AuthorDane Kuehnrich, RUSCA Blog Committee On November 5th, 2021, Congress passed the Infrastructure Investment and Jobs Act, a nearly $1.2 trillion Bipartisan Infrastructure Deal which not even two weeks later was approved and signed into law by President Biden. As the largest infrastructure bill this country has seen in nearly three decades, this once-in-a-generation law is set to completely refurbish and modernize the U.S. infrastructure. While it is clear that this law has been passed in a time of such economic volatility, it is very important to note that this is not a stimulus bill. It is not a singular response to the crisis we are in, but instead it is a long-term plan to improve the nation’s economic competitiveness and resilience over the next decade (Tomer). With such an attention-grabbing price tag, it is crucial to understand exactly where this money is going. A very large portion of the deal is dedicated to making improvements to every-day processes and utilities. These improvements consist of a $55 billion investment to supply clean drinking water to every household in the country– benefitting nearly 10 million households, as well as a $65 billion investment to provide high speed internet access across the entire country– which will also lead to lower internet costs for all (The White House). The main purpose of this bill is to strengthen and modernize U.S. infrastructure by creating a more reliant and streamlined system of transportation, communication systems, and overall reduce the amount of backlogs we see in current logistics operations. In particular, the U.S. falls behind many European countries as well as China when it comes to our railway systems. And now, with countries like China beginning their own infrastructure improvements, it was necessary for the U.S. to include rail improvements in our own bill. This includes nearly $66 billion to put towards Amtrak passenger railways– promising to completely rehaul current Northeast corridor lines, develop modern high speed passenger rails, and expand passenger rails to more midwestern states that currently have little or no passenger rails. On top of this, there is roughly $100 billion being invested towards development of freight rail across the country (Sider and Bunge). The hope is to reduce maintenance backlogs and minimize bottlenecking of both passenger and freight rails. Another key factor of this infrastructure deal is the massive pool of job opportunities it will create. The sheer number of construction projects that will commence over the next decade will create well-paying union jobs, which will greatly help unemployment rates and offer a promising future for middle-class Americans. “Combined with the President’s Build Back Framework, it will add on average 1.5 million jobs per year for the next 10 years” (The White House). There will also be an increase in government job openings such as budget experts, project managers, and environmental engineers to lead some of these new projects. The past two years have been rough on the global economy. With rising inflation rates, high unemployment, and product shortages in nearly every industry, the U.S. is long overdue to receive some good news. Thankfully, this bill is offering a bright view into our future– ensuring that the U.S. will continue to be an advanced economic power, and its people will thrive with it. SOURCES: https://www.whitehouse.gov/briefing-room/statements-releases/2021/11/06/fact-sheet-the-bipartisan-infrastructure-deal/ https://www.wsj.com/articles/how-the-1-trillion-infrastructure-bill-aims-to-affect-americans-lives-11636173786?mod=series_bideninfrastructurehttps://www.brookings.edu/blog/the-avenue/2021/11/09/america-has-an-infrastructure-bill-what-happens-next/ AuthorCole Sayde, RUSCA Blog Committee Since 2015’s Paris Climate Accords--an international treaty on climate change--were signed by over 190 countries, economies around the world have honed in on transitioning to a sustainable future. To help achieve a green future, companies including the likes of Apple, Microsoft, and Amazon are aiming to become ‘carbon neutral’ in the next ten years. Carbon neutrality is achieved when the net of a company’s CO2 emissions is zero. For a company to be carbon neutral, though, they do not need to stop producing CO2; instead, organizations are holding suppliers to stricter standards, improving packaging techniques, and putting money towards offsetting their emissions: all to achieve a sustainable future. Apple, a benchmark in the technology industry, has pledged to become carbon neutral by 2030, and their supply chain has become a target for reducing emissions. Specifically, the tech-giant is radically changing its upstream strategy to have a greater hand in its manufacturing process. By breaking away from a 15-year partnership with chip-producer Intel, and insourcing many other core components, Apple can reduce its “indirect emissions throughout the supply chain” (Baravalle); These emissions, also known as “Scope 3” emissions, are reduced by insourcing as Apple will have more control over manufacturing and ensure the use of renewable energy in their manufacturing processes. For suppliers that remain, Apple is holding them to a higher standard and, so far, “71 of its manufacturing partners in 17 countries have committed to making its products using 100% renewable energy,” (Needleman). Apple is also reducing its carbon footprint by reducing its products' physical