Supply chain risks are growing. A multitude of complex, interconnected risk factors are driving volatility and putting new pressure on manufacturing CEOs and COOs to adapt in response.
Implementing a practical supply chain risk management strategy can help. Keep reading to learn what that looks like and how to get started.
What are the top supply chain risks?
Supply chain risks are largely shaped by government policy, geopolitical events and international conflict. Key risks include tariffs, the wars in Iran and Ukraine, energy shortages and USMCA ambiguity, as well as raw material pricing volatility — all of which are deeply interrelated.
Here are the major supply chain risks explained in more detail:
- Tariffs: The Trump administration’s tariff policies have added new costs to U.S. imports (current tariff rates add 10-50% to the price of imported goods), with the volatility of the tariffs themselves also presenting a challenge.
- International conflicts: The Iran war has pushed oil and gas prices up significantly, while the war in Ukraine has affected prices for other commodities like wheat and cooking oil (while also resulting in current and possibly future sanctions on Russian gas and oil).
- Rising energy demand: The wars are affecting supply, but a growing U.S. demand for energy that’s driven largely by data centers has also pushed energy prices higher.
- Volatile raw materials pricing: Raw materials prices have continued to climb higher, including crucial materials like metals and resin, with supply chains for molds and dies also heavily disrupted.
- USMCA ambiguity: We don’t know whether the USMCA negotiations will successfully result in a new iteration of the trade agreement, creating additional uncertainty for manufacturers, especially those with cross-border operations.
- Driver shortage: New U.S. policies have limited the labor pool in the trucking industry, making it harder to move goods.
Ending the wars with Iran and Ukraine may be a tall order for the average manufacturing business to take on. But that doesn’t mean you’re helpless here either.
Wipfli brings the curiosity needed to uncover what’s been overlooked. Our ingenuity helps create unexpected results. Our team of more than 3,200 associates works together to bring integrated solutions to turn data into insights, to optimize workflows, to increase margins and to transform through digital innovation.
