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Mitigating Trade War Risks: Do Procurement Organizations Have the Data Needed to Respond?

08/15/2018 By

What’s the best tool procurement organizations have to mitigate risks in the U.S.-China trade war? In a word, data.

The Trump administration’s Section 232 and 301 probes have led to billions of dollars’ worth of tariffs, igniting a U.S.-China trade war. And the tit-for-tat duties are only likely to escalate: The Office of the U.S. Trade Representative in July published a list of additional Chinese goods to tax — to the tune of $200 billion. With everything from vaccines to nuclear reactor parts to metals beyond steel and aluminum up for consideration, escalating trade tensions have introduced numerous unforeseen risks into procurement and supply chain organizations.

To help identify those risks and recommend preventative strategies, our sister site MetalMiner recently sat down with Bindiya Vakil, CEO of Resilinc, a provider of supply chain risk management software. In a wide-ranging conversation, Vakil made the case for taking a proactive approach to data gathering and risk mitigation, saying that responding to new trade measures on an ad hoc basis is akin to flying blind through a storm.

“Our whole underlying philosophy is that the risk problem is actually a data problem,” Vakil told MetalMiner. “It’s a visibility problem. Because you are flying blind … therefore you don’t know what’s coming at you and you don’t know what the pitfalls are, until it is too late. Therefore, your supply chain is more vulnerable and you’re more susceptible to bad things that might be in your path.”

Laggard organizations are only just discovering their risk exposure with respect to tariffs, while leaders are responding to and recovering from disruptions as they arise. Risk management processes and supporting procurement software systems are enabling the latter approach, to be sure, but neither of those could exist without a healthy data foundation. To learn more about how to find and manage all of that supply chain data, be sure to check out the full interview over on MetalMiner.