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The Government Circuit: Renewed Focus on Worldwide Supply Chain Amid COVID-19

One of the key takeaways from the COVID-19 pandemic is that in times of crisis, sophisticated global supply chains can break down. As a result, companies and governments are revisiting the resiliency of essential supply chains and how best to adapt to “the new normal.” 

As the pandemic continues to play out, IPC is actively engaged in the debate over whether to promote global trade versus the regionalization of supply chains. We think that is a false choice; smart governments will support both. That is, we are committed to global commerce and a lowering of trade barriers, and we also believe all nations should shore up trusted supply chains for electronics related to essential governmental functions, including healthcare and national security.

That is why, for example, IPC has called for the leaders of the United States, Canada, and Mexico to take immediate action to grow regional capacity for electronics manufacturing and create systems to monitor capacity in times of crisis. For more on that idea, check out this article ^[1] by IPC President and CEO Dr. John Mitchell.

And for further insight on how COVID-19 is impacting our supply chains, and how we must respond, check out this article ^[2] in Industry Week by IPC’s Chief Economist Shawn DuBravac.

Congress Addresses Supply Chain Concerns

In Washington, D.C., in recent weeks, there have been growing efforts to address supply chain strength and resiliency in critical industries, including defense. In June, both the U.S. Senate Armed Services Committee and its House counterpart worked on the annual National Defense Authorization Act (NDAA), including amendments offered by Sen. Josh Hawley (R-MO) and Rep. Vicky Hartzler (R-MO) to boost the domestic defense electronics supply chain.

On another front, IPC joined a diverse group of defense contractors and universities to call on Congress to fund a five-year, $40 million R&D program that will lead to reliability standards for lead-free electronics in aerospace, defense, and other high-performance systems. We believe this R&D is essential for the defense sector to keep pace with commercial innovation and field reliable military systems for decades into the future.

In another key sector of the electronics supply chain, U.S. lawmakers recently introduced bipartisan legislation called the CHIPS for America Act ^[3], which would provide $25 billion in funding and tax credits to strengthen domestic semiconductor production. Notably, the legislation includes $10 billion for a federal grant program that would incentivize new domestic semiconductor manufacturing facilities and a refundable investment tax credit for the purchase of equipment.

Consistent with our overall position on supply chain security, IPC believes the CHIPS Act is a positive development, and we will continue to urge the U.S. government and all governments to support the growth of the entire electronics supply chain, including printed circuit boards, printed circuit board assemblies, and other electronic components.

Please let us know if you have any questions or concerns about this issue.

Traceability of Substances Study Published in Europe

In the European Union, as well, there are ongoing discussions about the importance of strong regional and global supply chains.

A recent study on traceability of substances of concern (SoCs) in products from supply chains to waste operators—mandated by the European’s Commission Directorate-General for Internal Market, Industry, Entrepreneurship, and SMEs (DG GROW) —supported efforts to improve the interface between chemicals, products, and waste legislation ^[4]. The study concluded that “improved sorting early in the waste chain may create considerable benefits at low cost,” and “more sophisticated approaches using databases allow information update after placing on the market...but are more costly.” Meanwhile, “a combination of material-based and product-sector approaches to communicate on SoCs in products seems necessary to achieve a safe, more circular economy.”

Check out this 2019 IPC report on supply chain traceability regarding SoCs for more information ^[5]. The report explores the need for a more holistic and consistent approach to identifying and reporting on chemicals use.

How can the EU best address your supply chain concerns in their new circular economy strategy ^[6]? Please let us know your thoughts.

EU Justice Commissioner Confirms Due Diligence Proposal in Progress

Elsewhere in the EU, during a June 8 webinar ^[7], European Union Justice Commissioner Didier Reynders reconfirmed his plan to introduce a mandatory due diligence legislative proposal in the EU by the end of this year. The legislation will seek to require “businesses to carry out due diligence in relation to the potential human rights and environmental impacts of their operations and supply chains.” The proposal is expected to include sanctions for businesses that do not comply. The European Council and European Parliament are expected to follow up on Reynders’s proposal, and they may seek to include businesses operating outside the EU in the legislation’s scope.

Need Something to Smile About?

Have you ever struggled to explain to someone what your company does or why it matters? Are you ever frustrated by the public’s general lack of awareness of electronics manufacturing?

Now you can show them this new 90-second video from IPC ^[8], which illustrates the many ways that electronics are making people’s lives safer, healthier, more connected, secure, and fun. Please help us promote the video by sharing it on social media with the hashtag #OurLivesDependonElectronics; use this link ^[9] and send it to your elected officials; and/or send the YouTube link ^[10] to your workforce, business partners, families, and friends. We want to ensure everyone learns more about “the crucial industry that’s at the heart of the modern world.”

As always, please let us know if you have any questions or suggestions for IPC advocacy in the coming months. We are here to support you. Stay safe!

References

1. J. Mitchell, “Opinion: Covid-19 Illustrates Need for North American Manufacturing Initiative,” Mexico Today, June 18, 2020.
2. S. DuBravac, “Why Free Trade Needs a Comeback,” Industry Week, June 11, 2020.
3. I. King, J. Leonard, & L. Litvan, “U.S. Lawmakers Propose $25 Billion to Help Chip Industry,” Bloomberg, June 10, 2020.
4. Publications Office of the European Union, “Information flows on substances of concern in products from supply chains to waste operators,” May 2020.
5. T. Sukhraj, “Supply chain traceability of substances of concern across the electronics supply chain,” IPC, pp. 1–62, 2019.
6. European Commission, “EU Circular Economy Action Plan.”
7. International Federation for Human Rights, “WEBINAR: Towards Effective EU Mandatory Human Rights & Environmental Due Diligence,” June 10, 2020.
8. IPC, “What Is Electronics Manufacturing and Why Is It Important?”
9. IPC, “Share IPC’s Video: “Our Lives Depend on Electronics.”
10. IPC, “Our Lives Depend on Electronics,” May 28, 2020.

Chris Mitchell is IPC’s VP of global government affairs. Contact him at ChrisMitchell@ipc.org.