Global trade is becoming increasingly volatile, accelerated by geopolitical tensions, shifting tariffs, and economic uncertainty. This environment puts immense pressure on global manufacturing operations and makes building a resilient supply chain a top priority for companies.
For finance and operations leaders, moving from a reactive, crisis-management mindset to proactive, predictive decision-making is key.
Dan Barrett, Director of Strategic Alliances at QueBIT, defines supply chain stability as the "opposite of variability" and explains that it's all about mitigating shifting costs and delivery timeframes. QueBIT is a consultancy firm that helps companies enhance their agility through improved planning and analysis. For businesses, this means reducing unpredictable elements to ensure a reliable and efficient flow of goods.
Financial Planning & Analysis (FP&A) teams play a critical role in supporting a company’s Sales and Operations Planning (S&OP), connecting financial insights with operational decisions to drive resilience.
In this article, we’ll share strategies FP&A teams can employ for effective integrated business planning and scenario modeling, along with industry considerations to help build a more stable supply chain.
Several interconnected factors influence supply chain stability, including:
Tariff-driven cost variability: Tariffs introduce unpredictability to the cost of raw materials and finished goods, directly impacting profitability.
Global supply chain complexity: The more geographically dispersed a supply chain is, the more exposed it is to risks from global conflicts and shipping lane disruptions.
Physical and operational resilience: This involves a company's ability to withstand and quickly recover from unexpected events, such as natural disasters. A key element of this is building in redundancy, such as having multiple manufacturing sites, to avoid a total shutdown if one facility is compromised.
Data and process maturity: Having accurate, real-time data and a robust planning process is essential for making informed decisions and responding quickly to changes.
Strategic decisions on manufacturing location: Companies are re-evaluating their global manufacturing footprint, with some exploring "nearshoring" or "onshoring" to reduce reliance on distant and potentially volatile regions. It often requires significant upfront investment in technology.
Certain industries are more susceptible to tariffs than others, primarily because they rely on a complex web of international suppliers and markets.
According to Dan, "any industry that relies heavily on imports or exports is vulnerable, especially those that import raw materials or subcomponents." Additionally, data from the Federal Reserve Bank of Richmond reveals which industries are more exposed to tariffs than others.
Industries Most Exposed to Tariffs:
These sectors typically have complex, global supply chains with high reliance on imported raw materials and components. Key examples include:
Automotive
Fabricated metals
Apparel
Textiles
Electrical equipment
Industries Least Exposed to Tariffs:
Industries with a more domestic sourcing base or lower import dependency tend to be less affected by tariffs. These include:
Food
Chemicals
Agriculture
Energy
To properly manage these risks, companies will have to account for them in their financial models. Dan notes that for manufacturers today, this involves breaking down the bill of materials to identify all imported components.
He continues, "Financial models for manufacturers can incorporate tariffs by identifying imported parts in a bill of materials and applying an 'uplift' to the raw material cost. This can then be consolidated to project the final cost of a finished good.”
It’s also important to consider the broader financial picture when assessing the impact of supply chain disruption on your business.
For example, increased material costs due to tariffs can severely constrain a company's cash flow, impacting net income, the balance sheet, and cash flow statements. According to Dan, "This can lead to significant operational changes like reduced production, layoffs, or even facility closures."
Modern FP&A teams can proactively address supply chain volatility using a monthly Integrated Business Planning (IBP) process. IBP, an evolution of Sales and Operations Planning (S&OP), is an executive-led process that provides a strategic perspective for managing the entire organization.
The IBP process helps organizations align strategic and tactical plans each month to make sure they're allocating critical resources—such as people, equipment, and budget—to meet customer demand profitably. It consists of five key steps:
The product management review helps decision-makers understand how product changes (including new product introductions, discontinuations, or promotional activities) will impact the business.
A crucial step for IBP, this review ensures that key initiatives are on track to deliver to expectations, and that all parties are aligned on the time-phased plan for product introductions or changes.
