Washington, D.C.— Today, the House Small Business Committee Subcommittee on Economic Growth, Tax, and Capital Access heard testimony from small business owners and experts about the impact of the COVID-19 crisis on small business supply chains. Since the onset of the pandemic, many small business supply chains have been disrupted, exposing long-standing vulnerabilities in the way that firms acquire their materials, components, and products.
The hearing, chaired by Rep. Brad Schneider (D-IL), gave Members the chance to examine the nature of current supply chains, how they are being disrupted by the pandemic, and what Congress can do to encourage supply chain resiliency moving forward.
“Small businesses throughout this crisis have demonstrated their resiliency---shifting product lines, moving to more e-commerce and utilizing different suppliers and distribution chains across a variety of industries,” said Rep. Schneider. “Some shifted to making PPE and hand sanitizer in a matter of days, and others came up with new and innovative ways to source their products. That is why we called this hearing today - to discuss, as we rebuild, potential solutions to establish more resilient supply chains so that we are better prepared for our next disaster and to also build a stronger domestic economy.”
“Effective management of supply chains has significant potential benefits for small enterprises but also leaves them vulnerable to disruptions,” said Dr. Eswar Prasad, Professor of Trade Policy, Cornell University. “This period of economic turmoil should lead to a re-evaluation of the resiliency of such supply chains and suitable restructuring of supply chains to reduce vulnerabilities. Small businesses can take a number of steps to promote such resiliency, but should receive the right kind of support from the government to facilitate this process.”
“Another challenge we had to deal with was significant product shortages and disruptions to the healthcare supply chain,” said Christine Fagnani, Co – Owner and Vice President of Lynn Medical Instrumentation Company in Wixom, MI. “Representing quality products is a pillar of our organization. As demand was in many cases three times the capacity from our traditional manufacturer partners, we found ourselves having to vet new sources.”
“Our supply chain was the problem. Our raw material in Asia wasn’t shipping, and no one was answering our inquiries,” said David Billstrom, CEO of Kitsbow Cycling Apparel in Old Fort, NC. “Our contract manufacturers in the U.S. started warning us of delays of finished product, as Apple struggled to make iPhones in China our apparel contractors in California struggled to make our clothes.”
“I hope this is a wake-up call to our business community and our federal policymakers to support policy that allows small businesses to survive and bounce back after a large-scale disruption like COVID-19,” said Rep. Schneider. “Doing so will allow our nation’s small businesses to successfully confront unforeseen circumstances and will be critical to building a strong domestic economy.”