Every day there is more news about international trade. It can be quite a challenge to make the best decisions for your supply chain without knowing how the environment may change. Not only do you have to consider the potential impact on costs, but also the effects on the performance of your global supply chain. Are you losing sleep over how tariffs might throw a wrench into your cross-border operations? Let’s explore what the impact could be and examine some possible solutions.
Supply chains today are interdependent on multiple networks of suppliers and consumers. New tariffs cause changes in production locations, sourcing, and logistics, resulting in disruptions all along the supply chain. As suppliers in certain countries lose customers, their production and logistics costs increase, and their competitiveness decreases against other regional suppliers.
Logistics can also cause supply chain disruption because of the lack of capacity and capability. As production locations move to other countries, companies should understand logistics challenges and make sure there is capacity and capability to move products efficiently and on time.
When you hear about tariffs, the first thing that comes to mind are the costs. Costs on raw material, finished goods, and transportation will be impacted. There are also moving costs that may be passed along if companies affected by the implementation of hefty tariffs are forced to relocate their factories or distribution centers.
How much will costs increase for the materials or components that make up your supply chain? Having a detailed view of your end-to-end costs by product and customer is critical to understanding the true impact on your business.
Navigating the Challenges
International trade issues are pushing manufacturers and their clients to rethink their complex and extensive supply chains. As companies evaluate their supply chains for alternate suppliers, production locations, warehousing, and transportation options, supply chain modeling is a powerful tool.
Advanced supply chain modeling can help you better optimize supply chain costs, services, and risks, accounting for all the implications of possible tariffs. It also enables you to conduct more detailed contingency and scenario planning, both of which are essential long and short-term decision-making tools.
End-to-end supply chain visibility is another important line of defense against any logistics challenges brought on by tariffs. Businesses that have more visibility into their supply chain can react to changes quickly and reduce harmful effects.
Proudfoot can pinpoint the costs and risks at every facet of your supply chain and leverage advanced modeling to help you navigate them.
Not only do we implement systems and tools to give you better supply chain visibility, we also use our #HeadsUP behavior model that drives sustainable improvement in performance. Through our unique process of Humanizing, Optimizing, and Digitizing, we enable your people to make more cost-efficient decisions and deliver better results at a lower cost.
Contact Proudfoot today to discuss ways to minimize costs and risks associated with international trade and enable your global supply chain to become resilient in the face of these challenges.