For business leaders, geopolitical uncertainty isn’t new, but it is speeding up. Tariffs, trade wars, and supply chain disruptions are affecting costs, timelines, and operations across industries. What businesses do in the next 90 days is crucial for managing risks and finding competitive advantages amid uncertainty.
Let’s unpack the details of how to turn uncertainty into a strategy for resilience.
Uncovering what you can’t see: the upstream risk
Most businesses know their direct suppliers, but few know who their suppliers’ suppliers are. Even fewer understand how these upstream relationships can lead to tariff-related costs or operational risks.
Risk exposure goes beyond tier 1 vendors. It extends up the supply chain and often lacks clear visibility for business leaders. Here are a few things to consider as you begin:
- Could an important part of your product or service be delayed because of overseas tariffs?
- Are your suppliers passing on costs without you knowing where they come from?
- Could a disruption far away cause downtime in your operations?
Seeing upstream is your first line of defense. Knowing where your raw materials and key components come from is essential for managing disruptions in your operations.
Step 1: Assess and map supply chain risks
In the next 90 days, focus on a complete supply chain mapping exercise. This includes:
- Identifying all your suppliers and their suppliers.
- Estimating the potential cost impacts of new or changing tariffs.
- Assessing dependencies and single points of failure.
- Modeling various “what if” scenarios, like port delays, price changes, and other geopolitical events.
By visualizing your entire supply chain, you can take proactive steps instead of being caught off guard by sudden cost increases or shipment delays. By analyzing and mapping your unique supply chain, you can shift from reactive thinking to informed decision-making, helping you protect against risk. Identifying potential weak points in your operations can help you stay ahead of any geopolitical instability that could cost you.
Step 2: Run scenario planning and reevaluate partnerships
Use risk assessment insights to kick off your scenario planning:
- Who in your supply chain is too vulnerable to risk?
- Who could be replaced, restructured, or secured with stronger agreements?
- Are there domestic alternatives worth considering for key materials?
At the same time, check your insurance coverage:
- Does your policy cover trade disruptions, business interruptions, or supplier insolvency?
- Are there exclusions related to international trade or tariffs?
Every supply chain decision comes with risks. Adding a new vendor could bring cybersecurity, reputational, or compliance challenges. Work closely with your broker to understand the full impact of each change.
Step 3: Prepare for inevitable disruption
You might feel stable and secure right now, but disruptions can happen quickly. Whether it’s a sudden tariff or a ripple effect from international policy, every business should expect some level of impact ahead.
Prepare your organization by:
- Checking that your business interruption coverage is up to date and relevant.
- Creating a communication plan for employees if operations are affected.
- Developing a playbook for managing supply chain slowdowns or cost changes.
Resilience isn’t about being untouchable; it’s about responding quickly with confidence and clarity.
Tariffs are more than just a cost issue; they test your business’s operational agility. What you do in the next 90 days can help protect your bottom line and help you stay focused on long-term success, no matter what happens today. The best business leaders will use this time of uncertainty to strengthen their supply chains, develop smarter risk strategies, and build more resilient organizations.
Our MMA consultants are here to assist you in understanding and managing your business risks. We’ll collaborate with you to assess supply chain vulnerabilities, review your insurance coverage for potential gaps, and explore strategies to mitigate risks through effective planning and protection.
