The most important strategy to minimize the impact of sudden tariff changes is to create a resilient supply chain. Addressing tariffs requires a short-term and long-term strategy. In the short term, you must stay ahead of changing conditions, enhance your supply chain visibility so that you know the origin and risks of your end-to-end supply chain and be ready to move rapidly.
With tariff policies constantly shifting, businesses are facing new challenges in keeping their supply chains efficient, cost-effective, and resilient. How can companies prepare for these changes, mitigate risks, and adapt their strategies to stay competitive? As a part of this series, I had the pleasure of interviewing Lisa Anderson
Lisa Anderson is the founder and president of LMA Consulting Group Inc., a consulting firm that specializes in manufacturing strategy and end-to-end supply chain transformation that maximizes the customer experience and enables profitable, scalable, dramatic business growth. She has been named in the Top 46 most influential in Supply Chain by SAP, a Top 15 Supply Chain & Logistics Expert by RateLinx, and a Top 50 ERP Influencer by Washington-Frank. She recently published SIOP (Sales Inventory Operations Planning): Creating Predictable Revenue and EIBTDA Growth on how to successfully navigate the supply chain chaos with superior customer service and profitable growth.
Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?
Since my parents grew up in an environment impacted by the Depression, they worked at a young age, helped the family and went to school 24/7. When they grew up and had kids, they decided to give us the opportunities they didn’t have. Thus, I was able to try a wide variety of activities and sports such as ice skating, tennis, pottery class, chess class etc. It gave me confidence that I could do whatever I tried if I set my mind to it, and it got me accustomed to managing multiple variables and potentially conflicting priorities. Over time, my parents encouraged me to choose an activity I was interested in doing in high school, and they went out of their way to get me to training sessions in off season to set me up for success. It gave me the perspective to think ahead; thinking three moves ahead of the competition to ensure success. These skills are cornerstone to navigating the multiple, conflicting priorities in the supply chain while keeping a forward-thinking eye on the future of supply chains.
Can you share the most interesting story that happened to you since you began your career?
I’ve been fortunate to have several interesting events during my career. One of the most interesting was when I attended a Board meeting of the company I worked for when I was the VP of Operations. Since I was focused on practical results, I never thought about the fact that I was a woman in a man’s world. While at a Board meeting with private equity backers in the United Kingdom, my Director of Procurement pointed out to me that I was the only woman at the table. I hadn’t noticed that as it was just typical for my career, but when he pointed it out, it made me take a step back. I appreciated that the president gave me the opportunity for the role as he was interested in results over perceptions, even though it was harder for him. The private equity backers would have preferred a grey-haired man from Harvard. I was also pleased with my success and that my employee was excited to point it out. When I first started, he was not on board with reporting to a young woman with less experience in Procurement than he had. Thus, I considered that a win!
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
When I first started my consulting company, I found a consulting mentor because I knew how to help clients, but I didn’t know how to find clients. He suggested that we publish articles and follow a thought leadership strategy. Thus, I started a monthly newsletter in Word as he also said it is better to start and be consistent than it is to deliver a fancy newsletter. People I knew received my newsletter and enjoyed the practical advice; however, I was putting these articles into the ether. What I didn’t realize is that writing articles is useless unless people see them and can find them when they have a question. I never had time to post them on the blog, and so my newsletter was good for a small group of people but no one outside of my circle was aware of them. Even the few I posted were rarely seen. Of course, no one will find an article amidst trillions of articles on the web. They were lost in the ether. Fast-forward several years, and I learned that I should bring on resources to help get the word out. If I only had time to post 10%, what made me think that would change if I kept following the same process? Thus, I hired a marketing resource to help me get them out so they would be seen. I also learned that it doesn’t make sense to throw them into the ether. It is like assuming people will see a specific grain of sand. Thus, I learned to target audiences and make sure they were visible where my potential clients would look when they had a question.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
I have many people who have been instrumental to my success over the years. When starting out in consulting, people I expected would help didn’t, and people I didn’t suspect would help were invaluable. For example, a former IT colleague went out of his way to help me get set up from a technical standpoint. Small items make a huge difference when getting started in consulting. For example, knowing how to get a website seems obvious now, but I didn’t know what I didn’t know at the time. Additionally, a former CFO colleague sought me out to help with a project early in my consulting career. She was confident I could help when I was new to the role. If I wasn’t an expert in a certain skill required for a project, she brought on consultants to supplement my knowledge and work with me to succeed. Thus, I learned while providing value and built a track record I could rely upon to gain additional clients down-the-line.
