The COVID-19 pandemic taught us a lot, how to make bread, how much human interaction fuels us, and how important the health of the supply chain is for basic day-to-day functioning. After all the complications, bottlenecks, and stressors of that time, we’ve come out on the other end with new strategies for navigating supply chain challenges. We’ve written about warehouse best practices we uncovered due to the pandemic, and in our recent LinkedIn live event with JBF Consulting, we dug into how we can best navigate transportation risks and global disruptions affecting our supply chain.
You can watch a recording of our conversation here, or read below for the main takeaways. Below we’ll break it down into the challenges and solutions Brian Carlson, Cornerstone Edge Founder, and Tony Wayda, JBF Consulting Principal, recommend to combat risk and disruption head on.
Supply Chain Challenge #1: Reliance on Single-Sourced Manufacturing
While some companies have been proactively expanding their supplier base, many large companies still rely heavily on single sourcing from countries like China. As recent events have shown, relying on a single source poses significant risks, especially amid global disruptions like those in the Suez Canal and the Red Sea. Adding to this, political tensions and tariffs create additional layers of potential disruption.
Solution: Taking a proactive approach is key. Brian says operations must “Diversify manufacturing and assembly locations by engaging contract manufacturers in multiple countries (e.g., Vietnam, India, Mexico).” Although initial setup costs may be higher, diversified sourcing reduces dependency on one region and increases operational resilience.
Supply Chain Challenge #2: High Transportation Costs and Limited Alternatives
Companies relying solely on container shipping from APAC face delays and rising costs, especially during peak season or geopolitical disruptions. Ongoing congestion at key ports—such as Singapore, Shanghai, and Ningbo—contributes significantly to the rising costs, as delays lengthen the time goods remain in transit. In emergencies, air freight becomes a costly last resort.
Solution: Operations need to be nimble and adaptable to stay ahead. Tony recommends “Exploring nearshoring or shifting some manufacturing to LATAM.” While it is true that labor costs may be higher in the region, transportation costs from LATAM to the U.S. are generally lower, with options like cross-border trucking and intermodal transport. This is an opportunity to expand the number of options available to you in case of unexpected disruptions.
Supply Chain Challenge #3: Limited Flexibility in Supply Chain Systems and Response Capabilities
Much of the technology in use today is focused on providing visibility into shipments, which can only go so far. Software that only tracks shipment delays doesn’t provide the flexibility to respond to unforeseen events, such as rerouting or scaling up production in different regions.
Solution: New options are providing operations teams with more sophisticated insights to adapt to constant changes in the supply chain. Brian recommends businesses “Invest in adaptable software that enables increased capacity for alternative lanes, enhanced supplier ramp-up capabilities, and flexible production shifting.” Emerging technologies, such as “supply chain towers” powered by AI, offer even more predictive capabilities, identifying potential transportation needs and geopolitical risks to enable proactive adjustments. AI-powered predictive analytics can also be used to forecast potential disruptions, providing a more resilient supply chain model.
Supply Chain Challenge #4: Underestimating the Impact of Global Tensions on Supply Chain
It is difficult to predict how an operation will be impacted by what is going on in the rest of the world. Companies may not fully grasp how geopolitical tensions (e.g., Middle East conflicts, Brexit, or natural disasters) impact global supply chains until disruptions occur. This not only means there is poor planning, but worse, that all actions taken to address the issues are reactive instead of proactive. Reactivity is often a bandaid, not a solution, inefficient, and almost always more expensive.
Solution: Having a better understanding of how the business operates as a whole is an excellent way to determine what works and what gaps need to be filled. Brian suggests operations “Conduct annual risk assessments, which will help ensure the supply chain remains flexible and diversified.” He believes that a proactive approach, including a roadmap with diversification projects, can help address potential future risks.
Supply Chain Challenge #5: Cost Constraints in Expanding Manufacturing Footprint
Cost is almost always a challenge and a real roadblock for many businesses. While diversifying manufacturing to mitigate risk is essential, it comes with upfront costs in setup and operational adjustments, which can be hard to swallow.
Solution: Running a business involves planning and thinking of the long-term costs. Just like the cost of a monthly subscription-based warehouse management system (WMS) adds up over time, so do manufacturing costs. Tony suggests businesses take a macro approach and “Consider long-term cost savings through reduced dependency on APAC and lower transportation expenses.” For instance, manufacturing in LATAM allows for lower-cost shipping methods and avoids higher air freight rates in emergencies.
Navigating Supply Chain Challenges
As global supply chain risks continue to evolve, adaptability and proactive strategies are no longer optional—they are essential. By diversifying sourcing, investing in flexible technologies, and prioritizing risk assessments, companies can position themselves to handle unforeseen disruptions with resilience. If you’re looking for support in navigating supply chain challenges, trust us to be your guide. Reach out to us for a supply chain evaluation, a roadmap, help planning your new facility layout, and more. Let’s see how we can make your supply chain your differentiator.