Beyond Trade Wars, the Real Reason You Need to Reinvent Your Supply Chain

The US-China trade dispute has been a wake-up call in boardrooms around the world. As companies scramble to avert short-term cost pressures from a trade war, many are now considering a bigger opportunity - the chance to redesign their supply chains for the future. Building a more flexible operations network can help companies adapt to rapidly shifting customer expectations and protect against future geopolitical risk.

The impact of tariffs is a serious concern, of course - some $70 billion in added cost for Chinese imports to the US and $20 billion in higher costs for US imports to China. Electronics products account for a quarter of the goods affected by tariffs, and industrial manufacturers make up 20%. A recent Bain survey shows 60% of US multinationals with suppliers or operations in China expect a negative impact from tariffs. Of those, nearly 40% anticipate a cost increase of more than 5%, and another 40% expect a rise of 3% to 4%. Importantly, 50% of all respondents said a more flexible supply chain could have helped mitigate the impact of the tariffs

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