Is there a particular book that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
I resonated with my consulting mentor’s book, Getting Started in Consulting. Prior to deciding to consult, I read a book on executives in transition. It said that if you consult, you shouldn’t do it between jobs. You should commit to it. Thus, I read Alan Weiss’ Getting Started in Consulting to see if the career seemed like a good idea. I resonated with his commonsense approach and business acumen of what “works” in organizational development. In essence, I agreed with his business sense, and he made finding consulting opportunities sound doable. If you followed this approach, you would gain clients. Of course, it is not that easy, but his advice was on target — and it helped propel my success.
Do you have a favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life or your work?
My favorite quote is Benjamin Franklin’s “Energy and persistence conquer all things.” My parents always made me feel that if I wanted to accomplish something, they had no doubt I could do it. It just might require persistence. When ice skating when I was young, I learned quickly that falling in front of a group of judges is not uncommon. You must get up and try again. If I wanted to do something, the trick was not to give up. Instead, try different avenues to achieve the goal. Typically speaking, I wasn’t the fastest, best or smartest person in a particular activity, but I believed that I could figure it out and keep going until I was successful. I learned that if you kept going, learned along the way, and tried hard, you will eventually pass most competitors, like the story of the Tortoise and the Hare.
How have you used your success to make the world a better place?
I have spent considerable time with students in manufacturing, supply chain, and technology. I see students as the future of the profession, and so I have invested time in mentoring students, leading student case competitions, supporting local students, providing students with opportunities, connecting them with executives and/or job opportunities etc. I’ve shown excitement about the career and explained how these careers provide value to organizations, people, and contribute to making the world a better place. The specifics depend on the product produced, but I’ve yet to find a product or situation that doesn’t have a benefit. It is exciting to see students see the value of their contributions.
Ok, thank you for that. Let’s now jump to the primary focus of our interview. How can businesses proactively adjust their supply chain strategies to minimize the impact of sudden tariff changes?
The most important strategy to minimize the impact of sudden tariff changes is to create a resilient supply chain. Addressing tariffs requires a short-term and long-term strategy. In the short term, you must stay ahead of changing conditions, enhance your supply chain visibility so that you know the origin and risks of your end-to-end supply chain and be ready to move rapidly. Make sure you have backup and alternate sources of supply that can scale up and/or down rapidly. Longer-term, you must take control over your end-to-end supply chain, expand your manufacturing capability and leverage advanced technologies to mitigate the impact of tariffs and achieve profitable growth.
What key factors should companies consider when deciding whether to absorb increased costs, pass them to consumers, or restructure their supplier network?
When companies are evaluating whether to absorb increased costs, pass them to consumers, or restructure their supplier network, they should go back to common sense. Not every situation will be the same. There are differences in suppliers, customers, margins, cash flow, lead times, backup sources of supply, geographies, likely outcomes, timeframes, etc. With that said, there are general themes likely to hold up under stress. For example, Chinese companies are more likely to absorb at least some of the tariffs because they rely heavily on the U.S. market and want to continue to grow. Of course, there will be a point at which the costs must be passed on. However, since China is considered high risk, you should simultaneously pursue restructuring your manufacturing and supply network. The potential Mexico and Canada tariffs are more likely a negotiating tool and short-term in duration. Tariffs to reduce dumping will take effect and be inflationary to stimulate investment in critical industries in the U.S. Reciprocal tariffs are likely to take effect to a certain extent to move towards fairer trade. These could reduce the cost of goods. For example, Europe charges the U.S. 7% tariffs on cars, and the U.S. charges Europe 2.5%. Europe has signaled that they might reduce tariffs to 2.5%. If so, the impact will stimulate demand. Overall, I expect tariffs to be mildly inflationary and stimulate a resurgence in manufacturing.
