Ulf Venne:
Hello and welcome everybody to this today’s webinar, which is Navigating Tariffs and Rising Costs, which is part of our supply chain optimization series. I’m Ulf, I’m the Vice President of Enablement Solutions Consulting and Revenue Operations here at Everstream Analytics, which is also hosting the meeting. Today I’m accompanied by my good friend Mike, who’s a solutions consultant at Everstream and our solutions consultant will in the next couple of weeks, and also going forward for a long, long time. Present every second Wednesday, a webinar that is really hands-on helping you to solve concrete problems that are on the topic of supply chain risk management. So this is a first of a long series of webinars, and I’m super excited that we started this. Please know that all attendees are on mute, but you can always use a QA box during the session to send a question to our lovely presenter, and we will address as many of the questions as we can at the end of the session as time’s allowed. And if not, we will come back to you later. All attendees will receive a copy of the recording when the sessions conclude. And with that, I hand it over to Mike for what I think is going to be a super interesting presentation on one of the most burning topics in supply chain risk management right now. Thank you.
Mike Antario:
Thanks Ulf. Hello everyone. Mike Antario. I’m a senior solutions consultant with Everstream, and I am eagerly interested in understanding and jumping into tariffs and the rising costs and the impacts that most companies are facing today, and how we can actually understand and mitigate issues that rise as this administration and then governments around the world handle
And react to tariffs. So I wanted to start on more of the implications
Of tariffs, right? If we think about the implications of tariffs, we kind of break it out into three distinct areas, short-term, midterm, and long-term. You think about short-term, it’s really tier one focused. Tariff monitoring is now a constant task. Teams need tools or partners that help track changes in near real time. Disruptions can occur suddenly, especially if tariff changes are implemented with little notice. Shipments may be held at customs while documentation catches up, impacting on time delivery metrics. Procurement is feeling the pressure not just on cost, but also on workload as supplier communications increase. And this phase is very tier one centric as the first wave impact hits direct suppliers first, then looking into the midterm increases and decreases. This is more where we get into the sub tier, right? So cost inflation travels downstream. What hits tier one suppliers gets passed on to customers.
Eventually, I think we know that we can expect price renegotiations mid-contract, especially in categories with heavy import dependencies. Customer behavior shifts when product price rise. Demand tends to fall, especially in consumer facing industries. Margin compression becomes a boardroom issue at that point, and companies either raise prices or absorb the costs, both of which introduce risk. And finally, the sub-tier impact becomes more visible here. Risk move to a deeper move, deeper into the supply base beyond what many companies can currently monitor for. So thinking about tier two, tier three, tier four, your end tier, and then finally long term. So now we start to think about the financial impacts of the ramifications such as a bankruptcy, right? And again, this is really deep within the sub tier. So financial fragility builds over time, right? Sustained cost pressures and demands drop can push suppliers to insolvency by this stage.
The risk is no longer price related, it’s more of a business continuity measure. Anticipating financial distress early allows you to act before a crisis hits. And I think that’s something we’ll touch on during this presentation. And then bankruptcy obviously creates ripple effects, which could ultimately impact the bottom line for a certain customer that we’re working with. And obviously companies with visibility into their sub tier networks and financial health can act faster, right? Agility here creates a competitive advantage, and those who manage bankruptcies effectively are better positioned and more secure and can gain more market share. And that’s something ultimately we’re going to tackle during this presentation.
