Supply Chain Roundtable: Lots of Issues to Light Up the Landscape
The view of Earthrise from the Apollo 11 spacecraft on July 20, 1969, the day astronauts Neil Armstrong and Edwin “Buzz” Aldrin became the first humans to walk on the moon. (Getty Images/Stocktrek Images)
For supply chains, fireworks are hardly exclusive to July.
While America celebrated its independence, disruptions, geopolitical turbulence and other dynamics continued to create smoke around the globe, limiting visibility and choking supply routes. As usual, there was no shortage of issues for the monthly roundtable of experts from Institute for Supply Management® (ISM®) to examine.
Michelle Rohlwing, MBA, ISM Manager, Product Development, Innovation and Learning, now has roundtable seniority with the retirement of Jim Fleming, CPSM, CPSD. The panel’s newest regular member is Teresa O’Brien, ISM Senior Faculty Member, Product Development and Innovation; she has more than 20 years of experience in strategic sourcing, corporate procurement and program transformation in such industries as health care, technology and professional services.
Collins Oluka, MBA, CPSM, vice president of procurement — North America and global chemicals group at Avery Dennison, is this month’s guest panelist. The roundtable discussed three dynamics (cybersecurity, inventory management and potential product shortages) that are top of mind for procurement organizations, especially in the current environment.
Lastly, as the country’s 250th birthday month comes to a close, can supply chain successes stoke national pride and wonderment? You bet they can.
Q: The cover story of the July/August issue of Inside Supply Management® examines how cybersecurity defense is becoming a key procurement competency. If a supplier or logistics partner was knocked offline by a cyberattack tomorrow, what contingencies should an organization already have in place today?
O’Brien: Cybersecurity is no longer just an IT concern — it is a core supply chain resilience capability. If a supplier or logistics partner were impacted by a cyberattack, the organization should already have contingency plans in place, including qualified backup suppliers, business continuity procedures, and clear cross-functional response protocols. Lean on IT and their experiences to help build the supply chain plan to model what works.
Rohlwing: If a key supplier gets hit by a cyberattack, the best defense is having a plan before it happens and as Teresa states, this is not just an IT concern. Organizations should know which suppliers are critical, have backup sources ready, keep enough inventory on hand, and regularly review supplier risks so they can keep operations running if a partner goes offline.
Oluka: While Michelle and Teresa are spot-on regarding alternate sourcing and aligning with IT, procurement must elevate its contingencies beyond just physical supply to focus on digital containment and contractual agility. A backup supplier won’t save you if a partner’s compromised system infects your own ERP through a shared integration. To be truly prepared for a supplier cyber event tomorrow, organizations must have three critical contingencies in place today. First, application programming interface (API) “kill switches” and zero-trust Integration. Supply chains run on deeply integrated data. If a logistics partner is compromised, procurement and IT must have pre-established protocols to instantly sever API connections and electronic data interchange (EDI) feeds. You must be able to isolate the “blast radius” to ensure their breach doesn’t become your breach.
The second criticality: contractually mandated time-to-notify service-level agreements (SLAs). The biggest enemy in a cyberattack is the delay in communication. Suppliers often try to quietly fix breaches before notifying clients, so such contracts must include stringent SLAs requiring notification of a suspected breach within 12 to 24 hours. Lastly, instead of holding arbitrary safety stock, procurement should calculate its exact time to survive (TTS) for every supplier with a high impact on revenue. This means knowing how many days the business can operate before a line-down situation occurs. TTS dictates exactly when to activate the backup suppliers, moving continuity from a panic response to a calculated, mathematical execution.
Q: The ISM® PMI® Reports are finding little evidence of tariff-driven panic buying, despite continuing concern from panelists. What practical steps should companies take now to prepare for potential new tariff actions without overbuilding inventory or tying up too much working capital?
Rohlwing: Companies don’t need to panic buy inventory, but they should be preparing for different tariff scenarios. These practical steps can help: (1) identifying products most exposed to tariffs, (2) evaluating alternate suppliers or sourcing locations, (3) reviewing contract terms and (4) running cost-impact analyses so they can react quickly if new tariffs are announced. The goal is to build flexibility into the supply chain and understand potential financial impacts without tying up cash in excess inventory that may not be needed.
