How to De-Risk Your Supply Chain in Turbulent Times

1. Design for Adaptability (DfA):

Allow for easy substitution of components and materials through modular design. Implement flexible manufacturing processes to scale production up or down.

2. Reshoring or Nearshoring:

Move production closer to home to reduce exposure to geopolitical instability, tariffs, cyber threats, and transport delays.

3. Supply Chain Diversification:

Reduce dependency on a single source to minimize the impact of disruptions.

4. Just-in-Case (JIC):

Hold buffer inventory, excess capacity, or extra resources to ensure continuity in the face of disruptions.

5. Cost Optimization:

Renegotiate supply contracts to lock in prices and avoid sudden rate increases or seek lower-priced alternate parts.

6. Frontloading:

Import large volumes of goods ahead of anticipated tariff increases or trade policy changes.

7. First Sale:

Base the declared value of goods on the price paid by the middleman to the manufacturer, rather than the final sale to reduce tariff costs.

8. Tariff Engineering:

Design or modify products in a way that qualifies them for a lower tariff classification under the Harmonized Tariff Schedule (HTS).

9. FTZ (Foreign-Trade Zone) Utilization:

Use designated regions where imported goods can be stored, processed, or assembled without being subject to customs duties until they enter the domestic market.