During a May 7 webinar, our group of manufacturing brands, which includes Smart Industry, took on how manufacturers can survive and even thrive in the Trump tariff economy. "Uncertainty is the new certainty" was the theme. A focus of that program was supply chains and making them resilient in case overseas sources of materials become a lot more difficult to obtain and/or turn out to be prohibitively expensive.
Upcoming webinar: Bringing Manufacturing Back to the U.S., What Will it Cost?
Following on that conversation, this episode of our popular Great Question podcast hosted two supply chain experts, Darrell Edwards, a University of Tennessee System supply chain professor and a former chief supply chain officer and chief operating officer at La-Z-Boy Inc., and Ji Li, a supply chain adviser for J&J Investment and Consulting and a former supply chain director for Boeing. The pair of experts did a deep dive with Laura Putre, senior editor at our sister brand IndustryWeek, on how businesses can navigate supply chain challenges amid shifting policies from Washington.
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Edwards has more than 30 years of global operations and supply chain experience and has consistently driven impactful results in the consumer products sector. Li draws on more than 20 years of experience in the aerospace, medical, and technology sectors and leads transformative supply chain strategies that fuel profitable growth, even amid global materials challenges.
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Below is an excerpt from this podcast:
Laura Putre: Let's start with you, Ji. We're seeing manufacturing companies pivoting around their supply chains to deal with uncertainty. Have you seen any good practices, as well as maybe some misguided approaches?
Ji Li: Yeah. Laura, what I've seen, I would say in the last few years—particularly from large companies—is that they've been working on diversification. I think Gartner had a survey, and it’s an interesting point. What they found was that those big companies stated 50% of them had executed the so-called China Plus One strategy by 2022, and then 80% of them had executed the China Plus One strategy by 2024.
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So what this tells you is that companies have been working on diversification for quite some time, and certainly, those who chose to do that earlier are in a much better position today with all the trade war and uncertainties.
However, the smaller and medium-sized companies, I think due to various reasons, haven’t quite gotten there yet. So they’ve been struggling more. They’ve reacted in a very tactical way—building up inventory, holding shipments, or finding some kind of interim mitigation method.
So I would say the good practice I’m seeing is really about diversification.
What is your company doing about cybersecurity?
LP: Darrell, do you have anything to add to that? What are you seeing as far as good practices?
Darrell Edwards: You know, I think you did a really nice job summarizing what I’ve seen as well. I tend to think in terms of multiples—multiple geographies, multiple suppliers. I think we learned a lot through COVID. That was kind of the beginning of really framing or redesigning our global supply network from a manufacturing perspective.
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We saw a lot of companies looking at redesigning—moving certain supply bases from one geography to multiple geographies, making sure they were not single-sourced in certain commodities or inputs, and ensuring they were at least dual-sourced, sometimes triple-sourced. So diversification, as Ji said, is really a good strategy.
I also see some companies looking at strategic inventory reserves for key commodities to minimize disruption. On more standard commodities, those are typically multi-sourced and approached more from a cost perspective than a strategic one.
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Additionally, after COVID—and I continue to see this—companies are increasing their visibility through technology. It seems that the companies with the best information and greater visibility are able to make quicker, more intelligent decisions.
So, you know, it’s a mix of all that. There’s not a one-size-fits-all—it depends on the sector, area, geography, and company size, as you said. But some blend of those things helps companies mitigate risks when it comes to disruption.
