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As it stands, the United States and China are in an aggressive trade war which could dramatically affect businesses across the U.S. With the threat of massive tariff increases and the deadline of March 1st quickly approaching, businesses are struggling to plan for these possible changes. Companies often track tariff costs by using what is called a Harmonized Tariff Schedule (HTS). HTS(s) are lists of codes that are used to identify any goods that are traded internationally. Each good receives a code that translates to its HTS based on the country of import. There are over tens of thousands of these unique codes, making it extremely difficult to understand the cost impact of an increase in tariffs.

How can your business plan for something like this? Jim Preuninger, CEO of Amber Road, stated, “In times of uncertainty, scenario building and analysis can be done preemptively to provide more time to fully understand, design, and implement needed changes.  Multinational companies design their supply chains taking into consideration many factors, including fully landed costs, regulatory issues – including tariffs, lead times, and supplier quality and reliability”.1 With the complexity of HTS codes, it’s difficult for businesses to quickly adjust to abrupt changes. As stated, one option is for the business to conduct “what-if” analysis to plan for both best- and worst-case scenarios.

By leveraging the right Connected Planning technology, like Anaplan, businesses can quickly plug in possible tariff increases and see the downstream impact on shipping costs. Using current rates along with rates in other countries, companies can plan to a vendor level for the goods and codes that your business is looking to import. With this new and increased visibility, companies can plan and adjust to the most cost-effective shipping methods.  It is important to drive these solutions in real-time through connected planning, so your business can limit negative downstream impacts when sudden changes occur.

As uncertainty grows with the trade conditions between the U.S. and China, businesses must be prepared for all possible scenarios. Connected Planning with Anaplan empowers businesses to take a proactive approach, have time to negotiate new rates or shipping routes, and avoid being at the mercy of their vendors when change happens quickly.

Spaulding Ridge combines years of experience in supply chain with cloud-based technology expertise to help leading clients plan for the unexpected.  We work with our clients to understand their processes and optimize them using the right solution for their business.  To learn more contact us at [email protected].

Reference:

  1. “Supply Chain Trends To Watch In 2018.” Forbes, 2018, www.forbes.com/sites/stevebanker/2017/12/07/supply-chain-trends-to-watch-in-2018/#71e7887050fc.

Kyle Rish
Kyle Rish
Associate Partner, Spaulding Ridge
About the Author

Kyle Rish has 10+ years of experience within the supply chain industry playing various roles, including as a Supply Planner, Demand Planner, and finally as a Supply Demand Planner for the Americas at Apple, Inc. Kyle brings his in-depth experience to Spaulding Ridge in the Anaplan practice as an Associate Partner in the Anaplan Practice, where he leads supply chain initiatives.