How do you assess the risks and opportunities that come with shifting manufacturing or sourcing to different regions in response to tariff fluctuations?
Shifting manufacturing will carry risk. You cannot shift manufacturing quickly as you must start up additional manufacturing capabilities, expand manufacturing, source regional suppliers, etc. You must plan the transition, redesign products if you want to take advantage of opportunities to automate, source materials and components, ensure energy, natural resources and rare earth minerals availability, plan for the appropriate financial resources to support the transition, etc. Make sure you have researched the new regions, suppliers, logistics routes and other supply chain risks. Each situation will be different. Use an assessment methodology that prioritizes the factors that pertain to your situation, considering the impact, likelihood of occurrence, and seriousness. In fact, tariffs shouldn’t be your sole focus. Take a step back and assess the full situation with tariffs as part of the equation.
Ok super. Here is the main question of our interview. Can you please share “Five Things Businesses Can Do to Address Supply Chain Management with The Looming Tariff Changes”? If you can, please share an example or story for each.
- Assess risks and vulnerabilities: Companies must immediately assess their end-to-end supply chain for risks. Go beyond your supplier to your supplier’s supplier, and your suppliers’ suppliers’ supplier. Which risks and vulnerabilities exist? Which countries of origin are you dependent on? How vulnerable are they to tariffs? Do you have backup sources of supply? For example, a client reviewed their end-to-end supply chain for risks. They were dependent on the Russia-Ukraine region for copper. Thus, they immediately worked on a long-term contract deal with their core supplier to secure supply for the next year. Simultaneously, they pursued additional sources of supply of copper to make sure there were multiple options available in year two.
- Source backup sources of supply & diversify supply: Every company should have a backup source of supply for core materials and components. In today’s VUCA (volatile, uncertain, complex, ambiguous) environment, you must build resilience with backup and alternate sources of supply. A backup source of supply is not simply finding a supplier and adding them to a list if supply is disrupted. When supply is disrupted, it is likely everyone will have the same issue. Thus, you must stand out from the crowd as a partner so that your backup source will prioritize you if/when that happens. For example, when I was a VP of Operations and Supply Chain, we sourced a backup supplier for our core material. We didn’t just find a supplier; we started purchasing 20% of our needs from the backup source of supply. Our private equity backers were not thrilled because it added cost to the products; however, it was the only way to build an ongoing relationship with the supplier. When a disruption occurred at the ports, our backup source of supply came through for us even though we were a smaller player than our competition because we continually purchased from them. In a similar vein, companies must diversify sources of supply to different suppliers, different regions, etc.
- Reshoring & Local Manufacturing: As companies look to the future, they must start planning to reconfigure their supply chains. To mitigate tariffs, they can reshore production and/or expand local manufacturing. These strategies not only address tariffs; they also provide advantages of quicker product development cycle times, quicker lead times, more responsiveness, and the opportunity to reduce costs with a redesign of the product and automation. For example, a personal protective equipment manufacturer evaluated their supply chain and decided to reshore production. While reshoring, they were able to reduce the total cost of the product and improve service to customers.
