But what does this really mean? Let’s look at an example: An automaker may have its engine manufactured in Germany, its transmission in Mexico, and its GPS from South Korea, with final assembly in the United States. Tariffs could force automakers to move production, reducing economies of scale and increasing prices for the end consumer. Processing he resulting number of variables, scenarios, and decision matrices brought on by the trade war is a daunting challenge.
Despite these challenges, digital technologies, such as predictive analytics, machine learning, and artificial intelligence (AI), provide companies with the resources and insights to manage risk and anticipate events. Today’s leading supply chains run on data, monitoring for risk and opportunity, and blend human and digital strategies to make decisions in real time. Companies need a cognitive supply chain that is interconnected, self-learning, predictive, adaptive, and intelligent. It can help leaders react faster to risks outside of their control.
Consequently, there are three key approaches businesses can implement to help anticipate, prepare, and manage disruptions to the supply chain.