Supply Chain Resilience for Greater Long-Term Performance

Geopolitical risk is currently one of the biggest threats to global supply chains, which are highly dependent on international trade routes, foreign manufacturing and cross-border coordination. Political events in one region can create ripple effects across industries worldwide.

Recent events such as U.S.-China trade tensions, the Russia-Ukraine conflict and Red Sea shipping disruptions exposed vulnerabilities in global supply networks.

The effects of supply chain challenges are delays, rising costs and revenue losses. In 2025, supply chain disruptions cost global businesses approximately $184 billion annually.1

Supply chain resiliency is critical.

In a recent American Productivity and Quality Center (APQC) poll, 50% of respondents said geopolitical risks and global trade will be a major impact on their supply chains over the next three years.2 Supply chain resiliency is essential for businesses that want to minimize disruptions, meet customer demand and achieve business objectives.

Proactively managing geopolitical risks better positions enterprises to maintain operational continuity, protect profitability and respond quickly to market disruptions. To increase supply chain resilience, companies are prioritizing supplier diversification, flexibility in operations and preemptive risk management strategies to respond to supply and demand dynamics despite current economic uncertainty.

Focus on seven key techniques to improve supply chain management.

Reducing or eliminating missteps and surprises is key to building a more resilient supply chain. Seven practical steps increase supply chain visibility, risk management and planning to help organizations respond more effectively to disruption.

1. Develop a model for geopolitical scenario planning.

   Examining various scenarios will help prioritize production and inventory, so that you can appropriately allocate resources to meet the needs of high-value customers and partners. Leading corporations now incorporate geopolitical stress testing into enterprise risk management which helps companies prepare for such major events as:
   • Tariffs and trade restrictions
   • Sanctions escalation
   • Military conflicts
   • Port closures
   • Energy crises
   • Infrastructure cyberattacks
   • Labor disruptions
   • Regulatory changes and export controls
   
   Businesses should develop contingency plans for each major risk scenario, including alternative suppliers, transportation routes and production sites. Organizations that prepare in advance can respond more effectively when disruptions occur.

2. Diversify suppliers and manufacturing locations.

   Sixty-five percent of businesses experience at least one bottleneck in their supply chains.3 Even one broken link throws everything downstream into disarray. Supplier diversity keeps operations running more efficiently. When businesses connect to multiple vendors, who are ideally located in various geographic locations, they can better manage raw materials and components availability and distribution, increasing supply chain resilience.
   
   Tim Dewald, director of supply chain at Hercules Inc., found that multiple partnerships reduced the company’s reliance on China and helped them compete against larger businesses. Before the pandemic, the outdoor amenities manufacturer, already had strong relationships with partners in Mexico. Exclusive production agreements allowed Hercules Inc. to send underutilized equipment to manufacturing partners there.
   
   “We are ahead of the curve in near-shore sourcing. In one U.S. facility, a product was 95% sourced from China and five percent from Mexico in 2018. Today, the numbers are reversed — 95% Mexico, five percent China,” says Dewald. The relationship also helped Hercules Inc. avoid 301 tariffs, reduce ocean freight and cut transit times from weeks to days.4
   
   Like Dewald, corporations are adopting “China Plus One” strategies which expands production into countries such as Vietnam, India Mexico or Thailand, while maintaining some operations in China.
   
   Regional diversification and nearshoring help companies maintain continuity when disruptions occur in a specific country or trade corridor.

3. Understand and prepare for currency conversion.

   If your network includes global suppliers, you’ll need to make payments in multiple currencies and that carries risk. For example, if you’re buying from an overseas supplier in one currency, that supplier could be buying from a vendor in another currency to make their products. This indirectly exposes you to increased foreign exchange liability, which suppliers will likely pass on to you in higher costs.
   
   If you source raw materials from a country where the local currency appreciated against the US dollar, it can be difficult to switch to a supplier in another country where the exchange is more favorable. This also applies to countries that apply tariffs unexpectedly.
   
   The simplest foreign exchange risk management strategy is to exclusively make and receive payments in your own currency. However, there are risks to this approach as well.
   
   
   • You could pay higher prices if suppliers with different native currencies time their payments to take advantage of exchange rate volatility.
     
     
   • If you receive only US dollars internationally, you might lose customers to competitors who offer dual currency invoicing.
     
     
   • You could inadvertently absorb vendor costs to convert US dollars to their local currency. This could also happen downstream.
   
   Increasing costs of materials globally is a significant factor in production. So, it’s important to understand currency conversion, specifically costs and risks that might be involved.
   
   David Grimaldi, foreign exchange sales consultant, Synovus Treasury Management, believes structuring payments advantageously can create a hedge against foreign exchange volatility and enable your company to make decisions with more certainty. “Dual currency billing, forward contracts and multicurrency accounts are good ways to manage foreign currency exposure risks and reduce the uncertainty of dealing with foreign exchange in the supply chain,” Grimaldi says.

