Anyone operating a business in today’s environment is facing a horizon with a lot of uncertainty – economically and geopolitically.  Manufacturing in particular has been met with the shift in perception over the United States’ reliability as a stable and predictable trading partner. This growing concern is prompting companies, both domestically and internationally, to reevaluate their operational decisions.

While the noise, the news, and the nexus of changes and challenges can feel both heavy and volatile at times, the most resilient businesses share one commonality: proactive leadership and transparency.

“The worst thing you can do right now for your business is to stand still while waiting for things to come to a head,” says Bryce Gibbs, lead food and beverage manufacturing advisor at Pinion. “It’s important to focus efforts on the things you can control within and around your supply chain and make them happen.”

The Value of Action Over Inaction

During times of uncertainty and instability, one of the most prominent traits of long-term successful operations are those who value action over inaction. The combination of keeping a motivated, proactive mindset can better position a business for risk management during volatile times and prepare the business to grab opportunities when they’re presented.

Pinion advisors have created a list of proactive business practices for manufacturers to act upon right now.

3 Steps to Build Supply Chain Resilience

  1. Review contracts. The normal ‘status quo’ of automatic renewals on contracts could be a costly mistake. Evolving market conditions, economic shifts, and geopolitical events can create risk and inefficiencies. Contract reviews can unearth both problems and opportunities. In addition, re-negotiating contracts often makes supply chains more resilient and adaptive to unforeseen business needs and changes.
  2. Communicate expectations on potential price changes or adjustments. Proactive communication is especially important during periods of market volatility. Engage in conversation with customers and be transparent about pass-through pricing that is the result of increased manufacturing costs due to tariffs. Transparency provides customers with clear information and understanding on how pricing decisions are made during fluctuations, ultimately reducing their anxiety and allowing them to navigate price changes.
  3. Be proactive with vendors. Reevaluate your vendor network and determine if alternative sourcing is better for your bottom line. Consider diversifying sourcing from a few different vendors to hedge against potential supply chain disruption.

“There’s a lot of value in ‘being prepared’ over ‘being right’ as it relates to direction around increased costs, prices, and challenges,” says Derek Wagoner, manufacturing advisor at Pinion. “With proactive actions around what you can control, you can reduce the risks to your operation and protect your emotional well-being.”

Now, more than ever, businesses should consider risk-adjusted strategies around manufacturing locations, sourcing channels, pricing models, cost-cutting measures, and growth opportunities. The implications of this are vast and ongoing.

Reach out to a Pinion manufacturing advisor to discuss best practices for your supply chain or financial operations, as well as risk-adjusted strategies.