Now moving into uncertainty, I think most if not all of us are pretty uncertain in terms of what’s going to happen tomorrow and what’s going to happen a week, a month, three months next year, and so forth, right? So a Greek philosopher once said, the only constant in life is change, right? That is particularly true with trade tariffs these days. As we’ve already seen a huge number of trade tariffs announced since 2024. How many tariffs were announced in the last week? I believe the administration currently is constantly flip-flopping. Yesterday, the Chinese tariff that was impacted was at about 104%. I think China just did a retaliatory measure in response to that at 84% a tariff rate. So these changes are constantly going to occur, and there’s constantly going to be updates and which ones are threats, which ones will actually go into effect. It’s difficult to predict whether it’s new tariffs on China, Mexico, or Canada, all have potential impacts to those responsible for supply chain planning ultimately. And it’s the speed of change and the potential impact that is making everyone concerned. We’ve all seen the news, but what really are the potential impacts? And how can Everstream really help
Companies out there deal with these tariff impacts? Now, if we dive into by industry understanding
The impacts by industry on these tariffs, we look at food and beverage. For example, tariffs from 2018 through 2019 hit the US agriculture industry pretty hard, resulting in over 27 billion in lost exports. Corn and soybean prices alone dropped around 10%, creating a long-term revenue gap for producers and disrupting global supply chains. The auto industry, especially sensitive to tariff driven costs announced could potentially raise the price of a car by five to 8% per vehicle if passed on to consumers, metals, steel tariffs in 2018 led to significant cost increases, roughly 15% on average, and that put around 8,700 manufacturing jobs at risk. And as many downstream industries struggle to absorb or pass on the added costs, metals still remains one of the most expensive sectors to tariffs. And lastly, medical device, despite being high tech and essential medical devices, weren’t really, weren’t exempt from those tariffs. So tariffs increased input costs while retaliatory tariffs from other countries prompted a shift towards alternate manufacturing in Europe. And we’re seeing that as we speak in this moment with this current administration.
Now shifting into understanding tariff exposure, it’s extremely critical. So how does EVERSTREAM come into the picture? Well, you can get a real time alert and updates on the tariff changes and the impacts to your specific supplier network. That’s really the first step. Our alerts help you start by understanding where you are exposed. When you have that information, it can help inform your tariff plan within your organization. You are then better equipped to build a plan with your team with this information and to ultimately determine the cost and quantify true impact of decision-making and impact tracking. And this is just a series of steps on the right side of your screen that we’ve kind of built around an action plan. But these are generally the steps that we take internally and we would offer up in terms of understanding how to deal with a tariff from start to finish, detailing the tariff, tracking the impact, calculating the costs, devising solutions, and we want
To be a partner with you in building that action plan. Now, moving into increases and decreases. So a component of tariff resiliency is having a clear picture of your supplier network, the
Uncovers those sub-tier relationships that I spoke about previously. So you can gain visibility into the suppliers who supply tariff goods. Visibility into sub-tier relationships also helps you know where there may be a single source supplier or experiencing certain bottlenecks, nexus suppliers or suppliers on multiple tiers. Maybe you have a tier three supplier that’s also a tier two, but they’re being supplied by different suppliers with our application and our SubT tier discovery capability or actually able to eliminate those specific suppliers and key dependencies, utilizing our discover capability to find those specific suppliers and material relationships to then make recommended next steps or impacts to maybe a certain tariff impact that could come along in the near future. And as you see in your screen, trading relationship data on the bottom left is probably the most important part of that, right? Where do we get our data?
