How to Tariff-Proof a Global Supply Chain in an Age of Uncertainty

The recent tariff increases on raw materials like steel and aluminum have sent ripples of uncertainty through countless industries and markets around the world. This has left many companies uncertain about the stability of their global supply chains. After all, when tariffs on hundreds of billions of dollars worth of goods can change overnight, freight costs can spike, margins can shrink, and an already complex supply chain can become even more snarled.

This recent “trade crisis” is nothing new. But shortages in commodities markets and rising global tensions have led to an increase in tariffs, with more expected in the future.

Global supply chains are increasingly vulnerable to shifting regulations and tighter trade borders. Now more than ever, companies need to adopt dynamic supply chain strategies to stay competitive in the constantly shifting landscape of international shipping and logistics.

Here are a few strategies for tariff-proofing a global supply chain and locking down costs, no matter what the changing regulations might bring.

Identify alternative suppliers and materials early

Tariffs most directly impact the raw materials in a production line. Companies can address potential cost increases at the source by increasing visibility along the entire supply chain.

Building an end-to-end map of existing suppliers, competing suppliers, and even alternative materials for items in the supply chain is one of the most effective ways to avoid tariff-induced friction. This comprehensive database gives supply chain managers and procurement departments a vital resource they can turn to when crucial elements in the production line become unavailable or financially infeasible, thus limiting the potential for delays.

Tracking and updating supplier data can be complicated. Luckily, auditing the supply chain isn’t as difficult as it used to be thanks to modern automation tools and real-time freight management systems.

Create a predictive supply chain

No one can predict tariffs 100% of the time. However, automation tools and an intelligent approach to supply chain management can help companies gain insight into every stage of their supply chains. This empowers them to make strategic, long-term decisions based on real data and trends—rather than knee jerk reactions.

Setting limits within a freight management system that trigger automatic alerts can also help companies ensure a speedy response to supply chain disruptions. Armed with a list of potential back-up suppliers, this proactive approach to identifying rising costs can allow companies to act faster and smarter than their competitors.

Assess current risk exposure

In order to prepare for the worst, it’s important to understand where the biggest risks lie. That requires data, and a lot of it.

Leveraging a large network of data on the end-to-end supply chain can provide a clearer picture of risks, costs, and potential countermeasures—particularly when a new tariff exposes supply chain vulnerabilities. The more data supply chain managers have access to, the more insights they can gain into trends and inefficiencies within their supply chain. These insights may even help them take preventative actions.

Performing a comprehensive risk assessment can help companies protect themselves against potential costs and vulnerabilities with strategic long-term financial planning. Risk assessment also holds procurement teams accountable for building better margins into both existing supplier relationships and alternative supplier networks, helping companies weather the potential cost of tariff disruptions.

A supply chain that’s ready for anything

Don’t get caught off guard by rising tariff costs. Leverage real-time tracking tools and predictive data to brace the supply chain for the impact of tariffs—and keep costs down.

At CTSI-Global, we help companies tariff-proof their supply chains with smart tools, professional support, and industry-leading insight. Build a more resilient supply chain by contacting us today.

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