The recent increases – and threat of increases – in tariffs are causing disruptions to today’s retail supply chains. According to a new report from BRP titled Tariffs, Terrorists & Tsunamis: Minimize the Impact of Supply Chain Disruptions with Agile Strategies, while tariffs are currently the hot topic, supply chains are vulnerable to many unexpected disruptions, including terrorism and natural disasters. Today, more than ever before, it is vital that retailers adopt an agile approach to the development and maintenance of their global supply chains. The need to have the right organization and processes in place to continuously review and adjust the flow of goods from supplier to customer is imperative. An agile capability means that retailers can rapidly and cost effectively adapt to external forces, while maintaining, or even enhancing, service to consumers.
Most retailers rely heavily on imported merchandise, and over the last two decades, retail supply chains have become more complex and increasing global in nature. Finished goods may be sourced from many locations, supported by raw material and packaging supply chains that extend even further. At the other end of the supply chain, consumers in an omni-channel environment may be located anywhere across the globe. As products cross international borders, there is the potential for costs to increase due to tariffs – recently a very hot topic.
“While tariffs are today’s area of focus, supply chains can be unexpectedly disrupted by the three T’s – tariffs, terrorists and tsunamis,” said Ken Morris, principal, BRP. “To combat these potential interruptions, smart retailers take an agile approach to the development and maintenance of their global supply chains and ensure they are able to rapidly react and respond.”
This report assesses the impact of tariffs and other disruptive forces on retailers’ global supply chains, and includes proactive steps retailers can take to build resilience into their global supply chains through the use of best practices in organization, processes, and systems.
The steps to taking an agile approach to global supply chains are:
- Energize the Product Lifecycle Management Process
- Gain Total Visibility into Global Trade Management
- Focus on How Well Transportation Spend is Being Optimized
- Develop a Dynamic Process Model of the Global Supply Chain
- Create a Rigorous Spend Analytics Capability