Commentary From Crisis Management Expert Edward Segal, Author of the Award- Winning Book "Crisis Ahead: 101 Ways to Prepare for and Bounce Back from Disasters, Scandals, and Other Emergencies " (Nicholas Brealey)

Accurate and current information about a crisis is important in helping to address the crisis, determine what caused the situation in the first place and help prevent it from happening again.

The Biden administration may have had this crisis management best practice in mind when it launched last week the Freight Logistics Optimization Works (FLOW) initiative. The pilot project seeks to improve the flow of information about the supply chain in order to ease the supply chain crisis, speed up the movement of goods and reduce consumer costs.

Participating Organizations 

FLOW includes 18 participants from various segments of the supply chain including private businesses, trucking, warehousing, ports and logistics companies. 

The companies include Albertsons, Gemini Shippers, Land O' Lakes, Target, True Value and logistics/shipping companies FedEx, Prologis and UPS.  The ports of Long Beach and Los Angeles and the Georgia Ports Authority will also be involved.

According to a White House fact sheet, the Department of Transporation, "will lead this effort, playing the role of an honest broker and convener to bring supply chain stakeholders together to problem solve and overcome coordination challenges. 

''This initial phase aims to produce a proof-of-concept freight information exchange by the end of the summer." 

Based On Similar Programs

CNN reported that, "The effort is modeled after similar systems in other government departments. The Federal Aviation Administration pools information involving aircraft safety. When coronavirus hit, the Department of Health and Human Services created a 'Control Tower' to share information among companies about medical equipment and supplies.

"Administration officials say that companies themselves have requested data-sharing assistance for supply-chain improvements."

'Not The Silver Bullet'

Volodymr Babich is a professor of operations and information management at Georgetown University's McDonough School of Business. He said, "Unfortunately, while this initiative is important, we should not expect that it will solve the supply chain problems we are facing. It is an important element of the solution, but by far not the silver bullet."

Babich said that's because, "Transportation is just one element of supply chains. Knowing where products are on the ocean or at the port is useful, but it does not do anything to address supply risks arising from manufacturing disruptions..."

"Similar initiatives using novel technologies, such as Blockchain, have been attempted in the past."

"The government will need to ensure that enough supply chain participants sign up for the new initiative and also that the information they are sharing is trustworthy."

Unanswered Questions

Daniel Hall is an economist and dean of High Point University's Phillips School of Business and has expertise in supply chain management. He said that, "FLOW is a good continuation of initial responses [to the supply chain crisis] as it addresses immediate causes of insufficient physical capital (physical infrastructure), human capital (addressing talent scarcity) and technical knowledge (digital infrastructure and data sharing). 

"It is less clear how FLOW will address the ultimate causes culture, institutions  and incentives that organize and determine availability of these factors of supply chain production. Incentives must be aligned across the full supply chain, or bottlenecks will stay longer and reoccur with new shocks," Hall commented.

'Taking On A Holy Grail Subject'

Thomas Goldsby is the Haslam Chair of Logistics at the University of Tennessee's Master's of Science in Supply Chain Management. He observed that, "The administration is taking on a 'holy grail 'subject in supply chain management by attempting to achieve visibility of the end-to-end supply chain. 

"The idea is that it's only possible to coordinate and plan when you can see what's taking place in the supply chain. While it's been technically feasible for two decades now thanks to companies' own internal information sharing tools, namely enterprise resource planning (ERP) systems, entities have been loathe to share this information across company boundaries. 

Emile Monette is the director of government contracts and value chain security at Synopsys.  He said, "It is absolutely a basic premise of risk management that you cannot manage what you do not know about. So, the move by the White House to work with a group of ports, logistics companies, retailers, and others, to illuminate at least some portion of the supply chain is undoubtedly a move in the right direction."

Tools Are Gaining Steam 

Goldsby noted that, "'Tools that capture a shipper's inbound and outbound flows are gaining immense steam with global disruptions abound, but those systems do not provide windows to the internal operations of suppliers or those parties further upstream. 

"Supply chain executives could gain considerable comfort from seeing what's going on at a supplier's supplier location or even the transit of inbound freight to a supplier location," Goldsby predicted.

'A Worthy Premise'

"Putting all the parties to a supply chain together into a common system for end-to-end visibility is a worthy premise, but a tough one to pull off. For instance, it's not clear how or whether international sources would be expected to participate," he pointed out.

"What has become abundantly clear to everyone is the dependency of American companies on direct and indirect sources of international supply. It's possible that the shipping manifest for import goods at an international port destined for the U.S. might serve as the beginning point for any such visibility. 

"Ensuring that companies only see their intended data and protecting against cyber intrusions represent significant concerns, too," Goldsby concluded.

                                                              ###