PwC: How Manufacturers Can Tackle Supply Chain Shocks

US President Donald Trump’s sweeping tariffs have thrown manufacturing and supply chains into uncertainty.

According to a recent survey by PwC, more than nine in ten supply‑chain leaders are already adjusting strategy and embracing more flexible and diversified models.

With this in mind Carla DeSantis, Operations Transformation Commercial Lead at PwC US, explores how manufacturers can build resilience through visibility, scenario planning and digital transformation. She considers what immediate steps companies can take to manage tariff‑driven disruptions and safeguard their manufacturing operations.

How will tariffs challenge cross-sector supply chains?

The proposed tariff changes represent a significant shift in trade policy. US tariff revenue could rise from approximately US$81bn to nearly US$900bn—a tenfold increase. Sectors that depend on low-tariff imports, such as automotive, pharmaceuticals, electronics, and energy, are likely to be particularly affected. For example, annual tariffs on motor vehicles could increase from US$4bn to more than US$68bn. 

Our Digital Trends in Operations Survey demonstrates that 91% of operations and supply chain leaders report planning substantial strategy adjustments in response to these developments. In addition, 87% cite geopolitical risk as a growing concern, influencing a broader move toward more flexible and diversified supply chain models.

These conditions are prompting many companies to re-evaluate key aspects of their operations, including sourcing strategies, supplier networks, legal structures, and logistics planning. Many are also accelerating investments in technologies such as AI and scenario modelling to better manage uncertainty and model potential outcomes.

What can businesses and leaders do to mitigate worsening supply chain risks?

Start with visibility. You can’t manage what you can’t see. That means conducting a full vulnerability assessment—where your inputs come from, which suppliers are at risk, where and how manufacturing might be compromised, and what transportation routes are exposed to tariffs, delays, or disruptions. Then run scenarios. Our survey found that 53% of leaders are already using AI to anticipate disruptions, and another 31% are piloting those capabilities. You can’t wait for a crisis; you need to simulate it.

We also recommend modelling competitor behaviour. If everyone shifts sourcing to the same regions, how can that affect pricing or availability? What if key logistics hubs get congested? Real-time data and simulation tools can help you play out these “what if” scenarios in advance.

Open conversations with suppliers are also important. This is the time to explore shared risk strategies, multi-sourcing, or even restructuring supply agreements to build more resilience. Tech plays a big role, but so does alignment—across procurement, operations, tax, and finance. The goal is to move from reacting to events to planning for them. In today’s environment, that can be a competitive advantage.

What's the best strategy for adding greater resilience to supply chains?

Starts with rethinking where and how you operate. Nearshoring, reshoring, and diversifying supplier networks are all on the table. But they come with complexity. That means location decisions now need to factor in policy volatility, tax implications, and even climate risk. Nearly 9 in 10 leaders expect supplier and material costs to increase significantly in the next year. This surge in costs leads to renegotiations, planning disruptions, and profit strain, adding to operational intricacy. 

That’s why digital tools matter. End-to-end visibility platforms, AI-enabled scenario planning, and digital twins are helping leaders not just see their supply chains—but test them. While only 21% are using digital twins today, 97% of those who do say they create value. These tools let you ask “what if?” in a structured, data-driven way—and then act accordingly.

Resilient supply chains also require structural flexibility. Can you scale production quickly? Pivot suppliers? Adjust transportation routes in real time? All of that depends on data, collaboration, and proactive planning.

How do you maintain flexibility while also managing tariff pressure?

Agility starts with a mindset shift—one that looks beyond tariffs to include upstream material costs, logistics fees, and tax implications. According to PwC’s 2025 Pulse Survey, 58% of executives have taken steps to diversify suppliers, and 54% are actively assessing tariff impacts—two critical moves that support resilience under cost pressure.

Many top-performing companies are combining quick tactical decisions with longer-term strategic planning to stay competitive in a volatile policy environment. That kind of agility requires cross-functional coordination. Too often, companies silo these issues within procurement or tax, but real results come when operations, finance, legal, and trade compliance work together. Otherwise, solving one issue can create three new ones.

How does technology help in an increasingly complex environment?  

From demand forecasting to logistics tracking to supplier risk analysis, AI is becoming the connective tissue of modern operations - 57% of leaders have already integrated AI and 98% of those say it’s creating value.

Other tools are proving to be equally impactful. Digital twins, scenario modelling platforms, and even gamified learning systems are all proving effective—especially when used together. Less than a third of companies use gamification or certifications for their workforce, but among those that do, about half say it’s been very effective. These capabilities help build a workforce that’s not just digitally fluent—but change-ready.

The lesson is that, n a world of constant disruption, the goal isn’t just to have the best tech—it’s to have the most usable, scalable, and strategic tech stack, know how to use it and the data it produces. That’s how you navigate uncertainty and come out stronger on the other side.