding U.S. manufacturing capacity to support the U.S. grid, and demand for solar and energy storage
almost $100 million for its energy innovation research hub, the Advanced Research Center in Niskayuna, NY, to strengthen the center’s electrification and carbon efforts, enable continued recruitment of top-tier talent, and push forward innovative technologies, including $15 million for Generative Artificial Intelligence (AI) work.
“These investments represent our serious commitment and responsibility as the leading energy manufacturer in the United States to help meet America’s and the world’s accelerating energy demand,” Scott Strazik, CEO of GE Vernova, said in a release. “These strategic investments and the jobs they create aim to both help our customers meet the doubling of demand and accelerate American innovation and technology development to boost the country’s energy security and global competitiveness.”