4. Increase collaboration across the organization.

   Fifty-three percent of respondents to the APQC survey said lack of internal and external collaboration is an obstacle to improving the supply chain.5 “It’s not only important to have contingency plans, but also to work across the entire business to connect appropriate people, resources and tools,” says Tom Loffredio, managing director, Synovus Capital Markets.
   
   Developing a cohesive internal strategy that includes Treasury, Procurement, Finance and Product Development to analyze the supply chain and its implications in other areas of the business is essential to increasing supply chain resiliency. These teams provide valuable insights on materials, manufacturing costs, and schedules that could affect profitability.
   
   “Working with these internal groups, Finance can determine how to fund purchases and mitigate price variability to reduce uncertainty, including hedges on commodity inputs,” Loffredio says.

5. Invest in technology for increased supply chain visibility and security.

   Only 23% of supply chain leaders have a formal AI strategy.6 The inability to demonstrate a return on investment likely contributes to the reluctance. However, advances in artificial intelligence (AI) and machine learning augment industry software, enabling businesses to manage the supply chain from end to end. For example, unlike traditional automation, agentic AI adapts to shifting conditions — autonomously analyzing data, making decisions and acting in real time across procurement, inventory, logistics and supplier management. It also uses market trends, weather, economic signals and customer behavior to improve demand forecasting, reducing stockouts and excess inventory.
   
   In logistics, agentic AI optimizes routes, schedules and modes to cut costs and boost efficiency, while improving responsiveness to disruptions. The technology continuously monitors suppliers for performance, financial and disruption risks and recommends alternate sources. Agentic AI also links data across ERP, warehouse, transportation and supplier systems, and delivers end-to-end visibility and faster, more resilient decisions. Companies such as Amazon, Walmart and DHL increasingly use AI-driven supply chain orchestration to improve efficiency, lower costs and strengthen resilience.

6. Reduce supply chain losses with AI detection and prevention.

   With high transaction volumes and values, fraud is a recurring problem impacting the supply chain. Supplier due diligence, end-to-end traceability (e.g., audits and serialization), segregating duties and continuously monitoring transactions for anomalies help to prevent fraud.
   
   Progressive data analytics, inherent to AI and machine learning, also pinpoints suspicious orders, payments, billing and other potentially fraudulent activities. AI agents can also collaborate with other systems to flag suspicious behaviors in real time, enabling faster responses to emerging threats.

7. Carefully oversee cash flow, liquidity and risk.

   Liquid assets are critical to the supply chain. Yet, 43% of APQC survey respondents are experiencing budget constraints.7 Carefully managing cash flow ― from operations, investing or financing ― ensures there is adequate liquidity to meet your organization’s financial needs.
   
   While covering daily expenses might be the immediate focus, leaders must consider future capital needs, even if with shortened project timelines. Martin Puleo, chief financial officer at Struktol Company of America, believes agility is necessary in a fluctuating economy. Two years ago, under Puleo’s leadership, Struktol shortened its financial forecasting to a rolling 18 months instead of the traditional three-to-five-year period. “Even the 18-month forecast has high volatility — both in cost and revenue — that causes us to make short-term decisions that will impact long-term development,” he says.8
   
   Barbara Mulligan, director, Alabama region, Synovus Middle Marketing Banking concurs. “Many businesses are now focusing even just a few months out,” she says. “They’re looking ahead maybe four to six months so that they get some control over the short term.”
   
   Struktol’s long-term strategies now revolve around capital replacement. Puleo says, “ABL debt is an alternative for funding but with interest rates rising, you still may find affordable funding with a credit line without securing your AR and inventory. Also consider supply chain funding (discount your AR) as another liquidity source.”9
   
   “There are many solutions available to help hedge and stabilize rate exposure, such as interest rate swaps, and caps and collars,” Loffredio notes. Loffredio recommends including your company’s banking partner and financial advisor, as part of an internal team, to provide customized input and expertise on how to protect and preserve capital.

Strengthening insights, relationships and capital are the keys to a resilient supply chain.

Geopolitical risks are now a permanent part of the global economy. Corporations can no longer assume uninterrupted access to suppliers, transportation networks or international markets. However, business leaders can take steps to build a resilient supply chain. Detailed analysis provides vital business data, and advanced technologies will help to streamline operations and improve decision making, as well as reduce threats to the supply chain and costs.

Maintaining long-term global trading relationships means your organization’s risk exposure will require continual monitoring. Collaborate with suppliers and customers who understand and can assist in alleviating potential risks. If you need to increase liquidity or secure additional funding to accomplish these goals, we can help. For more information contact a Synovus Commercial Banker for details or stop by one of our local branches.