In today’s global economy, manufacturers and distributors face numerous challenges, including the impact of tariff increases. Navigating these complexities requires robust solutions that can provide visibility, resilience, and operational excellence. In this blog, we’ll explore how manufacturers can manage these challenges effectively and answer some frequently asked questions on the topic.
What are tariffs?
Tariffs are taxes imposed by a government on imported goods and services. They are used to raise revenue, protect domestic industries, or exert political leverage over other countries.
How can ERP software help manage the impact of tariff increases?
ERP software helps manage the impact of tariff increases by providing comprehensive landed cost tracking, which includes tariffs and other import fees. This allows businesses to accurately calculate the total cost of goods and adjust pricing strategies accordingly.
How does ERP software enhance supply chain resilience?
ERP software enhances supply chain resilience by enabling multi-supplier management, real-time shipment tracking, and robust supplier relationship management. These features help businesses diversify their supply base and maintain continuity despite trade disruptions.
What are the potential impacts of new tariffs on businesses?
New tariffs can lead to increased costs for raw materials and finished goods, disrupt supply chains, and necessitate changes in pricing strategies. Businesses may also need to diversify their supplier base to mitigate risks.
Industry-Built Solutions for Navigating Tariff Challenges
Facing shifting supplier relationships, extended lead times, and changing trade dynamics? Here are some solutions to help you navigate these complexities and build a resilient manufacturing operation:
Food and Beverage
Recent tariffs on imports from Canada, Mexico, and China are driving up costs for essential food and beverage items, including fresh produce, meat, and alcoholic beverages. Effective methods involve:
- Comprehensive landed cost tracking
- Optimizing procurement strategies
Metal Fabrication
The reinstatement of Section 232 tariffs on steel and aluminum imports is significantly impacting metal fabricators. Best practices include:
- Efficient supplier management
- Real-time cost tracking
Industrial Machinery and Equipment
Tariffs on industrial components and raw materials are raising production costs for machinery and equipment manufacturers. Recommended strategies include:
- Advanced planning and scheduling tools
- Optimizing production processes
Automotive Parts and Accessories
The automotive industry is facing substantial challenges due to tariffs on imported vehicles and components from Canada, Mexico, and China. Optimal approaches consist of:
- Robust supply chain management
- Real-time analytics to adjust pricing strategies
Electronics Industry
Tariffs on electronics and components from China are leading to higher prices for consumer electronics. Best practices include:
- Optimizing inventory levels
- Improving production agility
By implementing these business solutions, manufacturers and distributors can turn supply chain challenges into opportunities, ensuring they remain competitive and resilient in the face of tariff increases and other trade uncertainties.
