Navigating Tariff Turbulence: Optimize Your Supply Chain with our AI-powered solution

The modern supply chain is a labyrinth, a complex network of global sourcing, diverse product lines, and ever-shifting market dynamics. Add to this the volatile landscape of international tariffs, and businesses face unprecedented challenges in maintaining efficiency and profitability.

The landscape of North American trade has been marked by a period of persistent tariff fluctuations, forcing businesses to engage in a continuous cycle of supply chain adjustments. This constant need for adaptation has led to increased operational costs, logistical complexities, and a general erosion of supply chain stability, as businesses struggle to keep pace with the rapidly changing trade policies. In this environment, agility and strategic foresight are paramount.

The interplay between tariff fluctuations and logistical efficiency hinges on the balance between globalization and localization. Localizing operations can mitigate tariff impacts, streamline inventory, reduce storage costs and improve agility, but elevates transportation and logistics and labor costs. A global strategy, is vulnerable to tariff costs, and also compromises faster delivery, enhanced customer flexibility. Moving from global to local strategies can also include additional capital investments such as setting up local manufacturing or distribution centers, etc.

In this environment, making the right decision requires a robust understanding of the trade-offs. This is where OptiWise, our proven digital accelerator, provides a significant competitive advantage. OptiWise enables businesses to analyze and simulate various scenarios, allowing for a gradual adaptation of the operating model with cost control and risk management. This continuous improvement loop between logistics network design and operational performance is essential for maintaining a competitive edge.

Tariffs fundamentally alter the balance between service, inventory, and cost. They force companies to re-evaluate their chosen value discipline and potentially make difficult strategic choices. For instance, a company focused on operational excellence may need to rapidly diversify sourcing, impacting inventory levels and potentially sacrificing cost efficiency. Conversely, a company focused on customer intimacy might absorb tariff costs to maintain service levels, impacting gross margins.

OptiWise is a powerful toolbox for scenario-based modeling, including localization, warehouse size, flow dimensions, and cost category comparisons. It facilitates stock analysis, overall cost synthesis, and simulation of stock variations, enabling faster, data-driven decision-making.

Key Features of OptiWise:

• Configuration of Optimization Problems: Tailor solutions to specific contexts, such as changes in tariffs and other trade policies.
• Optimization Model Setup and Launch: Easily implement and execute optimization models.
• Visualization of Optimization Outputs: Gain clear insights into optimization results.
• Deeper Analysis and Studies: Conduct comprehensive analyses to refine strategies.
• Operational research: Applying generic models to diverse business contexts. Our toolbox includes models like the Multi-flow model for network structure optimization and the Routing model for vehicle fleet optimization.  

How OptiWise provides a powerful way to manage Trade and Tariff uncertainty and risks

1. End-to-End Visibility

Create a digital twin is a virtual replica of your physical supply chain. It helps you see the full picture:

• Where raw materials come from
• How products move across borders
• Where tariffs apply
• How long shipments take

This visibility makes it easier to identify vulnerabilities related to trade routes and tariff zones.

2. Scenario Simulation

You can simulate "what if" situations like:

• A new tariff on goods from China
• Brexit-style trade agreement changes
• Sudden port closures or shipping delays

Why it helps: You can test how these changes impact costs, lead times, and customer service levels—before they happen.

3. Cost and Risk Impact Analysis

The system can model how different tariff rates or customs processes will:

• Affect landed cost per unit
• Shift sourcing economics
• Add risk to specific suppliers or geographies

This helps with fact-based decision-making instead of reacting blindly to changes.

4. Optimization for Resilience

Once scenarios are tested, OptiWise can:

• Recommend alternate sourcing strategies
• Reroute logistics flows
• Adjust inventory buffers
• Minimize tariff exposure

All while balancing service levels and total cost—leading to more resilient and cost-effective supply chains.

5. Agile Decision Support

With a digital twin continuously updated with real-world data:

• You get real-time alerts when trade regulations shift
• You can adapt quickly to avoid delays or cost spikes
• You’re not waiting for quarterly reviews to respond—you're managing proactively

Examples of Success

Transportation: Optimized infrastructure equipment maintenance field rounds for a major transport player, reducing maintenance costs by 30%.

Retail: Optimized truck loads for a retailer, achieving a 15% reduction in logistics costs.

Energy: Modeled future biomethane transportation networks, reducing logistics costs by 15%.

OptiWise offers tailored solutions and collaborates with third-party providers to meet diverse client needs. It accelerates the design of tailored solutions through a test-and-learn approach, fostering continuous improvement.

In today's dynamic environment, businesses need tools that provide agility and foresight. OptiWise empowers organizations to build and adapt our algorithm to their specific needs, navigating tariff turmoil and optimizing their supply chains for sustained success