'Buy American' policies could disrupt supply chains, but compliance is critical

Dive Brief:

As NAFTA 2.0 negotiations will be under way in just a couple months, companies will likely face more pressure to 'Buy American,' according to federal requirements.
The Chamber of Commerce warned against the adoption of "Buy American" policies Monday, The Washington Examiner reported. Supply chain managers, logistics managers and procurement professionals will bear much of the burden of NAFTA 2.0's new rules and initiatives, and compliance is critical.
NAFTA 2.0 will disrupt supply chains, but the degree of disruption is still unknown. Now is a good time for supply chain managers and procurement professionals to start tracking spending and taking inventory so they will be prepared for the implications of NAFTA 2.0.

Dive Insight:

It’s not easy to segment buying to support governmental or commercial contract initiatives such as small business set asides, utilizing HUB suppliers, or ‘Buy American’ requirements. Global sources of supply and opaque tier X extended supply chains add to the confusion and uncertainty. Tracking the spending in these categories to meet regulatory compliance can be difficult. Yet, it is important to be compliant with contracts and also support their underlying business issues. It’s just not easy.

It can also be treacherous. One issue is the executive support for these initiatives. Some of those that sign these contracts, agreeing to focus spend in certain areas, may also have the ‘low cost and any cost’ attitude. Pressures on cost reduction often transcend the sometimes higher prices found in the identified segments. This puts buyers in the intersection of contract compliance and cost reduction. This is not a safe place to be.

Contract requirements aside, buyers do have more power than they think to contribute to the social supply chain. Sometimes personal beliefs and a social conscious allow buyers to buy American, consider HUB suppliers, help small business, and work to green their supply chain, even in an era of strict contract compliance and cost cutting environment. We certainly do it in our personal lives. It’s okay to do it in our professional ones as well.