Not business continuity being in the news...but of course no one is calling it business continuity (although that's what it is). I blogged about how elections impact business continuity earlier this year.
What exactly is in the news now? Companies spending a lot of money now on supplies from suppliers in China before promised tariffs take place and increase the cost of production. Some stories claim that it's causing businesses to lay people off or not get their christmas bonus but I've not been able to verify those second order impacts and was skeptical from the start - I thought it was too lacking in facts to be a real story and Snopes has also found it unverified. However, stocking up on supplies now is a strategy I would advise a client to do.
In another blog from May, I talked about regulatory whiplash's impact on the supply chain and how compliance with regulations is expensive...especially when you can't predict how much will change. It used to be small changes but since the last few administrations have been so polar opposite, they are massive changes - undoing and redoing entire regulations. It makes it hard to know how manufacturer spending will be impacted -- spend more now for rules that may not exist later so you're in compliance now and if they survive, or spend more now for rules that may come into effect later. There is no winning with the guessing except for spending more. It's ultimately - for the businesses - avoiding business death.
Good thing I'm a lawyer because I can offer conflicting advice depending on who is asking. I got you, supplier!
Even if your costs go up for raw materials before you make a component part, it will be harder for you to navigate. Your customers may look for a cheaper alternative or stop making the thing you help them make altogether because it no longer makes fiscal sense. What I would say, though, is look at your contracts. Look at the time for performance. If it takes a while to complete the contract, negotiate for a possible increase in the contract amount based on the market rate. If you get locked into a price now and the contract is to provide X amount of widgets per year for 4 years at today's rate, it may be unsustainable for you to stay in business if tariffs happen. If you try to get out of the contract later, a breach of contract lawsuit won't be cheap.
This really can become - at this stage when campaign promises haven't met Congress yet and a potentially angry public backlash - a chess game played with a magic 8-ball and some UNO reverse cards thrown in for good measure.
Does this sound like fun to anyone? Not at all. I never said this work was sexy. I've said it before: I can't predict the future, but I can help you meet it.
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