- Nearshoring, friendshoring & regional supply chains: China is the world’s #1 manufacturer and so they produce at scale. In addition to reshoring/ expanding local manufacturing, companies must supplement volume requirements with nearshoring, friendshoring and regional supply chains. For example, aside from the U.S., Mexico is the other country with the ability to produce at scale. In addition, Mexico has the advantage of the USMCA agreement and is located closer to customers, allowing for rapid changes and quick lead times. For example, an aerospace company could not meet the full volumes required by customers. Thus, they outsourced the less complex manufacturing tasks to Mexico and maintained the highly engineered, complex tasks in the U.S., thereby expanding capabilities by 30% and reducing costs by 10%.
- Upgrade, digitize and automate: As companies reconfigure supply chains, reshore, nearshore, and expand regional supply chains, it is the ideal opportunity to upgrade technologies and automate processes. The greater the automation, the less labor required to produce products. Since there are limited resources available, the more that can be automated, the greater the output with the same level of resources. In addition, the more companies can upgrade their use of technologies and automation, the more consistent the quality and the less cost required. By leveraging technologies, efficiencies are improved, waste reduced, and customer value enhanced.
What role does technology and data analytics play in helping businesses navigate supply chain disruptions caused by new trade policies?
Technology and data analytics play a key role in navigating supply chain disruptions. For example, artificial intelligence and advanced supply chain technologies can constantly assess changing supply chain conditions. As disruptions arise, the models will be run on the fly, ships diverted around disruptions, costs and lead times optimized, and customers served. If volumes change, impacting the supply chain, the data analytics will pick up this type of change rapidly and provide recommendations.
Can you share an example of a company that successfully adapted to a major tariff change and what lessons can be learned from their approach?
A tools manufacturer saw tariffs coming down the pike on their Chinese manufacturers. Thus, they put together a transition plan to move production to Vietnam. It took several months with aggressive action plans to complete the transition, but they were able to seamlessly move production to Vietnam. Fast-forward several months, and they were able to avoid tariffs on production from China. A few years later, they saw that Vietnam might come under pressure due to the connection to China, and since they had a manufacturing facility in Mexico, they decided to move production from Vietnam to Mexico. Again, they were ahead of the curve in nearshoring to Mexico.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good for the greatest number of people, what would that be? You never know what your idea can trigger.
I would encourage manufacturers to reshore production and expand manufacturing in the U.S. Not only will this provide high paying jobs and allow the U.S. to control products critical to national security, but it will also add $2.69 to the economy for every $1 invested in manufacturing. Thus, it will have a meaningful impact on people’s lives and provide safety and security for U.S. businesses and consumers.
We are very blessed that some very prominent names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch with, and why? He or she might just see this if we tag them.
I’d be interested in meeting Lou Gerstner as he did a great job in turning around IBM.
How can our readers further follow your work online?
You can subscribe to my newsletter and blog at https://www.lma-consultinggroup.com and follow me on LinkedIn or X.
Thank you for these fantastic insights. We greatly appreciate the time you spent on this.
About The Interviewer: Vanessa Ogle is a mom, entrepreneur, inventor, writer, and singer/songwriter. Vanessa’s talent in building world-class leadership teams focused on diversity, a culture of service, and innovation through inclusion allowed her to be one of the most acclaimed Latina CEO’s in the last 30 years. She collaborated with the world’s leading technology and content companies such as Netflix, Amazon, HBO, and Broadcom to bring innovative solutions to travelers and hotels around the world. Vanessa is the lead inventor on 120+ U.S. Patents. Accolades include: FAST 100, Entrepreneur 360 Best Companies, Inc. 500 and then another six times on the Inc. 5000. Vanessa was personally honored with Inc. 100 Female Founder’s Award, Ernst and Young’s Entrepreneur of the Year Award, and Enterprising Women of the Year among others. Vanessa now spends her time sharing stories to inspire and give hope through articles, speaking engagements and music. In her spare time she writes and plays music in the Amazon best selling new band HigherHill, teaches surfing clinics, trains dogs, and cheers on her children.
Please connect with Vanessa here on linkedin and subscribe to her newsletter Unplugged as well as follow her on Substack, Instagram, Facebook, and X and of course on her website VanessaOgle.