Addressing global supply chain disruptions in wholesale distribution
What have wholesale distributors learned from the impact of coronavirus on the global supply chain, and what steps can be taken to mitigate future risk?
COVID had everyone talking about supply chains. Five years later, volatile business conditions with sweeping tariff changes are putting supply chain risk back in the spotlight.
We started the year with US tariffs threatened or imposed on geopolitical friends and frenemies alike, for reasons ranging from countering trade imbalances to applying pressure to stop of the flow of migrants and fentanyl. There’s the potential end of duty-free treatment of a billion low-cost packages a year. And we have the apparent end of the unipolar pax Americana and the emergence of a multipolar geopolitical environment.
All that plus the usual suspects in supply chain instability: natural disasters; economic surprises; infrastructure problems; talent shortages; transportation issues; and suppliers’ production capacity, product quality, and financial wherewithal.
Mounting challenges and relentless risks mean companies need to double down on strengthening their supply chains. The cost of inaction is high, as we know all too well from the pandemic, when many businesses were caught flat-footed, leading to supply shortages and delays.
Managing tariff risks to the supply chain
Faced with “the most significant tariff changes in 50 years,” chief supply chain officers must respond strategically in ways that go beyond absorbing costs or passing them onto customers, Gartner analysts advised.
Twenty-five percent tariffs on imports from Mexico and Canada were scheduled to take effect Tuesday March 4, along with a doubling of the 10% tariffs on imports from China.
“CSCOs who anticipate that current tariff volatility will persist for years, rather than months, should also recognize that their business operations will not emerge successful by remaining static or purely on the defensive,” Brian Whitlock, Senior Research Director in Gartner’s Supply Chain practice, said in a prepared statement.
Nearshoring and alternative sourcing routes are a couple measures business leaders are weighing as they look for ways to mitigate the impact of tariffs, but those strategies may not necessarily pay off over the long term. Companies need to make major changes that give their supply chains the strength and agility to withstand disruptions now and in the future.
Bill aims to boost supply chain resilience
Lawmakers have taken steps to strengthen supply chains, with the U.S. Senate passing its “Promoting Resilient Supply Chains Act of 2025” act in February. The bill focuses on “critical industries,” but is broadly applicable.
The text of the act provides a nice high-level overview of how to boost the resilience of a supply chain. Some key steps:
- Map and model the supply chain as well as the impact of potential shocks to that supply chain. That includes assessing the demand for and status of inputs, equipment, and technologies related to production, as well as associated warehousing, transportation and distribution.
- Identify gaps and vulnerabilities, both existing or anticipated, in the above.
- Identify potential supply chain shocks.
- Evaluate the capability and capacity of alternative suppliers of production inputs or manufacturing equipment/technology.
- Identify tools that leverage data and expertise to provide insights into supply chain vulnerabilities.
Keep in mind that:
- Supply chain risk assessment isn’t a one-and-done undertaking. It takes continuous monitoring of diverse data points.
- The deeper into the supply chain you can gather data that drives insights, the more robust your supply chain will be.
- Supply chain resilience depends on more than just supply chain assessment and planning; it takes integrated business planning.
Getting better at supply chain planning
Systems to manage all that and then present key information in a clear, actionable ways exist, and they’re getting better all the time.
They can take a real-time snapshots of supply chain factors and model risk scenarios involving one or multiple unpleasant surprises. Then they can model the differences that various risk-mitigation strategies—say, adding suppliers in different geographies, adjusting manufacturing locations, or diversifying transportation modes—can make on production capacity and profitability.
With the big-picture risks taken into account, multilevel supply planning can be done across a diverse production network and multilevel bills of material. Tactical rough-cut planning can balance supply with demand in different production, transportation, and storage scenarios.
Operational response management can help a manufacturer smoothly transition to contingency plans should production be impacted by shutdowns, logistical tangles, or material shortages.
Inventory optimization + demand forecasting
Other tools also play key roles in supply chain resilience, including:
- Inventory optimization, to set inventory targets and balance profitability with potential supply shocks or demand surges
- Sales and operations planning, to incorporate sales strategy, service levels, and profitability into the supply chain resilience equation.
- Demand forecasting and management, which uses statistical modeling and machine learning algorithms to improve forecasting accuracy.
Demand forecasting is of particular importance here, because it drives core operational processes— logistics, manufacturing, and financial planning—that in turn determine what the supply chain should look like.
An ability to run ad-hoc what-if demand scenarios through generative AI-supported natural-language queries presents huge opportunity in balancing supply chain risk with profitability.
In an ideal world, the technological tools to support the Promoting Resilient Supply Chains Act of 2025’s prescription for assessing supply chain risk would be universally applicable. But supply chain risks differ depending on the business, and so will the prioritization of the tools involved. Given the raft of uncertainties out there, it’s a good time to get to know them.