A lot of which comes from import and export information, which is just publicly available via manifest files. We also do look at shipment and PO information news and media, customer data websites. So we’re constantly scraping for new trading relationships. And ultimately one of the key pieces that I think a lot of other companies are missing is intercountry. Intercountry relationship data is critical. Domestic shipments are one of those obscure things that nobody’s really been able to crack the code. And I think we have the secret sauce, which is mobility data, which allows us to understand shipments moving domestically within a country. So for example, within the United States, if you have a shipment for a certain material at a tier three that’s being sent to a tier two domestically sourced, we can actually track that and illuminate that into a sub-tier network. And then also if we think about Europe, so the Inthanin region is extremely difficult to understand shipments. So understanding where trucks are moving from countries like Germany into the Czech Republic and so forth are currently extremely invisible. And we try to eliminate that through that capability of proprietary data source that we have internally. And ultimately, as I said before, the main impact is to illuminate the sub-tier and find those hidden pieces of information that can actually help us interpret trade tariffs,
Single source suppliers, nexus suppliers or bottlenecks. And this is a few snippets of what we can really uncover
From that sub-tier discovery, including an impacted tier one suppliers, impacted sub-tier suppliers, top suppliers by tier one, by tier one name. And ultimately what we want to do is partner with you, whether you’re a customer or you’re someone just listening in here to understand the true impact of your sub tier and remediate that we can look into that data, whether that’s a material shipment from a tier three to a tier two, if you’re trying to understand the impacts from imports and exports from countries that are highly tariffed to minimally tariffed at that 10% rate, we have the capabilities of finding that data into the sub tier and exposing those into easily digestible dashboards. And then also
Through our in-house professional services team working with you directly. So with expertise, we can accomplish a
Number of things, like I mentioned before, identifying tariff exposed materials. So spotting materials at risk due to reliance on suppliers in tariff regions, monitoring, obviously monitoring tariff risk, staying updated with real-time supplier risk intelligence with our in-house human intelligence team that we have that’s constantly keeping up to date and abreast to new tariff regulations. And also evaluating supplier criticality, right? Understanding which suppliers matter most based on location and concentration. And finally running what if scenarios, which is probably one of the most important things we could feed real time insights into planning systems for
Mitigation and also internally in our own application. And while all scenarios are unique, there are a few
Measures we see companies take. There are trade offs of all options. So with visibility into exposure, you can move first to make the best decision for your organization. And at the end, speed is a competitive advantage. So if we think about different mitigation measures that a company could take, fixed prices in advance, component substitution, near shoring, dual sourcing, these are all actions that anyone listening could potentially take once they’ve understood their sub-tier supply chain and can
Make actionable measures to mitigate that risk. And then moving ultimately into our third part, our long-term view,
Which is into bankruptcies. Now internally at Everstream, we take a little bit more of a predictive approach to supplier financial risk intelligence, working with partners like a rapid ratings and a Diamond Bradstreet on top of our own human intelligence team, the platform applies financial risk scores across several key indicators. So if we think about insolvencies mergers and acquisitions, bankruptcies, new formations of any sort, we’re tracking all of that from an incident basis. But then our rapid ratings and Dun and Bradstreet partners are tracking financial score updates. So if there’s a change to a C score, SER score, SSI score that Dun and Bradstreet has, we can incorporate that into a risk scorecard and basically alert the customer that’s using our application well in advance of changes that could be a little bit more predictive in nature to see if there’s a need to remediate a certain supplier they’re working with. Maybe there’s a certain supplier that is experiencing a very high C score as it’s based on the DB rating that would then prompt them to look further into that supplier. Is there an issue that they need to mitigate from a risk perspective and maybe find an alternate source of supply? So we try to take a little bit more of a predictive and reactive approach and culminate those two together into our platform to provide a more holistic view of risk and allow our customers to act on things
In near real time. But then also from a future perspective. And speaking of
That data quality, our proactive human intelligence team goes to the extra mile to deliver the fastest financial risk alerts via court documents and local sources. Automotive and life science clients especially rely on these real time insights, which can save them hundreds of thousands in sourcing costs depending on the specific industry of course. But those are just kind of a snippet of countries that were actively scraping information from different court and bankruptcy filings around the world and providing the best in class financial data, which could be received up to a week before traditional filing methods. So we do pride ourselves on our financial reporting capabilities and our ability
To get information as soon as we can, speaking on ever stream’s.
