Key facts
- Supply chain leaders now operate in a state of permanent disruption, not isolated emergencies.
- Tariff changes, component shortages, geopolitical conflicts, and demand shocks are ongoing challenges.
- Companies are shifting from optimizing for lowest cost to building flexibility and resilience in supply chains.
- Dual-sourced suppliers, redundant facilities, and real-time tariff analysis are new fixed costs.
- Prioritizing critical needs, like components for cancer drug manufacturing equipment, can build customer loyalty.
Supply chain executives from Axon and Schneider Electric shared insights into the persistent disruptions characterizing their industry. Brittany Bagley of Axon and Jackie Zhu of Schneider Electric described operating in a 'permanent state of emergency,' citing frequent tariff changes, memory chip shortages, geopolitical conflicts, and unpredictable demand shocks. They noted that the focus has shifted from optimizing for the lowest cost to building supply chain flexibility and resilience, even if it incurs higher expenses. This includes establishing dual-sourced suppliers and redundant facilities as new fixed costs of doing business globally. Zhu highlighted how Schneider Electric dynamically reroutes trade flows to adapt to policy shifts, sometimes overnight. Both executives emphasized that while customers and shareholders may see a smooth operation, significant invisible work is required behind the scenes. Zhu also shared an anecdote about prioritizing components for a manufacturer of cancer drug production lines, illustrating how such actions can build deep customer loyalty beyond cost or delivery metrics.