With tariffs being a very hot topic this week – and a new change announced just hours before the start of our panel discussion – the timing couldn’t have been better to dive into today’s supply chain challenges and trends. Our industry experts shared the latest on how to achieve both flexible and resilient supply chains. 

Key Takeaways: 

-              We live in unprecedented times where the past won’t necessarily prepare your company for future disruptions 

-              Businesses need to develop adaptable “wargame” plans that prepare them for nearly any kind of crisis 

-              Contract flexibility is important and allows businesses to stay nimble and flexible

-              Know your supply chain end-to-end. Understanding both suppliers and their sources is crucial. Equally important is understanding potential consumer behavior and shifts

-              Appreciate the ‘boring’ jobs. Import/Export desks and compliance officers do jobs that are often overlooked but are vital to the success of a company. Their work ensures raw ingredients and/or goods cross international borders smoothly

Tariff Update 

David Forgue likened the current tariff environment to his ‘Super Bowl moment’. Forgue, Partner at Barnes, Richardson & Colburn recalled the first Trump administration’s tariff policies. When tariffs were first imposed, businesses relocated operations from China to Vietnam, the Philippines, or Mexico. All of these are countries that are currently facing a new round of tariffs. While tariffs were intended to bring manufacturing back to the U.S., they often target critical materials necessary to realize these shifts (e.g. building supplies for factories), complicating the effort.  

The panel members agreed the threat of imposing tariffs is likely being used as leverage in negotiations. What the panelists expected is that - with the 90 days pause – some trade deals will be made. Additionally, the looming tariffs can lead to renegotiation of existing trade deals such as the USMCA. And lastly, there might be options for exclusions that favor certain companies. 

Simon Clarke, Managing Partner at Argon & Co noted that looming tariffs create uncertainty, having a dampening effect on conversations and planning. However, he highlighted a silver lining: tariffs force businesses to take a closer look at their supply chains and as a part of that, scrutinize imports and exports more carefully. 

Preparing for Supply Chain Challenges 

Beyond tariffs, businesses must prepare for all kinds of disruptions. Clarke emphasized instead of trying to predict the next crisis – whether it is a pandemic or a blockage in the Suez Canal– companies should focus on results-driven planning. Referring to ‘Black Swans’, a theory developed by Nassim Taleb, businesses should build “wargame” plans that prepare them for all kinds of crises, even the improbable. 

Geoff Shive, Advisor at Demand Chain AI, stressed the importance of fully mapping the supply chain and looking beyond direct suppliers and investigate where the middleman gets his raw materials, because they might be sourcing from the same source. Diversifying suppliers is an important strategy to mitigate risks. 

Flexibility is Key 

Randy Bridgeman, Corporate M&A Attorney at Perkins Coie, highlighted the legal side of resilience: maintain a degree of flexibility in contracts. He emphasized, in times of these “seismic events”, businesses need to be able to respond to issues and that nimbleness needs to be reflected in contracts. Locking in long-term deals at the best price might seem smart, but the focus on cost over flexibility could cost a company agility when crises hit. 

Shive supported this and pointed at another aspect in the supply chain where nimbleness is important, i.e. the co-packers/co-manufactures. Businesses should avoid relying too heavily on a single partner and instead spread their risks across multiple parties. 

Conclusion 

In today’s volatile environment, resilience is not about predicting the next crisis – it’s about preparing for anything and scenario planning to be ready to execute when needed. Businesses must stay flexible, understand their supply chains inside and out, and embed that flexibility into every layer of their operations. Those who do will not only survive but come out stronger when disruptions inevitably strike.