- Emerging trade and technology risks are keeping supply chain professionals "up at night," panelists from Johnson & Johnson, Molson Coors and Expeditors International said during a session at the Council of Supply Chain Management Professionals' Edge 2018 conference.
- With recent geopolitical changes, such as tariffs and renegotiation of NAFTA (now known as USMCA), "everybody has to rethink their supply chain," said Jennifer Diaz, president of the Organization of Women in International Trade, who moderated the panel.
- When assessing risk mitigation strategies for a company, supply chain, logistics and compliance all need a seat at the table before a decision is made, the panelists said.
While some risks come in the form of black swans and are nearly impossible to prepare for or predict, others result as an evolution of long-term trends.
Newly elected leaders in many nations have prioritized a shift toward localization and nationalism. U.S. businesses may not have predicted the exact value or types of goods facing tariffs, but the "America first" rhetoric prevalent in President Donald Trump's campaign was an indication that trade protectionist measures were coming.
"Now tariff engineering is coming to life," Diaz told attendees at the session. Companies are exploring what changes they can make to their products or supply chains to avoid newly imposed tariffs, considering options from the use of foreign trade zones to changes in warehousing and distribution, she said.
Across the pond, the result of the Brexit referendum came as a shock to many, but businesses now have several months to prepare for the possibility of a hard border between the U.K. and mainland Europe.
"Because we're an international company, we continually scan for risks and what's going on across the globe," said Sylvia Fouhy, vice president of customer experience in North America for Johnson & Johnson.
She said the company is particularly concerned about the possibility of a no-deal Brexit if negotiators fail to reach a deal by the end of March 2019. "If there is a hard border with the U.K., how do we ensure that when it comes to live-saving drugs ... that we've got enough inventory in the country?"
Another top of mind concern for supply chain professionals is cybersecurity. "Everybody should be scared about what happened to Maersk with NotPetya," Diaz said.
With an "eruption of interest" in emerging technologies come risks of interconnected systems, said Kara Mahoney, vice president of account management for Expeditors International, a freight forwarding company.
"When we make these adjustments in our supply chain, we can't lose sight of cybersecurity," she said.
Because business decisions around risk management — whether for technology or trade — connect so closely with the value chain, panelists emphasized the need for supply chain's strong presence at the table.
"We need to make our voice pretty loud within our companies," Mahoney said. "Before any mitigation strategy is even discussed, we need to have cross-functional representation at the table."