For years, manufacturers have moved towards horizontal supply chains, which means relying on third-party suppliers, often partners across the globe, to lower costs. This was a shift away from vertical integration, in which a company owns and controls the stages and sources for their manufacturing and production.
The movement to horizontal supply chains was driven by benefits like cost effectiveness, more competition on price, and flexibility of sources and vendors. However, as the U.S. considers implementing new tariffs, manufacturers know that the cost of relying on multiple global suppliers is likely going to rise, especially if any are sole-source suppliers. The potential new tariffs are forcing companies to quickly reassess the resilience of their current supply chain strategy.
Why Supply Chain Resilience Matters in an Uncertain Trade Environment
One reaction to the tariffs is increasing momentum to reconsider vertical integration. By bringing more manufacturing processes in-house and/or sourcing materials domestically, companies have more control over their resources, costs, and production timelines. While this change is not a small undertaking, it is one way to insulate companies in the face of a shifting tariff landscape. To prepare for a change of this magnitude and execute successfully, it demands full visibility into supply chain dependencies and risks across all operations.
This is where technology like Fusion is a huge advantage to help manufacturers map their supply chains, anticipate risks, and make data-driven decisions – including identifying and prioritizing the need for alternate suppliers. If your company is facing these dynamics, our team would be happy to help – please reach out to your Fusion Account Manager or request to speak with our team of experts.
Authors
