Tariffs Are Unpredictable – Your Supply Chain Response Doesn’t Have to Be

Uncertain global trade and tariff policies are causing supply chain disruptions and sourcing dilemmas, ultimately driving up costs. In a volatile and unpredictable market, businesses must rely on fast and accurate decisions to pivot quickly. But they may not have the visibility to do it. 

The typical company has 3,000 suppliers for every $1 billion in spend. One analysis by the business advisory firm RSMUS found that the supply chains of the 50 largest firms by revenue in the S&P 500 Index were nine times more complex than they were in 2009. Meanwhile, global companies often have multiple ERP systems in place to track suppliers. 

For each component, a determination must be made regarding whether it is subject to tariffs and what those tariffs are. Based on this, actions can be defined such as the availability of alternative suppliers, or the passing on of the incurring cost onto the buyer, be it a company or consumer.

The cost of goods can change at a moment’s notice, and companies must be prepared for how this can impact their daily operations and be able to adjust accordingly, often at a moment’s notice. This forces companies to build ways and capabilities to sense and respond to changes quickly and accurately.

How Things Really Work

Making the necessary determinations at speed and scale requires more than just intuition; it demands a clear understanding of how procurement and supply chain processes actually operate day-to-day.

Artificial intelligence can help, but AI must have the right data and context to be effective. Raw data from disparate ERPs or spreadsheets lacks the crucial process context, such as how steps connect, where variations occur, and what dependencies exist—leading to slow responses based on incomplete insights.

Think about how much easier it is to navigate when using a GPS compared to a physical map—you know how everything’s connected, and you even have additional context about things like road closures or car accidents. Many companies struggle with embedding AI into how their business runs and yielding the results they need. When AI is given the correct information and context, it can make smarter and more accurate decisions. This is particularly crucial when it comes to effective supply chain operations as tariffs and policies change (nearly) daily.

Process intelligence bridges this gap by automatically discovering and mapping these end-to-end operational flows, essentially translating raw data into a structured narrative that AI can understand and act upon.

By creating a digital twin of a company’s business operations, process intelligence technology connects business data across systems so that AI can understand how the business runs and can effectively automate key tasks. It can connect raw data from disparate sources, identifying where variations occur, and what dependencies exist. 

With this data-driven understanding of actual workflows, companies are better equipped to handle market volatility, like we are seeing today with tariffs. They can more readily identify which specific components, suppliers, or routes are exposed to new tariffs because they are able to look at individual goods and processes via the use of digital twins. Digital twins also help to pinpoint where materials are lacking readily available alternative suppliers within the existing operational structure. 

Furthermore, businesses can use the underlying process model to simulate potential changes, such as switching suppliers, allowing them to assess the likely impact on costs and logistics before making that switch. This capability extends to estimating the additional costs that tariffs might impose on critical materials or routes.

Managing Complex Tradeoffs 

While the need for supply chain agility is not new, the current tariff environment has amplified the importance of visibility for business continuity and competitiveness. The inability to rapidly assess and adapt to shocks, whether stemming from tariffs or pandemics, poses a direct threat to operational stability and market share.

It’s no surprise that 70% of senior supply chain leaders surveyed for the 2025 Process Optimization Report – Supply Chains Edition said that they are relying on newer types of supply chain visibility tools to mitigate supply chain risk. 

Ultimately, tariff management involves a series of complex tradeoffs. Making the necessary adjustments is rarely simple, but businesses must be proactive. Companies that can adopt the processes and techniques that make these decisions easier and faster will gain a competitive advantage by making essential changes more manageable.