In a global marketplace, tariff-driven input cost variability can add a new layer of consideration to supply chain management, pricing, investments, and market opportunities. Businesses may have to contend with rising duties, rate changes, and a changing list of associated fees, all of which could impact profit margins and disrupt planning.
Staying ahead requires more than traditional cost-control tactics. Businesses need real-time visibility, integrated data, and the ability to respond to changes with speed and precision. The most complete cloud-based ERP systems can provide businesses with scenario modelling and cost analysis capabilities, enabling agile decision-making and the ability to adapt quickly to tariffs before they become operational hurdles.
Traditional approaches may fall short
Historically, businesses have relied on a few strategies to manage the operational challenges caused by import costs increasing.
Raising prices has been one of the most common. Simply increasing prices for customers is the most straightforward way to counter higher tariff costs, but few businesses are positioned to fully maintain margins this way. Higher prices could potentially reduce sales volumes, while competitors may also spot an opportunity to capitalise on these changes.
Renegotiating terms with existing suppliers or shifting spend to vendors in lower-tariff regions offers another solution, though one that depends on negotiations and entails onboarding risks with new suppliers. A more structural shift, such as reshoring production and raw material sourcing, can eventually provide greater long-term control, but is complex, capital intensive and may take years to yield rewards.
Each of these tactics addresses a narrow part of the challenge, and trying to apply these measures in isolation may lead to reactive decision-making rather than long-term resilience.
Turning to data: The core of a sustainable tariff strategy
Regardless of business model or industry, having the right data, tools, and insights will support better, more informed decisions. Devising a comprehensive tariff management strategy requires assessing multiple complex and fast-changing dynamics all at once. But for businesses that lack the ability to precisely track the landed cost of goods sold, visibility into their supply chains, or the tools to conduct scenario analysis, this is near impossible.
And tariffs are only one part of the equation. Freight and shipping, production, packaging, currency conversions, brokerage fees, insurance, and other charges also factor into the actual cost of acquiring goods. Without visibility into all these inputs, businesses risk making decisions based on incomplete or outdated information.
Cloud-based ERP systems consolidate these cost elements across finance, procurement, and logistics, offering a single source of truth. With accurate landed cost data, businesses can make more informed decisions about pricing, margin protection, sourcing, and inventory planning. Instead of guessing at the impact of a tariff change, they can quantify it, track it, and build it into everyday decision-making.
The power of “what if?”
One of the most valuable capabilities that a comprehensive cloud-based ERP system can unlock is scenario modelling; the ability to ask “what if?” and answer with precision. This is especially vital in the context of tariffs, where changes can occur quickly and have a wide-ranging impact.
With a cloud ERP platform, businesses can model a range of tariff scenarios: for instance, what happens if a duty is imposed on a key product line, or if sourcing shifts from one region to another with a different trade agreement? These simulations draw on live data, enabling planners to forecast financial outcomes, evaluate supply chain alternatives, and stress-test different procurement strategies before any decision is made.
The impact of scenario planning capabilities extends across the business. Finance teams can forecast changes in margin. Operations can assess lead time impacts. Procurement can evaluate the feasibility of alternate suppliers. All of this enables faster, more confident decision-making in the face of uncertainty, turning unpredictable variables into manageable risks.
Managing your supply chain
Beyond scenario modelling, cloud ERP provides the tools necessary for agile supply chain management and vendor oversight. Auditing the supply chain can reveal creative ways to reduce costs, such as optimising warehousing, streamlining fulfilment, or switching to more cost-effective shipping methods.
Procurement teams can evaluate supplier performance, helping to identify vendors that may be more vulnerable to disruption or cost increases. These insights make it easier to prioritise which relationships to revisit or which contracts to renegotiate.
Inventory planning also benefits. When costs shift, so does the logic of how much stock to hold, where to store it, and when to reorder. Advanced cloud ERP systems can also leverage artificial intelligence (AI) to simulate inventory supply and demand across the supply chain. These forecasting simulations, or snapshots, can be used to analyse whether inventory levels are in line with demand or planned levels. The power of AI helps businesses match customer requests with supply availability.
Building resilience for the future
What distinguishes leading businesses in today’s supply chain environment is their capacity to adapt continuously to change. Cloud ERP provides the insight and flexibility needed to respond to change quickly and confidently. For businesses looking to minimise risk, control costs, and plan ahead, cloud ERP is no longer a nice-to-have. It’s the new trade secret.
For more than 25 years, Oracle NetSuite has helped organisations of all sizes reach their goals faster and more efficiently. NetSuite provides an integrated business system with embedded AI that delivers powerful financial management, supply chain, customer experience, and HR capabilities. Relied on by more than 42,000 customers in 219 countries and dependent territories, NetSuite is the #1 cloud enterprise resource planning (ERP) solution.
