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How to Design for Supply Chains with New Tariffs
The announcement of new tariffs with China earlier this year threatened the immediate disruption of the manufacturing sector, which included impacts on American jobs. Understandably, people across industries worried about global supply chains and the potential of the tariffs on trade flow.
Of course, tariffs didn’t mean the end of things, but it does encourage a reevaluation of supply chain practices that guard against current and future policy changes. Considering your inventory and your costs from beginning to end are key to designing a stable supply chain for your work.
Recalculating Costs: An Honest Assessment
Additional tariffs mean additional costs, so it’s important to factor those in from the beginning of your work process. Evaluate your working capital costs, insurance premium costs, and others. From here, you’ll be able to determine where you may need to increase price and by how much.
Another aspect of recalculation includes reevaluating relationships with suppliers that may have incurred additional costs. Even highly specialized products are made by a number of companies now across the world, so searching around can help keep costs down.
Your recalculations might include a formal analysis that looks at the cost of each part of the supply chain, allowing you to more fully evaluate your margins. This can provide the information you need to make choices about the cost of storing extra inventory, Free Trade Zones, and different suppliers.
Free Trade Zones have seen an increase in popularity since tariffs were instituted, which gives companies the chance to delay import duties on raw and component materials until they leave the zone. FTZs are interesting, but they are hard to come by and have lengthy approval processes. Expect additional reporting, which may make the FTZ more work than it is worth.
An Informed Approach to Manufacturing
Perhaps the best option is an entirely new approach to product development that focuses on working smarter and more efficiently. Informed manufacturing ensures the entire process is more effective, which can help make up for dollars lost to tariffs.
Adopting a smarter supply chain practice means making sure that products are focused on user experience and behavior, as opposed to just product features. Focusing on end users creates better products, which means more money in the end. Designers should imagine what each step of use is like for prospective customers, adjusting accordingly.
Collaborating for the Best Results
Good product design is also collaborative, bringing together a variety of minds from different places, and working together to solve problems.
Good design is the cornerstone to solving the supply chain tariff problem, and Fusion 360 is an excellent way to ensure your product goals are met. With easy collaboration, this cloud-based software gives you the tools you need to design for the customer.
Isolated, working by yourself, you can become set in your ways, unable to see a solution to the problems imposed by tariffs (and other logistical hurdles) on your projects. Collaborative tools like Fusion 360 enable you to both move past your own blind spots and help others overcome theirs, too.