The demand review phase assesses and develops forecasts by integrating market insights, historical data, and inputs from the sales team. The goal is to generate a consensus-based "most likely" demand plan.
This step also provides a forum to review and reconcile demand in response to market forces, such as economic changes, competition, or promotional activity.
During the supply review, an organization assesses whether the supply chain can support the latest demand plan.
This step also helps to identify potential material or resource constraints by reviewing operations performance and assessing supply capability and flexibility.
Integrated reconciliation is a continuous process that addresses and resolves issues identified by previous steps in the process. It involves modeling various scenarios to manage gaps between the business's strategic goals and the updated business plan.
This stage goes beyond simply examining the numbers to provide a deeper understanding of key business levers and aims to present options and recommendations to the senior leadership team.
The final step in the IBP cycle involves the senior leadership team reviewing key performance indicators, operational and financial trends, and approving the revised forward plan.
The management review provides a "single set of numbers" that drives the business. For instance, this could be a rolling 24-month integrated sales volume and financial plan that allows for the alignment of strategic and tactical goals across the organization.
FP&A teams benefit from this single source of truth as it increases the transparency and reliability of financial plans, eliminating the need to reconcile multiple, siloed departmental forecasts.
Vena gives modern FP&A teams the tools they need to be agile and responsive, amid supply chain uncertainties.
The platform accelerates planning cycles, and offers robust scenario planning analysis capabilities, enabling FP&A teams to do their best work by:
Empowering users with a familiar interface: Vena is flexible FP&A software with a native Excel interface. Since most organizations are already familiar with Excel, this enables quick model development and a shorter training time.
Handling data and models at scale: Vena’s flexible Excel interface, paired with its centralized database to house businesses' key sources of data in one place, is a major benefit for quickly performing agile demand planning and scenario analysis, especially important for keeping up with rising material costs.
Supporting the full S&OP journey: Vena can support a company's entire S&OP process by easily integrating its existing models and providing a powerful platform that scales with businesses as their needs grow.
Accelerated insights through the power of AI: Vena Copilot uses generative AI and natural language prompts to automate tasks that once took hours, such as gathering data and disseminating insights, generating reports, and analyzing trends. It can also perform predictive forecasting and scenario simulations.
PetIQ, a manufacturer and distributor of pet health and wellness products, leveraged Vena to support operational and financial agility amid fluctuating consumer behavior and input costs related to tariffs. By centralizing budgeting, forecasting, and scenario planning, the team can quickly update forecasts, evaluate different scenarios, and understand the impact on cash flow and liquidity.
Vena’s real-time, consolidated data model allows PetIQ to reforecast efficiently, respond to market and supply chain disruptions, and align workforce and operational planning with overall business objectives. These improvements have enabled faster, more informed decision-making without adding headcount, helping the company maintain resilience as it scales.
LGG Industrial, a distributor of industrial fluid handling, sealing and material conveyance products, used Vena to transform its FP&A process from reactive to proactive amid market volatility and tariff disruptions. By consolidating data from six ERP instances into a single, connected platform, the team now has real-time visibility into sales, margins, EBITDA, and operating spend.
Vena’s Excel-native environment and dynamic reporting templates enable faster month-end closes, automated variance analysis, and scenario modeling to evaluate tariff exposure and market fluctuations. These capabilities allow leadership to make informed operational and financial decisions in real time, improving both supply chain responsiveness and strategic planning across the organization.
Opting for proactive, data-driven planning is essential for navigating the current global trade environment. Robust scenario planning and cross-functional collaboration are key players in this shift, as they allow organizations to identify and take advantage of opportunities that arise from supply chain disruption.
FP&A teams are at the forefront of this change, serving as strategic partners that connect operational decisions to financial outcomes.
Ready to build a more resilient and stable supply chain? Get in touch to learn how Vena can help you transform your planning processes and prepare for the future.
Use our free Bill of Materials Template to track and evaluate product manufacturing costs so you can plan smarter.
Download Now
