How should supply chains be navigating the challenges presented by rising geopolitical tensions? Nick Banich, partner and chief revenue officer, U.S.A. and Canada with Miebach Consulting, offers advice.
The economic dominance that the U.S. enjoyed coming out of the Cold War, during which the nation was the world’s “one central pole of power,” is coming to an end, Banich says. “The world is becoming a blue marble again, and I think companies need to start coming to terms with that.”
Tariffs are here to stay, in one form of another, and companies need to start rethinking their supply chains accordingly. Volatility, says Banich, is the “new norm,” and those companies that are responding by redesigning networks and mapping an understanding of upstream risk “are the ones that are less frozen than others.”
The lesson of today: Businesses “need to be prepared to pivot quickly, have resiliency and have redundancy in their supply chains,” Banich says. “The next four years are going to be more like the last four than the previous 40 before it.”
Decisions must be made about where to source product in a manner that minimizes risk. Banich says companies must engage in “what-if” scenario planning, with the understanding that, as corporate financial statements are fond of saying, “past performance is not indicative of future results.”
Artificial intelligence and machine learning can be important tools in that effort, but it’s not necessary to undergo a wholesale replacement of information systems to use them. Many companies already have technology stacks in place that could be augmented by machine learning to enable deeper and more effective analytics. The goal of AI, Banich adds, should be to “empower people to make more powerful decisions.”