In the most recent Real Talks webinar, “Protecting Margins from Tariff Risks,” Carlos Centurion, River Logic’s President, explored how supply chain leaders can proactively prepare for rising tariffs and their impact on manufacturing and supply chain networks. Many leaders have expressed concerns about effectively assessing operational and financial effects while adapting quickly without compromising business objectives.
Avoiding Common Mistakes
Carlos addressed common mistakes companies make when responding to tariff changes, emphasizing the risks of knee-jerk reactions. He highlighted the importance of anticipating potential impacts and evaluating tariff scenarios holistically. This means considering costs beyond tariffs, including materials, labor, energy, and transportation.
The Role of Network Design in Tariff Optimization
A key takeaway from the discussion was the role of network design in preparing for tariff uncertainties. Traditional network design often focuses solely on logistics and cost-cutting, whereas a Value Chain approach evaluates structural, policy, and contractual alternatives. This approach helps companies develop strategies that are not only cost-effective but also resilient.
Turning Tariff Risks into Opportunities
Carlos explained how a well-constructed Value Chain Optimization model can transform tariff risks into margin-improving opportunities. Businesses can quantify the true margin and profit impact of potential adjustments by modeling real costs rather than relying on standard cost assumptions.
To mitigate disruptions and build resilience, companies should:
- Assess their manufacturing footprint through scenario analysis.
- Understand cost impacts and explore alternative sourcing strategies.
- Optimize supplier contracts and maintain multiple sources for critical materials.
- Evaluate duty offsets and trade agreements to remain agile.
Aligning Operational Decisions with Financial Goals
For leaders looking to align operational decisions with broader financial goals, Carlos emphasized integrating supplier contracts and capacity planning within a comprehensive value chain model. This approach enables companies to make informed decisions on product mix, customer segmentation, and pricing strategies to maximize profitability under different tariff scenarios.
Where to Start
Carlos advised building a baseline value chain model for those uncertain about where to begin. This provides a clear picture of current performance and allows for scenario projections. Even a partial model can offer valuable insights within weeks.
To truly navigate tariff uncertainties, supply chain leaders need a solution that encompasses the entire value chain, integrates with financials, and expands the scope of costs included in the analysis.  Click here  to discover how River Logic’s Value Chain Optimization is the only comprehensive solution designed to drive long-term profitability and achieve corporate goals.
Watch the full webinar recording now to dive deeper into these insights and explore strategies for protecting margins against tariff risks.