footprints. Consumers purchasing iPhones today, compared to five years ago, will notice thinner packaging profiles; this is a byproduct of removing charging blocks from phone packages. By removing chargers from their offering, Apple pays less for smaller package sizes, but on a larger scale, the company is eliminating “emissions that come from processing and transporting them” (Needleman)--also known as Scope 1 emissions. Apple will also be able to save on logistics emissions as they will be able to ship more iPhones due to their smaller profile. After all reduction efforts, companies will still have residual CO2, and for that, there are carbon offsets. These offsets involve funding for activities like planting trees, followed by third party certification of how many metric tons of carbon this is worth, and subtracting that from a company’s production output (McFarlane). Italian coffee processor Lavazza adopted three projects in 2020--two focused on forest conservation and one on reforestation--which have reduced the company’s overall emissions by almost four million metric tons. Consumers fear sustainability because of the potential for price increases, but BCG estimates increases of “no more than 4% in end consumer prices,” (Burchardt). 2030 may be 9 years away, but for life to be sustainable, the time to change is now, and companies like Apple are paving the way to a green future. SOURCES: https://www.lavazzagroup.com/en/how-we-work/the-sustainability-report.html https://www.wsj.com/articles/apple-pledges-to-be-carbon-neutral-by-2030-11595355023 https://www.wsj.com/articles/carbon-offsets-are-used-by-companies-seeking-net-zero-but-concerns-persist-11635079489 https://www.bcg.com/publications/2021/fighting-climate-change-with-supply-chain-decarbonization AuthorChristina Chen, RUSCA Blog Committee As suppliers struggle to deliver customer orders and labor shortages abound, many companies are turning towards technology as a solution. Innovations like 3D printing and self-driving vehicles are not new, and automation has steadily increased in nearly every industry for years, but they have had limited applications in supply chains. However, the current supply chain crisis has made these technologies increasingly attractive, accelerating the process of implementation. Dependencies on a few suppliers and long lead times have made it difficult for companies to receive the parts they need on time. Rather than risk not having the materials they needed for a project, Chevron Corp., an energy company, asked an additive manufacturing (another term for 3D printing) firm called AdditiveNow to manufacture the parts instead. Chevron is far from the only company realizing the potential of 3D printing—firms are using it to build everything from stainless steel rotors to massive concrete structures (Condie). 3D printing increases flexibility and allows companies to adapt to changing conditions, such as supply disruptions, while also reducing inventories and the associated costs. Another vital factor driving companies to adopt these technologies is the nationwide labor shortage, as companies’ current capabilities cannot keep up with soaring demand. Automation, in the form of robots and self-driving trucks, could fill the gaps. According to the Association for Advancing Automation, in the first three quarters of 2021 alone, North American companies spent $1.48 billion buying nearly 29,000 industrial robotics units, an increase of $390 million from the same period last year (Prang). The same goes for self-driving trucks. Embark Trucks, which develops technology for autonomous commercial trucks, already has 14,200 reservations for its system, which will be launched in 2024, reflecting “a vote of confidence by a range of trucking fleets who want to deploy the Embark Driver software.” (Gardner). The scale of these investments is an indicator of the automation-based futures of many industries. Automation can both take over repetitive tasks and supplement human labor. In the case of transportation and logistics, a significant factor in the shortage of truck drivers is the federal regulations they must abide by for safety reasons. After 11 hours of operating the vehicle, drivers must take at least a 10-hour break. While necessary for safe operation, this makes long-haul drives take much longer and therefore cost more. Self-driving software could solve this problem by allowing the driver to take breaks, an example of humans and machines successfully working together. These innovations are not a quick fix-all, however. 3D printing, in its current form, cannot fully replace traditional supply chains, and another hurdle complicating widespread implementation is the current lack of formal industry and insurance standards for 3D-printed parts. The impact of automation is also a valid concern, as workers—especially low-skilled ones—may be left behind in the name of efficiency. Firms should carefully evaluate these technologies to ensure an overall positive impact on supply chains and society at large. SOURCES: https://www.wsj.com/articles/energy-companies-turn-to-3-d-printing-to-bypass-snarled-supply-chains-11636657907 https://www.forbes.com/sites/greggardner/2021/10/14/embark-trucks-says-it-has-14200-reservations-for-its-self-driving-software-slated-for-launch-in-2024/?sh=5618ddcb4032 https://www.wsj.com/articles/companies-order-record-number-of-robots-amid-labor-shortage-11636669766 |
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