Supply chain challenges and silver linings

Dave Thomson, P.E., is Hanson’s industry market principal. This article was published in the October issue of BIC Magazine.

Current social and economic upheaval highlights the downside of a decades-long trend of U.S.-based industries outsourcing production to other countries.

Although the COVID-19 crisis has underscored the vulnerabilities in the U.S. medical supply chain, a review of the security of the entire production chain – from raw material sourcing and manufacturing to final distribution to the end consumer – is underway by many companies. Even before the current conditions, concerns with quality control, trans-Pacific shipping costs and market proximity were not only persuading American companies to bring their operations home, but convincing foreign companies to locate in mainland America.

There are predictions that between $800 billion and $2 trillion of investment in the U.S. industrial economy in the next decade will be needed to return security to manufacturing and distribution for U.S. consumers. These big numbers will not be invested by private industry alone. There will also be requirements to change regulations, tax structures and incentive programs within government. One example is the program in Alberta Province, Canada, which provides incentives to new petroleum chemical industrial plants, leading to economic and job growth.

It is also going to require changes in how the public perceives private industry and manufacturing. Let’s face it: Industry and manufacturing have been vilified for years. In almost every Hollywood plot, big companies are the bad guys and, like it or not, this has an effect on the psyche of the general public. Presenting a better narrative of the benefits of industrial growth is critical. It must be done in a manner that is responsible to local communities, with the knowledge that every project has both positive and negative impacts. Believe it or not, the impacts to communities must remain neutral at worst and positive at best. If all negative impacts are perceived to fall on the community, and all perceived benefits go to state governments and companies, there will be significant resistance. Presenting the benefits is not easy, especially for longer-term projects. It is easy to take a picture of a tree that will disappear with a project, but no one wants to wait 10 years to see a replanted tree grow.

It is in our best interest to be aware of and respond to issues raised by citizens that may be affected by our current or future projects. Yes, falsehoods are often spread to affect an industry’s ability to locate or expand a plant. All of us in private industry must work together to change the “not in my backyard” mindset.

For example, a mine fought for years to gain approval to begin operations. Company representatives attended meetings during which individuals claimed their children would be deformed because of pollution. Once the mine began operations, it was cited for releasing water that was too clean for the local watershed and had to dilute the water before releasing it into the environment. The mine has now been operating for years and provides hundreds of high-paying jobs to the local economy. This is an example of how to integrate local concerns into your project early and make them work for you in the permitting process.

Hanson led a project that drew huge concern over its impact to a migratory bird habitat. We reviewed alternatives and were able to reduce the cost of the project to the owner by over $4 million, while increasing the migratory bird habitat by 6.3 acres over the original amount. We won an environmental award for our ability to integrate a greenfield project into a site everyone thought could not be built on and made improvements for the owner and environment: win-win.

We must embrace a mindset that not only accounts for the realities, but creatively develops solutions to improve them. Will there be hurdles and setbacks? Of course. But is it possible? Yes.

Staying optimistic is difficult at times, but stay motivated to pursue new ideas. As my mother said to me many times, “There is a silver lining to every cloud; you just have to look hard sometimes to find it.”

Reflect on what you have and what is possible, and search for those silver linings.