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It’s been a highly eventful time for global trade, especially for e-commerce businesses with major parts of the supply chain located in the U.S. and China. Recent trade disputes between the U.S. and China have caused global uncertainty.

Tariffs have been steadily rising and the unpredictable future of the trade war is causing many U.S. e-commerce companies to worry about the health of the supply chain. U.S. shippers have been especially impacted by the changes.

Although it can be uncomfortable to act with confidence during uncertain times, chaos can actually provide a unique opportunity for proving yourself the strongest brand. Here’s how you can turn a chaotic moment into a competitive advantage:

1. Data Prioritization

In the age of data analysis, a company with strong analysis software can navigate unpredictable times with confidence. Using data to predict future impacts of trade regulations allows you to make smart decisions about where you need to make adjustments in your supply chain and how long-term those adjustments should be.

Make use of the advanced technology available to you in order to avoid future risks. If that means you need to invest in better information technology systems, then do it. You will be grateful you made the investment. According to research done by MIT Sloan, “IT systems can be a win-win: They can reduce the impact of risk incidents by enabling a quicker response by screening for possible disruptions.”

While many companies will be analyzing the data with old-fashioned methods such as spreadsheets or simply tracking it on paper, you can gain a competitive advantage by using the latest technology to perform powerful analyses.

2. Regulation Compliance

While it can be a pain to ensure you’re updating your supply chain to comply with new regulations as they’re imposed, you’ll thank yourself in the end. Not only do you need to keep a close eye on your own operations to be sure you’re meeting requirements, it’s imperative to check if your vendors are in compliance.

According to Kim Zablocky, founder of the Retail Value Chain Federation, 0.6 percent of gross sales annually is spent addressing problems caused by vendor non-compliance. That may not be a huge loss for smaller companies, but as your company grows, that leads to a greater amount of money lost.

In order to remain compliant, it’s important to stay informed. There are resources you can use to keep up-to-date and educated on how to follow all requirements. The Department of Commerce has compiled a Retaliation Product Coverage Matrix and retaliation information. Be sure to read and understand all the requirements.

A simple mistake could end up costing you valuable resources. 

3. Future Preparation

Between 2017 and 2018, penalties issued by U.S. Customs and Border Protection increased by 49 percent. That number is expected to be even higher when statistics for 2019 and 2020 are released. This means it’s important to prepare for future increases in trade regulations.

The smartest companies understand that it is best practice to implement necessary procedures to be ready for future scrutiny from customs. The more your company has well-organized systems and smoothly-running processes, the less likely you are to face a CBP Inquiry.

CBP inquiries can cost your organization valuable time, taking away resources from other important tasks. It’s better to simply avoid scrutiny in the first place by setting up reliable systems for addressing changing regulations.

Whether tariffs and other trade regulations increase or decrease, your company will benefit for years to come when you improve your process for meeting trade requirements. You’ll have greater peace of mind knowing supply chain issues are one of the least of your concerns.

4. Minimized Supply Chain Disruption

Although some of your supply chain may need to be relocated, avoid extreme disruptions by only relocating when it is absolutely necessary. Many U.S. companies have moved their entire supply chains to Vietnam to avoid complications with Chinese trade, but this is not always necessary. If it can be avoided, you will save immense amounts of time and money.

The regulations placed on Chinese trade often refer to products that are entirely manufactured in China. It is possible to save money by using outside countries for the early stages of manufacturing but keeping the later stages of the supply chain in China.

Tariffs are typically placed on products based on country of origin. By starting the manufacturing process in one country, but finishing it in China, the country of origin is not China. This means you will save thousands of dollars on tariffs in the end. 

The SC Johnson College of Business spoke with various experts in supply chain management about how to minimize risk through locating your supply chain throughout various regions.

Mike Train president of Emerson, a St. Louis based global manufacturer, says regarding regionalizing the supply chain, “A lot of the work we do is about having regional responsiveness and flexibility.”

Maintaining a strong supply chain is one of the most important aspects of a successful e-commerce business. Learn how to navigate chaotic moments effectively in order to stand out as a brand, while others fail to keep up with successful supply chain strategies.

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