Risk intelligence. This is a snippet from that scorecard that I just shared with you. This basically is a culmination on the left side of your screen is your external risk, right? So if we think about anything that everstream captures, so could be natural disasters, operational political violence, sociopolitical, and other financial related scores. And on the right side is more of the predictive in nature scores or things that a company would categorize as something more forward looking, right? So d and b bankruptcy prediction scores there I have included, that basically can be a capability built into a holistic risk scorecard that allows our customers to take action on things well in advance. So as I mentioned before, the SER score, FSS score, these are all predictive scores that our partners utilize and we can incorporate into a scorecard for our customers to basically understand what’s the potential impact to our supply base for a certain supplier in a certain part of the world. So the DB score, rapid rating score combined with the scores that we’re capturing internally, including bankruptcy, insolvency, mergers, and acquisition, get combined into what we’d refer to as your strategic risk score. That’s on the bottom left there, that 13 you see there. So this is just more of an example of our internal application, how we can actually
Surface financial risk as it comes up. And then ultimately, what’s behind
The scenes of our solution, it’s our in-house expert analyst team. A quick shout out, they are one of the best, if not the best human intelligence teams that I’ve ever worked with. Being the first report on major events, adding context for important updates, providing clients in-depth analysis of major risks and trends. They’re currently working overtime right now, understanding the impacts to the tariffs, the changes that are ever going, the pullbacks, the reciprocal tariffs that we’re seeing, especially with China that just pushed out an 84% tariff on the United States imports. They’re tracking that 24 7. They use a follow the sun approach. So they’re located all over the world. They speak 12 different languages or 22 different languages, and there are 12 different nationalities, but that is an in-house analyst team that we rely on to feed the updated incidents and impacts from the tariffs, but then also from other parts of risk around the world, which we’ll see in a moment here.
And that revolves around our spin wheel here. So this is our ability to track roughly 140 different risk types across the entire supply chain from plan, source, make, and deliver, everything from earthquakes, production, stoppages, layoffs, and even logistics risk tracking. So if we think about port closures, airport congestion, aviation worker strikes, our human intelligence team, human intelligence team in-house is tracking all of these different risk categories 24 7 outside of just what we were just discussing with the tariffs and insolvencies and bankruptcies. They’re looking at cyber related risks, sustainability related risks, forced labor, child labor. We cover a wide gambit of different risk indices in areas to make sure that the customers that we’re working with are seeing and having a visible source of truth in our application that allows them to act on risk in real time and not be three weeks behind in terms of understanding impact or a plant closure or production stoppage to one of their manufacturing plants. So we have that ability to find those insights in real time through our human intelligence team through public ways and also proprietary ways that allow us to be a
Step ahead in terms of risk intelligence. I think we’re towards the end here, Lauren, if you want to jump back on or olf, I think we can push towards q and a.
Ulf Venne:
Yes, that’s me. I’m going to help out with the q and A here. So thank you, Mike. That was great. A lot of good insights and I like the structure of short-term versus then eventually long-term impacts of tariffs. And we have a couple of questions. So in case you as a listener still have a question right now, you can still ask it through the device, but I want to come back to the last slide you showed because there were a lot of risks that were on the big wheel of risks. And one of the questions we have is how does Everstream actually gather all these different types of alerts? If I remember correctly, it’s like 1000 to 1,500 a day. And also how do we get the tariff updates and how do we make the material specific?
Mike Antario:
Yeah, so great questions. In terms of the incidents themselves, we utilize an AI machine learning algorithm that actually can scrape and monitor different news sources. We also do have a proprietary relationship with DHL, which is specific to everstream. So we have the ability to tap into the DHL network and capture events that is found nowhere else that would not be found on C-N-B-C-M-S-N-B-C or any other news source. And they have roughly 500,000 analysts that we tap into that we can capture information from. And ultimately with that funnel we like to call it, it hits a human intelligence analyst within our team to review those alerts. So from a supply chain perspective, any sort of alert that hits our platform, you can always make sure that that is true and trustworthy information that is reliable information. And there’s information even furthermore, that is not found outside of our platform that’s found only on EA or everret.
And in terms of the tariff relationships, the tariff updates and material updates, a lot of that information is found within the specific incident. So material impacts and whatnot is all tracked by our human intelligence team down to the material. So as it relates to maybe aluminum or different types of metal tariffs, or maybe it’s soybean and corn tariff related impacts, a lot of that information is found within the descriptions of the incident and is tagged as well at a commodity level. So when you’re in the application, you can actually see at a commodity level if there is some sort of related risk for that specific tariff. Hope that answers it.
