Volatile Tariffs Cause Supply Chains Headaches
Recent political uncertainty and volatility in global trading, specifically the Trump administration's rapidly changing tariffs, have spotlighted global supply chains. How fast can your supply chain react? The current pace of policy U-turns and brinkmanship makes it clear that businesses must move faster than the disruption.
There are numerous mitigations, including alternative and diversified sourcing arrangements, as well as third-party or near-shore manufacturing. Among the risks are issues over subjective “rules of origin” or, in other words, the “economic nationality" of goods, which refers to where they are considered to have been produced or manufactured, rather than where they are shipped from. If these mitigations cannot be evaluated and implemented quickly, they risk being applied too late or being counterproductive.
George Riddell, Managing Director of Goyder trade consultancy, pinpointed where the issues lie in a recent article in the Financial Times: “It depends on how good their [businesses] supply chain software is and if that data has been updated in real-time.” Supply chain IT systems and data must be up-to-date, fast-acting, agile, and flexible. Traditional batch or API-based approaches often don't provide this agility and flexibility. Businesses that have adopted an event-driven integration strategy can simulate the impact of policy changes and support supply chain adjustments as soon as they are needed.
Intelligent meshes of multiple AI Models and Agents adjust sourcing, logistics, and compliance strategies in real-time, without disrupting core systems – never too late and never counterproductive.
Is Your Supply Chain IT Adaptive?
So, the question remains: can your supply chain IT support an adaptive supply chain?”
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Think wide: Integrate all the applications, business processes, and partners into your supply chain.
“Need to know where your shipment is and whether it will be delayed? Utilize vessel tracking partners such as FourKites, Marine Traffic, or aviation data from the FAA's SWIM. Need to know if the right people will be in place? Ensure your people management systems, such as Workday or BambooHR, provide up-to-date information. Link production and warehousing updates from your ERP, such as SAP ECC or HANA, to your Transportation Management solution, like Oracle OTM. Ensure factories are connected and integrated into this "digital nervous system," so it can do so if production and warehousing need to change quickly.”
2. Eyes everywhere: Ensure your integration and application environment provides the agility to respond quickly to changing circumstances.
“You may need to adopt new business processes quickly. You may need to onboard new partners or geographies in days or hours. You may need to integrate new systems and services just as fast.
“Point-to-point or batch-based integrations are unlikely to provide you with this flexibility. You don't know if future applications you'll need to adopt will be a cloud-based SaaS, a custom-developed microservice, or an edge-based factory floor or warehouse application. Make sure you can connect to any of these seamlessly and share updates between them in a structured, filtered way using an Event Mesh.”
3. Be ready, never late. The speed of change is likely to increase, so adapt business processes as changes occur.
“Batch and ETL won't cut it, even data lake analytics solutions may be too slow. It's no good scheduling a change to a production run tomorrow if it misses that last shipping window. Event-driven integration gives you the agility to change your IT landscape while processing the business events that must be reacted to while they happen.”
4. What if? Digital twins will play an increasing role in supply chains.
“What if I move my production of my super widget to Mexico, Poland or Vietnam? What if I get my packaging from Spain and not Brazil? What if I procure my legal services in Canada and not the USA? What are the costs, tariffs, geographic and political implications? How can these be modeled, and what are the spreads of the risks?
“To fully simulate this, and bring AI to bear, you need to have accurate modeling, fed by an up-to-date view of the business. Only by integrating the business views from all the relevant systems, as it happens, can this degree of modeling be done.”
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Finger on the button: Dashboards and visualizations become increasingly important.
“Management teams need to understand what changes impact the business, their scope, and the likely effects of any mitigation strategies. These dashboards need up-to-date views of the business, fed by changes as they happen.”
About the Author
Tom Fairbairn
Distinguished Engineer at Solace
Tom Fairbairn is an experienced Systems Architect and Distinguished Engineer at Solace. He specializes in helping customers across a wide range of industries design, architect, and deploy event-driven integration solutions. Tom holds a Master of Science degree in Electrical Engineering from the University of Southampton.