Manufacturers Struggle to Keep Shelves Stocked Amid Tariff Shifts

Global trade tensions and shifting tariff policies are creating significant challenges for manufacturers as they work to maintain product availability on retail shelves. According to Christy Christian, senior industry principal with Kinaxis, these disruptions are not entirely new, but the pace and unpredictability of change have intensified. Manufacturers now face a rapidly evolving landscape where tariffs can shift overnight—from metals to paper to other key materials—making it difficult to maintain stable, long-term supply chain strategies.

A key issue lies in the extended and globally distributed nature of modern supply chains. Many companies source components or raw materials from regions far from where final products are assembled, which introduces delays and reduces flexibility in responding to sudden tariff changes. The cascading effects of such disruptions extend across tier one, tier two, and tier three suppliers, amplifying bottlenecks and vulnerabilities.

Traditionally, companies have mitigated supply chain risk by building inventory buffers. However, in today’s financial climate, organizations are less willing or able to tie up capital in excess inventory. Maintaining large stockpiles directly impacts free cash flow, which remains a top priority for many manufacturers. This constraint leaves supply chains with limited slack and little room for error when disruptions occur.

As a result, firms must find ways to optimize and adapt their networks within increasingly complex conditions. Agility—both in planning and execution—has become essential. Companies need to rapidly update sourcing strategies, reallocate inventory, and pivot operations in response to tariff shifts or supplier closures. Yet, the challenge is ensuring that adjustments happen quickly enough to prevent excess raw materials from arriving after market conditions have changed. In today’s volatile global environment, the ability to dynamically balance inventory, cash flow, and sourcing flexibility defines supply chain resilience.

Christian also comments on the hurdles that typically come with moving from manual spreadsheets to AI-powered orchestration in the healthcare supply chain, the reliability of AI-driven demand forecasts in the face of unpredictable events; how supply chain modernization directly affects the affordability and accessibility of OTC medicines; and more.

A transcript of her conversation with PC can be found below.

PC: With global trade tensions and tariffs reshaping supply chains, what specific challenges are manufacturers facing in keeping shelves stocked at retailers?

Christian: It isn't any different than other disruptions. I just think that the speed is different. One day it's a tariff on metals, the next day it's a tariff on paper, the next day it's a tariff on something else, so as they're building their supply chains—and many supply chains are pretty long—we've moved and stretched our supply chains where we're not typically sourcing from where we're building, which then has that inherent timing in that ability to react through that tier 1, tier 2, tier 3. That’s, I think, one of the biggest challenges.

When you look at inventory stocking all the way through that end-to-end network, there's not significant buffer all the way through there. You still have tier 2, tier 3 suppliers closing. If you think about, how do you mitigate, typically, they've always mitigated with inventory. They're not getting the approval to take that those dollars and invest in inventory.

That's tying up capital, and when you think about free cash flow, that's incredibly important. I do think that it's trying to optimize their network in that complex environment that it's in. Being able to pivot when the tariff changes from one location or commodity to another, and update your plan in a timely manner that the inventory or the raw material is not coming in already [is important]. Then you're stuck with it, and then you don't know where to put it.