Production costs are expected to continue to climb and most suppliers are unable to pass these costs on to their customers. Many face the dilemma of whether to shift more production out of China when there’s a chance a deal could be struck any day, making that decision a costly misstep. But the longer companies wait to make key decisions and fully adapt their supply chain, the more profit they will sacrifice if the tariffs remain in place longer than anticipated.
The USMCA presents another variable, particularly for the automotive industry. If ratified, North American auto suppliers are hopeful for increasing demand in the coming years as OEMs should be incentivized to source more parts domestically, but many will face a costly process to adapt their own supply chains to meet the provisions.
All of these economic uncertainties create a challenging environment for manufacturers overall. But could this dynamic create an opportunity in some industries by opening the door for a shakeup of the current market share hierarchy?
Those manufacturers who make the right choices at the right time can more effectively navigate the rising costs in the near-term, and better position themselves to capitalize on potentially greater demand in the future.
In this way it’s possible for some to turn the economic environment to their advantage and make a move toward the head of the pack. But given the overarching complexity, it’s important not to oversimplify your assessment.
It’s not just a question of if the tariffs will be lifted or not, and choosing the best path today based on your best judgement. It’s a question of many interrelated factors and decision points throughout your organization, each with its own associated risks, rewards, and probabilities. The more granular your analysis of all of these points is, the more you can put the odds in your favor to come out ahead.
Request a Predictive Risk Management Analysis to harness your operational data in a custom algorithm and contingency model to help you evaluate key strategic decisions, considering the individual risks, opportunities, probabilities, and interrelationships of all available paths. This gives you a valuable decision-making benchmark based on quantitative analysis integrating your company’s supply chain, production, and financial data.
|By leveraging predictive analytics and risk management together with supply chain optimization and process improvement, even high performing operations can achieve significant savings and profit enhancement.
Not only do we help you make more informed decisions to reduce costs and risk today, we give you a road map for when to stay the course and when to shift directions as the situation evolves going forward. Take advantage of this enhanced foresight to more effectively navigate the shifting economic landscape, offset rising costs, and outpace less agile competitors.
Request a Predictive Risk Management Analysis
- Gain a custom algorithm for evaluation of strategic decisions to navigate economic uncertainties, while quantifying the risks, rewards, and probabilities of each scenario
- Leverage your operational data ranging from supply chain, manufacturing, and procurement without adding any sensors
- Identify opportunities to utilize predictive analytics for improvements in supply chain optimization, production efficiency, energy reduction, and maintenance
- Develop a contingency plan for alternative sourcing of materials to navigate tariffs, to meet rules of origin and wage provisions of the USMCA, and other scenarios
- Tactically mitigate the financial impact of factors like recession, tariffs, and trade deals