want some assurance that they won’t be blindsided by a drastic shift in tariff policies. Once businesses gain some certainty, reshoring and multishoring could accelerate, Anderson says. Many manufacturers have made signi cant investments in their current infrastructure. “It’s not easy to unwind an existing supply chain and nd new suppliers, especially if you’ve built a relationship with your suppliers,” says David Isaacson, vice president, product marketing, with ETQ. Over time, manufacturers will adjust their operations, but for the next few years, it will be about making existing facilities and employees more ef cient and effective. The preference of many customers to purchase locally made products may also prompt companies to maintain operations in multiple countries. It’s one reason Lenovo has 30-plus factories globally. Locating plants near customers also cuts transportation and lead times. The goal is to be “globally powerful but locally ingrained,” Tease says. Reshored supply chains also need to make nancial sense. “If you make the shift and it’s not cost ef cient, you’re at a disadvantage,” Javor says. The goal is a “right shore approach,” typically with a mix of strategies, he says. Supply chain organizations need to identify the setup that will provide the most agility and resiliency regardless of where the next shock originates from. 3 Resilience, Visibility, and Scenario Planning The importance of resilience has become a signi cant trend, given the external shocks hitting supply chains. Companies looking to boost resilience can start by understanding and mitigating their exposure to risk. Scenario planning can help them identify single points of failure in their supply chains and assess exposure to them. Then they can determine, for instance, the havoc that would result if X, Y, or Z went wrong. Along with defensive moves such as risk mitigation, supply chain
Global technology company Lenovo designs its products with circularity in mind from the start, ensuring they can be recycled and reused at the end of their life cycle. This approach strengthens supply chain resilience and attracts sustainability-focused customers.
organizations can play offense by identifying ways to take advantage of competitors that are exposed to the same risks. Say a company has a strategic partnership with the lowest-cost provider of a speci c raw material. It can identify ways to use its position to improve its performance, Javor says. Scenario planning, a building block for resilience, should include projecting not only changes in sales, but the organization’s plan of action, Walton says. If sales jump or drop by 25%, how should the organization adjust? Will it need to institute layoffs or boost hiring? Should it increase automation? Prompt cash collections are another critical element of resilience. The reason? They allow an organization greater exibility, Walton says. A diverse base of suppliers is also a resilience building block. “This allows companies to shift to alternate suppliers quickly if disruptions occur,” Tancredi says. Organizations that have visibility several tiers into their supply chains can often see when operations are about to go awry and then can proactively adjust, Anderson says. Often, the actions they need to take early on are relatively less expensive than
the steps required if the organization has to wait to act until an issue becomes more visible and urgent. 4 Circular Supply Chains Somewhat surprisingly, operating with the environment in mind can, in some cases, actually boost resilience. Approximately 60% of respondents to a recent survey by Kestria, a global alliance of executive search rms, say sustainable production practices make either a moderate or signi cant contribution to their organizations’ competitive advantage. Lenovo is designing products so they can be recycled at the end of their lives, Tease says. “We make sure we’ve got a circular supply chain in mind from the very start when we begin designing the product,” he says. This boosts resilience in several ways. In many parts of the world, companies are looking to work with organizations that have a strong mandate for sustainability, he adds. A circular supply chain can attract customers. Plus, using recycled materials helps to diversify a company’s supplier base. The cost to recycle steel or aluminum is often a fraction of the cost to access
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