Tariff-Proofing: 5 Ways to Gain Supply Chain Resilience in an Uncertain World

Posted by Vijay Natarajan on May 28, 2019 9:02:42 AM

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Tariffs, Brexit, and the issue of uncertainty are rampant in the news and have become hot topics for management and round table conferences. It’s increasingly clear that ‘easy fixes’ like stockpiling merchandise before a hike deadline or seeking exclusion options are impractical. They’re also not viable, long-term solutions for businesses that want to do more than just survive each disruption.

Visibility is often touted as the number one solution to the various, looming international trade policy changes – i.e. US-China punitive tariffs, the UK’s torturous divorce from the European Union, NAFTA/USMCA. But though it’s invaluable to see the highest areas of impact, it’s not a panacea.

Visibility alone is passive, and easy fixes are one-offs in an ever-changing landscape. If you want to truly master this new, global domain and stay ahead of the competition, here are five vital steps you can take to boost your supply chain resilience.

How to Forge a Natively Flexible & Agile Supply Chain

1. Digitize

Whether you’re seeking alternate markets and suppliers or negotiating vendor rates, a digitized supply chain will empower you to quickly configure new flows, enable dynamic planning and execution, and easily integrate third party systems. Immediate connectivity and communication also afford you the necessary bandwidth to focus on strategy and stay competitive.

Moreover, automating processes greatly mitigates setbacks by minimizing down time and revenue loss, as well as maximizing profitability, competitiveness, and service levels for each order. Digitization also ensures you and your partners are using one version of the truth – which is vital to effective collaboration and decision-making.

2. Build Dynamic Networks

supply-chain-resilience-networkYou want to be able to nimbly switch between partnerships. If a tariff is removed, buyers may want to switch back to their original suppliers. And, during times of disruption, suppliers may need to court new potential buyers, just as sellers seek out new markets or products, rather than shift inventory and work through subsidiaries. While you can’t control the conditions that force you to shift, you can at least minimize the transitional downtime exacerbated by proprietary adjustments to ERPs and WMSs.

A natively, “networkable” or network-centric system facilitates an unlimited number of potential connections that businesses add immediately through simply entry. This way, if you have to switch partnerships, you can seamlessly choose the most cost-effective option by entering all criteria- and constraint-related data.

3. Leverage a Global TMS That Facilitates Collaboration

To reduce complexities during uncertain times and operationalize new ventures as seamlessly as possible, you should prepare for all eventualities. If the country or market you rely on changes, a multi-leg, multi-modal, global TMS solution ensures you can immediately adapt to any new form of cross-border fulfillment. A natively global system should support all the details and variables that factor into new regions, like currencies, languages, and modes of transport.

Transportation management can be a highly collaborative process involving many players – from shippers to carriers to brokers. Legacy TMSs tend to rely on enterprise-centric software which limits companies’ abilities to effectively communicate their needs, streamline processes, and visualize the impacts of issues and delays across the supply chain network. When disruptions arise, a network- and order-centric TMS offers the necessary transparency and enables corrective action within the application.

4. Employ Intelligent Analytics

Once supply chain managers begin operating the new flows, total costs, like freight, logistics, and duties, will come under scrutiny. In fact, according to Barron’s analysis, tariffs have made supply chains a topic of interest for investors. Businesses will be under pressure to capture, measure, and monitor these figures to assess impact. The system you have should be robust enough to handle this new complexity and articulate a comprehensive cost-to-serve picture. This goes back to the need for digitization, as intelligent analytics and reporting help businesses to continuously improve and adapt in an unstable world.

5. Embrace a Fluid Identity.

supply-chain-resilience-businessWhatever your business model is today, opportunities may arise that inspire you to assume new roles and capabilities – from spare parts management to reverse logistics to e-commerce. Supply chain resilience often rests on how well you can and are willing to embrace a fluid identity. Companies are shifting markets and offerings with greater frequency, whether through mergers and acquisitions or rebranding, and require solutions that enable immediate synergy and optimization in whatever area or joint ventures they choose.

Systems without industry constraints, that aren’t branch-, region-, or sector-specific, allow businesses to easily scale and adopt new capabilities, customizing and configuring only those they require now, with the option to activate other essential capabilities if and when needed.

 

Uncertainty begets uncertainty – as the great atomic physicist Neils Bohr put it: “Prediction is difficult, especially if it is about the future.” However, with the right tools, disruptions become opportunities, not setbacks. Flexibility, automation, and dynamism give businesses the freedom to innovate during times of change, remodeling their networks and optimizing flows to maintain customer service, minimize risk, and gain competitive advantage.

Because the only thing holding you back – in good times or bad – should be your imagination, not your technology.

 

Topics: Transport Management Systems, Supply Chain Collaboration, Supply Chain Analytics, Multi-Enterprise Business Networks, Supply Chain Agility, Digital Transformation, Disruption

 

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