Ulf Venne:
That does. And it’s also a perfect layout for me to slam dunk it with my next question because it directly ties from commodities to products. So obviously in order to track tariffs, you do need product information in order to track the suppliers. So what type of product information does everstream need in order to really be effective, if anything at all?
Mike Antario:
Depending on the specific type of product, we can handle any sort of material or product finished good that we can ingest and then we can display within the application. So there’s no real time, excuse me, there’s no sort of immediate need to slice and dice different sorts of products. We could ingest any sort of product and relate that to a specific incident through our AI and machine learning algorithm.
Ulf Venne:
But what about then going into the sub tiers? Because as a purchasing organization, I might not know the products coming from the sub tiers. How does that work?
Mike Antario:
Yeah, so that’s part of our discover capability with our material mapping and essentially how our sub tier data works is you would give us a product that you’re procuring for material, and then ultimately we would break that product down into different material components. So if you think about a printed circuit board, right? If you’re procuring a printed circuit board from a tier one, what would theoretically make its way into a printed circuit board? You think copper aluminum circuits themselves, and we basically build out a product tree, and within that product tree are those specific materials and the sub-tier suppliers that ultimately funnel up to that tier one you’re procuring that good from. And that basically gives you this map of
Those sub-tier relationships and the materials you’re procuring from.
Ulf Venne:
Okay, thank you so much. That actually makes a lot of sense and I think it’s a great capability personally, but maybe I’m biased, honestly. Good. There’s another question that maybe is a good segue here. It’s about China, because obviously now with the tariffs in China being bullish about not responding to the current terrorists that coming from the us, maybe it’s a good one to address today. So they talk about having previous challenging identifying suppliers and sub tier suppliers in places like China.
And
Then the question is, do we have a database of companies in the region or do we have analysts on site to first uncover risks, but then also uncover supply chains in general?
Mike Antario:
Great question. So twofold there we do have both. We have data capabilities of capturing Chinese businesses and Chinese business relationships that we have housed in our everstream knowledge graph, which is more of a, I like to call it just a cloud of data relationships between business to business. So we have that. And then in terms of our human intelligence team, we do have analysts that are based in the region that are able to capture information, and then we have machine learning capabilities of reading news sources that are locally based in China that can extract risk intelligence from those new sources and input that into our system in an English readable format. So we have both from a subter relationship capability of tracking those specific sub-tier suppliers, and then we have in-house analysts that can incorporate that data or incident relevant data to sub
Tiers, and then also any sort of supplier based incident.
Ulf Venne:
Good. And that also count, essentially it’s the same for other places that might be impacted by tariffs right now, like I’m in Germany, so the European Union would be something that I would be interested in personally. So it’s also something where we can gather data for SubT, for example.
Mike Antario:
Yes. Yeah. I’m sorry, was that part of the question? I might’ve missed the
Ulf Venne:
Yeah, no, it was not. I just added this as part of the question. Okay, so that’s a yes, I guess.
Mike Antario:
Yes, yes. Sorry.
Ulf Venne:
Good. Okay, perfect. Yeah, I guess that’s it for the questions we want to ask today. So first of all, Mike, thank you so much for doing this. Very happy. I think the content was great. It’s a very hot topic right now, so I think it was a very timely webinar and everybody just don’t forget what the insolvency wave might come at any point in time now, already has started before the tariffs. It’s not going to get any better. If you want to know more about how supply chain risk management can help you in your daily business today, we had a very hands-on topic that was on a concrete risk right now, but sometimes you want to be more strategic and maybe align strategically how your supply chain might shape up in the future and how you can use supply chain risk management as a strategic tool in your supply chain. That’s where you need a risk scorecard for that helps you shape your decision-making process. In our next webinar, we will talk about this, how to build the ideal strategic risk scorecard. It’s going to be another very exciting meeting, and I’m personally looking totally forward to it. So I hope you join us here as well. If you want to sign up by scanning the QR code and wherever you’re watching, no matter if it’s morning, evening, or night, I want to say have a nice day and
Thank you.