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Turn Tariff Turmoil into Supply Success: 5 Essential Moves for Brand Leaders

We get it. Managing Global Strategic Sourcing can be tricky during this Global Economic Trade War. With incremental tariffs on Chinese made products still evolving as negotiations unfold, staying ahead of changes is a daily challenge. The quality of raw materials, production efficiency, state-of-the-art innovation, and low labor cost advantages of Chinese factories are difficult to emulate elsewhere. Migrating to countries outside of China requires years of strategic partnership to identify, qualify and build supply chain expertise.

Success requires a proactive Strategy and Action Plan to navigate the ever-changing environment, as well as the capability to execute and sustain Global Strategic Sourcing best practices.

At Simpactful, we have built a team of practitioners from both the Brand and Retailer sides of the desk. This includes General Managers, Supply Chain experts and skilled Sourcing teams.

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Here Are 5 Steps to Navigating Effective Strategic Sourcing During the Global Economic Trade War:

1. Learn the Global Landscape to Inform a Working Strategy
  Identify the most important categories and products to your assortment. Do a deep dive on not only finished goods, but on components, parts, assembly, and more. Analyze your sales and profit dollars and the overall importance to your brand. Assess which products are already sourced outside of China, and if any of your assortment is Made in the USA. Identify predicted growth rates by country and understand the current duties, reciprocal tariffs, and any available tariff exemptions. Most importantly, ask these same questions about your competitors to begin understanding sources of competitive strength or weakness. Use this information to build a working strategy that can be used as a basis for iteration and scenario planning.

1. Diversify Your Supplier Portfolio
  Evaluate your current supplier portfolio and how the Trade War currently impacts your network. Be sure to ask what other countries manufacture your desired product assortment. Who are the qualified suppliers within those countries? Build a supplier matrix by capability, supply chain reliability, and potential opportunities for consolidating products to leverage logistics efficiencies – optimizing total end-to-end supply chain for best costs and service possible.

1. Leverage the Best of the Best for Short Term Sourcing
  Collaborate with strategic partners who are willing to work with you to share in the mitigation of tariff-induced cost increases. Success requires best-in-class FOB pricing, quality assurance, optimized logistics costs, and reliable on-time supply chain delivery. Flexible and decisive leadership is critical in a dynamic, first-come-first-served sourcing environment during the short-term tariff Trade War.

1. Build Strategic Alliances
  Establish strategic alliances to navigate not just the Trade War storm, but for long-term sourcing success. Investing in new factories and production capabilities – including sourcing raw materials, production technology, creating new molds, and hiring a talented workforce takes time and a deep investment in resources. Building strategic partnerships – both in the US and in other countries around the world – is paramount to building Strategic Global Sourcing capabilities for the future.

1. Execute with Excellence
  Once you have identified your new supplier portfolio and partnered to negotiate best cost value – commit to onboarding new vendors, finalizing item set-ups, providing collaborative forecasts, and writing efficient purchase orders. Maintain open and flexible communication, as with all start-ups there will be potential hurdles and issues to resolve. Invest in dedicated Sourcing Team Leaders with the authority to review and make quality decisions in an expedient time frame. Establish realistic goals, milestones, and a process to evaluate risk versus reward – ensuring decisions made achieve production and supply chain excellence.

Do You Need Help Navigating the Global Trade War with Excellence? Simpactful Can Help!
With over 25 years of global sourcing experience developing a portfolio of qualified factories around the world – including expertise in Southeast Asia – our teams can help you assess the landscape, define your portfolio strategy, develop sourcing strategies, run scenarios, model financial impacts and even support you through planning into execution. We are happy to roll up our sleeves, shorten your time from understanding to action, and put you in a position to win during the Global Trade War by providing quality and best value products for your customers. Contact Simpactful today at contact@simpactful.com or 925-234-6394 to build a smarter, more resilient strategic Global Sourcing strategy and plan.

Here Are 5 Steps to Navigating Effective Strategic Sourcing During the Global Economic Trade War:

1. Learn the Global Landscape to Inform a Working Strategy
  Identify the most important categories and products to your assortment. Do a deep dive on not only finished goods, but on components, parts, assembly, and more. Analyze your sales and profit dollars and the overall importance to your brand. Assess which products are already sourced outside of China, and if any of your assortment is Made in the USA. Identify predicted growth rates by country and understand the current duties, reciprocal tariffs, and any available tariff exemptions. Most importantly, ask these same questions about your competitors to begin understanding sources of competitive strength or weakness. Use this information to build a working strategy that can be used as a basis for iteration and scenario planning.

1. Diversify Your Supplier Portfolio
  Evaluate your current supplier portfolio and how the Trade War currently impacts your network. Be sure to ask what other countries manufacture your desired product assortment. Who are the qualified suppliers within those countries? Build a supplier matrix by capability, supply chain reliability, and potential opportunities for consolidating products to leverage logistics efficiencies – optimizing total end-to-end supply chain for best costs and service possible.

1. Leverage the Best of the Best for Short Term Sourcing
  Collaborate with strategic partners who are willing to work with you to share in the mitigation of tariff-induced cost increases. Success requires best-in-class FOB pricing, quality assurance, optimized logistics costs, and reliable on-time supply chain delivery. Flexible and decisive leadership is critical in a dynamic, first-come-first-served sourcing environment during the short-term tariff Trade War.

1. Build Strategic Alliances
  Establish strategic alliances to navigate not just the Trade War storm, but for long-term sourcing success. Investing in new factories and production capabilities – including sourcing raw materials, production technology, creating new molds, and hiring a talented workforce takes time and a deep investment in resources. Building strategic partnerships – both in the US and in other countries around the world – is paramount to building Strategic Global Sourcing capabilities for the future.

1. Execute with Excellence
  Once you have identified your new supplier portfolio and partnered to negotiate best cost value – commit to onboarding new vendors, finalizing item set-ups, providing collaborative forecasts, and writing efficient purchase orders. Maintain open and flexible communication, as with all start-ups there will be potential hurdles and issues to resolve. Invest in dedicated Sourcing Team Leaders with the authority to review and make quality decisions in an expedient time frame. Establish realistic goals, milestones, and a process to evaluate risk versus reward – ensuring decisions made achieve production and supply chain excellence.