- The White House may resort to executive action to address perceived national security threats within the U.S. telecommunications supply chain, which relies heavily on Chinese manufacturers for procurement.
- According to The Wall Street Journal, it's still unclear what kind of executive order will be issued or how it will address perceived issues.
- This news comes just after the Pentagon ordered stores on all U.S. military bases to stop selling phones made by Huawei Technologies and ZTE.
Geopolitical posturing and activities at home and abroad has added risk to the supply chain in the important telecommunications sector. Other supply chain sectors are feeling the heat as well, or they soon will be.
Supply chain managers have to remain fully up to speed on the giant chess game played daily by world leaders. Some might yearn for the days of "simple" risk when the only things to worry about with shipments from Asia were Pacific storms and port congestion. These days the comments and actions from world leaders in the United States, China and other nations create enormous political and economic uncertainly.
And the last thing an international supply chain needs is uncertainty.
We need to separate the rhetoric from action. While the blusterous talk coming from the United States has some roots in economic policy and national security, the actions coming out of China are a bit more sinister. Their leader, having been recently elected for life, is consolidating power and taking greater control over China’s technology sector.
The race with the United States for technological dominance is accelerating. While the proxies in this race may be telecommunications products, the real issue is technology driven military dominance. That becomes a domestic national security issue and that transcends supply chain issues.
Political activity is running faster than your supply chain. When your last shipment from Shanghai was being loaded, the United States was in a nuclear war of words with the leader of North Korea. By the time your containers reached your factory, the leaders of North and South Korea were enjoying lunch together.
And in anticipation of a U.S. and North Korean summit, the U.S. is studying the reduction of their troops in South Korea. How might this impact China? Japan? Malaysia? India? Your suppliers?
Just how can you create a stable sourcing strategy in a political environment that changes daily?
Supply chain managers in the telecommunications supply chain need to pay careful attention to short and long-term political issues that will create an additional layer of risk. But others managing supply chains with stops through China, or Asia for them matter, might want to pay a bit more attention not only the headlines, but to the analysis behind them. Some of these political stories leave the front page in a matter of hours. Sourcing decisions last a bit longer.
I guess my 8th grade social studies teacher was right. This is important stuff.