How Supply Chain Leaders Can Turn Tariffs into Strategic Advantages: Gartner
A new report from Gartner is urging supply chain leaders to frame long-term tariff volatility as a potential opportunity to strengthen operations and gain a competitive advantage.
With some of the most significant tariff shifts in the past 50 years now on the horizon, leaders who take decisive action in response stand to ride the wave most effectively, the report suggests.
While cautioning against moving too quickly in the face of the changes, Gartner analysts also warned against the risks of not acting fast enough — or at all. Instead, they say, CSCOs should be projecting ahead and incorporating possible scenarios — including escalations or de-escalations – into their scenario planning.
“CSCOs who anticipate that current tariff volatility will persist for years, rather than months, should also recognize that their business operations will not emerge successful by remaining static or purely on the defensive,” said Brian Whitlock, senior research director in Gartner’s Supply Chain practice, in a statement.
Possible Course of Action
Potential tariff changes have been top of mind for many CPGs – with questions of price increases, building out partner ecosystems, and alternative sourcing all cropping up. Despite possible headwinds, Gartner analysts suggest that tariffs could actually help CPGs thinking about their supply chains to get more competitive.
“The long-term winners will reinvent or reinvigorate their business strategies, developing new capabilities that drive competitive advantage,” said Whitlock. “In almost all cases, this will require material business investment and should be a focal point of current scenario planning.”
Gartner suggests taking a five-part approach to changes brought about by tariffs: retire, renovate, rebalance, reinvent, and reinvigorate.
“Retire” involves assessing whether certain products or businesses should be phased out due to the infeasibility of absorbing or passing on new costs.
The “renovate” phase focuses on adjusting existing products or pricing strategies while maintaining portfolio integrity.
“Rebalance calls for businesses to remain agile, preparing for potential countermeasures, policy shifts, and competitor responses as initial tariff effects unfold.
“Reinvent” encourages companies to explore new opportunities in markets that are less impacted by tariffs or to pivot existing resources to better serve local demand.
Finally, “reinvigorate” suggests that early winners should look for ways to extend their competitive edge, such as expanding manufacturing capacity or leveraging strategic investments from partners.
Whether or not tariffs end up being a supply chain strategic advantage in the longer term, consumer goods leaders appear to be optimistic about the resiliency of their supply chains overall. According to a CGT survey, fielded in October 2024, 82% of respondents described their supply chain resiliency as good or very good/excellent, while 71% said the same for their supply chain agility.
