How technology can help mitigate the effects of tariffs

Tariffs, or taxes imposed on imported goods, have been making headlines worldwide. While tariffs can significantly affect a company’s cost structure, competitiveness and overall supply chain dynamics, modern technology is a powerful tool to help organisations manage and even mitigate these challenges.

As businesses navigate this evolving landscape, software can minimise the financial burden of tariffs while simultaneously improving supply chain efficiency and resilience.

A strategic response

One of the most effective strategies organisations can use to reduce the impact is sourcing more from local suppliers. By decreasing reliance on international suppliers, organisations can reduce or even eliminate tariff-related issues. In addition to lowering costs, local sourcing can lead to improved supply chain resilience, shorter lead times, and greater control over product quality.

This is where modern software is key. With the right tools, organisations can seamlessly identify, manage and optimise relationships with local suppliers, helping them adapt quickly to changes.

Sourcing and Supplier Relationship Management (SRM) software plays a central role in identifying and managing local suppliers more effectively. These tools provide detailed databases of suppliers, their capabilities, and key performance indicators (KPIs).

Identify local alternatives: Find competitive local suppliers who can meet needs at reasonable prices.
Track supplier performance: With comprehensive tools to monitor metrics such as delivery time, quality and cost, software can ensure that organisations are working with suppliers who meet expectations and help reduce the risk of disruptions due to non-performance.
Monitor compliance: Ensure that local suppliers meet industry standards and regulatory requirements to prevent delays or compliance-related issues.
Negotiate better terms: Enter negotiations with local suppliers armed with key performance metrics, improving the ability to negotiate favourable pricing and terms.
Manage risk: Identify and mitigate risk of serious problems caused directly by the actions or inactions of your suppliers by maintaining a high level of visibility of the information that acts as key indicators of each supplier’s ability to perform (e.g. business continuity plans, quality and safety assurance processes, certifications and regulatory compliances, actual performance history and internal satisfaction levels).
Analyse costs: Identify cost-saving opportunities, such as switching to local suppliers to avoid tariffs, while maintaining quality and efficiency in the supply chain. Data can also be used to assess whether switching to local suppliers will result in overall savings.
Automate compliance: Ensure all documentation and contracts are compliant. Access key supplier information, including product certifications, specialties, and performance history, helping to ensure smooth operations even in the face of shifting tariffs and regulations.
Communicate and collaborate: Work closely with suppliers to address challenges, adjust prices, renegotiate contracts, or find alternatives - helping build stronger, more resilient relationships.

Conclusion

As tariffs continue to affect trade, software is a vital tool in helping organisations adapt and thrive. By utilising tools such as Sourcing and SRM, organisations can streamline supplier management, measure supplier performance, identify risks and optimise supply chains. Such solutions enable organisations to mitigate the impact of tariffs, secure competitive pricing and maintain a reliable supply of products and services.

Ultimately, leveraging technology to navigate such challenges results in more efficient, resilient and cost-effective supply chains.