In a world of constantly changing tariffs, supply chain executives are trying to adapt as quickly as possible. A survey conducted by Bain & Company found that 75% of executives are juggling at least six competing supply chain priorities.
When asked what steps they are taking to adjust supply chains to mitigate tariff-related risks they replied as follows:
Diversifying supply chain locations -- 71%
Expanding supplier base/management -- 61%
Considering price increases -- 57%
Reshoring or nearshoring production -- 45%
Exploring alternative product design -- 33%
Exploring alternative product/services/markets -- 30%
Advocating with policymakers for trade priorities -- 28%
Investing in trade risk management tech -- 28%
Advocating with regulators -- 24%
Stockpiling inventory/materials -- 22%
In an article from Bain & Company, discussing the survey the authors point out that they have seen leaders focus on three overarching principles. (excerpted below)
Start by thinking without constraints. Leading companies are redesigning their supply chains by working backward from the ideal future state. They’re not getting bogged down by incremental fixes, and they’re not balking at taking big swings.
Solve the operations equation as a multivariate system. The solution won’t come from running a single algorithm or fixing one variable in isolation. In fact, that’s been the failing pattern since Covid: Management teams have tended to react to the latest shock, only to encounter a new shock in a few months.
Emerging leaders recognize the supply chain must be managed as a complex, multivariate system, while understanding all the interdependencies. Decisions hinge on strategic trade-offs unique to each company’s long-term goals. Certain structural designs will make the trade-offs more manageable.
Upskill talent, upgrade digital tools, and update management systems. Emerging leaders are upgrading and training operations teams to be more strategic, as well as more innovative, in their use of digital tools. They’re also making sure they have the data necessary to make strategic choices.