Oluka: Strategic sourcing practitioners must shift our mindset from simply absorbing or forecasting tariff impacts to actively engineering our way around them. Protecting working capital in a volatile trade environment requires looking beyond traditional sourcing and pulling advanced structural and financial levers.
There are two advanced levers to consider. First, tariff engineering and foreign trade zone (FTZ) utilization — procurement can partner with R&D and trade compliance to explore modifying a product’s design, weight or components to shift it into a more favorable Harmonized Tariff Schedule (HTS) classification. Additionally, moving final assembly into an FTZ allows companies to defer, reduce or even eliminate duty payments. Second, invest in duty drawback programs — too many organizations leave millions of dollars on the table because they view tariffs as a sunk cost. If your company (1) imports tariffed components, (2) manufactures finished goods domestically and (3) exports any portion of them, you can often recover up to 99 percent of those paid tariffs through duty drawback. Turning compliance into a revenue-recovery engine injects liquid cash back into the business.
O’Brien: Strengthening supplier relationships, evaluating alternative sourcing options and increasing visibility into tariff-sensitive categories can help organizations respond quickly to new tariff actions while preserving working capital. A balanced approach that emphasizes agility and risk preparedness is more effective than overbuilding inventory.
Q: An interesting nugget in the ISM® Services PMI® Report for June: Commodities tied to data center construction — including memory components, electronic components, switchgear and wire/cable — remain in short supply. How should procurement teams identify whether AI-driven infrastructure demand is creating hidden risk in their own supply bases?
Oluka: The true hidden risk of the AI boom isn’t happening at Tier 1, it’s happening at Tiers 2 and 3, where hyperscalers and traditional industrial suppliers are quietly competing for the exact same foundational capacity. A standard supplier survey won’t uncover this. To spot whether AI infrastructure demand is cannibalizing your supply base, procurement teams must implement two proactive strategies. The first is multitier supplier mapping: Don’t just ask your Tier-1 supplier if they are in stock; map where their sub-components come from. You need to know if your automotive, heating, ventilation and air conditioning (HVAC), or medical equipment suppliers rely on the same foundries, copper fabricators or high-voltage switchgear facilities as tech giants building 100-megawatt data centers. When a tech titan drops a multibillion-dollar order, lower-tier suppliers will reallocate capacity to the highest-margin buyer overnight.
Second, track non-traditional early warning indicators. Procurement teams should monitor big tech capital expenditure guidance and data center building permits. A surge in local data center permitting today is a guaranteed predictor of shortages of switchgear, transformers and wire in that region 12 months from now.
Rohlwing: Procurement teams should look for suppliers that may be affected by the increase in data center construction, even if they don’t sell directly into that market. They should pay attention to products like wire and cable, semiconductors, and electronic components. Teams should watch for longer lead times, higher prices or supplier capacity issues, and talk regularly with key suppliers about demand trends. The goal is to spot potential supply constraints early before they impact your business.
O’Brien: Increased supplier engagement, market intelligence and risk assessments can help identify potential constraints early and strengthen supply chain resilience.
Q: As the nation celebrates its 250th birthday this month, what supply chain achievements in American history impress you most? Those that helped win World Wars? Limited or eradicated viruses and diseases? Sent astronauts to the moon? Or something else?
O’Brien: As we approach the Fifth Industrial Revolution, I am amazed at the progress we have seen in my lifetime in the digitization of the supply chain process. EDI and supplier portals emerged approximately 15 years ago. Before that, we were faxing POs. The accomplishments of our past are amazing. We can now expect that magnified exponentially.
Oluka: For me, the absolute pinnacle of American supply chain achievement is the Apollo space program. NASA had to coordinate more than 20,000 distinct industrial contractors, universities and suppliers — encompassing more than 400,000 workers — to build a vehicle with 5.6 million parts. And they did it entirely without ERP systems, cloud platforms or AI; they did it with slide rules, paper contracts and telephones. From a modern CPO perspective, Apollo serves as a humbling reminder that even with AI and digital tools, the true magic of supply chain lies in aligning a massive network of partners toward a single, seemingly impossible goal.
Rohlwing: For me, it’s the manufacturing ramp-up during World War II in the U.S. and the women who made it possible. As millions of men left for military service, women stepped into manufacturing and supply chain roles, helping scale production of everything from aircraft to equipment. It’s a great example of how people, processes and logistics can come together to achieve something incredible.