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Government’s Supply Chain Management: Legislate It

In case you haven't heard, there are a few new pieces of legislation that could have an impact on your supply chain practices and your business operations.

One of them comes out of the US and, like all good laws, is already commonly known by its initials, NDAA. Another agreement that could touch global companies is a supply chain security agreement between Canada and the European Union.

Many of you will know NDAA — the National Defense Authorization Act — and its famous Section 818, the directive requiring the Department of Defense to keep counterfeit parts out of its supply chain. EBN has been following this since Congress signed off on it last year, and George Karalias from Rochester Electronics blogs here about the many unanswered questions the electronics supply chain will have to contend with as legislative reality kicks in.

What's important to note is that President Barack Obama officially signed the NDAA into law back in January, and organizations such as ERAI are busy educating their members about the impact legislation like this has on the entire supply chain.

Ship-shape

A new Canada-EU agreement and similar EU supply chain security deals in place  with countries such as Switzerland, Norway, and the United States demonstrate  how far supply chain management conversations have escalated within governments.

A new Canada-EU agreement and similar EU supply chain security deals in place
with countries such as Switzerland, Norway, and the United States demonstrate
how far supply chain management conversations have escalated within governments.

Different animal
The Canada-EU agreement, which has yet to be ratified by both sides, is a different breed of government-related supply chain oversight, and has more to do with ensuring safe borders and trade between the regions.

Earlier this month, Canada and the EU extended a customs cooperation and mutual assistance agreement that went into effect in 1998 to include supply chain security and related risk management matters, according to a post on Europolitics. The updated clauses call for “closer cooperation and mutual recognition of risk management techniques, risk standards, security controls and trade partnership programs between the EU authorised economic operator (AEO) and Canada's partners in protection (PIP).”

The Canada-EU pact isn't a new concept, per se . There are similar EU supply chain security deals in place with Switzerland, Norway, the United States (which targets container security), China (focused on the logistics chain), and Japan, according to Europolitics.

Although addressing different issues in different ways (and there are many other government-endorsed regulations that come to mind, such as the recent Dodd-Frank Wall Street Reform and Consumer Protection Act, which, in part, addresses Congo-related conflict minerals sourcing and monitoring requirements), these two examples demonstrate how far supply chain management conversations have escalated within government realms.

Molding policy
For good or bad, politicians are getting their fingers deeper into shaping policies that will touch parts of the high-tech supply chain one way or another. Whether the government cites national security as a reason for involvement or responds to public pressure to address certain social, humanitarian, or environmental concerns, you can bet there will be more of these kinds of statutes and international pacts in the works.

So…

  • Are your legal teams ready to interpret how these provisions will affect your day-to-day supply chain practices or longer-term strategy?
  • Supply chain professionals: How do you stay on top of these different and changing international legal requirements?
  • Which ones are you paying the most attention to?

3 comments on “Government’s Supply Chain Management: Legislate It

  1. HM
    March 22, 2013

    Its good for the electronics industry if governments take tough stand on forfeit components and bring in tougher laws to safeguard supply chain management.

  2. Brian Fuller
    March 22, 2013

    The big question is your first, Jennifer. If you're a multimillion-dollar company, you probably have a methodology to gather and react to the information around rules and regulations. If you're not, and there are a LOT of those companies, it falls to any number of various job descriptions internally. 

    I'd be interested in knowing whether there's a revenue cutoff at which companies generally have a compliance officer and below which they don't. 

     

  3. HM
    March 25, 2013

    Good point Brian.

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