April 12, 2022
SBA Hot Topic Tuesday – Supporting Domestic Manufacturing will Aid Supply Chain Disruptions
“When factories close, when products sit in shipping containers in ports, when production capacity decreases due to sick employees, and when products take longer to get from the warehouse to the store, prices go up… Rebuilding our domestic manufacturing sector, which has been decimated by decades of off-shoring by large corporations, will require a whole-of-government strategy, and it will require an investment in our small manufacturers, who will be key to our long-term resilience,” says Chair of the Senate Committee on Small Business & Entrepreneurship, Ben Cardin. The Senate Committee on Small Business & Entrepreneurship’s hearing on March 30 reviewed the Supply Chain Crisis and the Implications for Small Businesses.
One restaurant owner stated that prices for many products his restaurant needs have increased by over 60% in a month, and there are purchase limits on some products. Another restaurant owner said that a 5-pound box of non-GMO oil that was priced at $38 is now priced at as high as $110. Pairing the inflation of goods and other expenses accumulated by restaurant owners, it is difficult for many restaurants to stay afloat.
To aid the supply chain disruptions, they are advocating for strengthening our current domestic manufacturers. Many corporations within the United States have outsourced their labor and products over the last four decades. Joel Griffith uses California as an example of the negative impacts caused by the non-domestic shipping of goods since it receives almost half of all containers coming into the United States:
“After sitting up to weeks on boats, containers of goods can wait weeks longer for the select few trucks and truckers that California’s environmental and labor laws allow into the state, only to be transported to California’s border where the remaining 70 percent of trucks in the United States are free to come and transfer the goods across the rest of the country. All this adds time and hassle, backing up the supply chain further, and raising the costs of the goods themselves,” discusses Joel Griffith in his testimony.
The federal government can support a competitive domestic manufacturing sector through grants and low-interest loans to upgrade equipment and expand operations, partnerships with vocational training programs for talent development, and export markets.
“There is no entity in the federal government focused on U.S manufacturing competitiveness. To ensure that the U.S establishes the industries of the future, let alone prepare for the next crisis, we need a ‘coach’ – that is a new entity in the federal government whose sole focus is to strengthen U.S. manufacturing competitiveness and to ensure that what is invented here is manufactured here,” says Sridhar Kota, Executive Director of MForesight: Alliance for Manufacturing Foresight.