Raise Prices Now—or Wait? Supply Chains Caught in the Middle

🦋 The Butterfly Effect of Tariffs: Delayed but Inevitable

Both John and Nadim note that while the headlines have quieted, the impact of tariff policy is just beginning to materialize in operations and balance sheets. The typical 6- to 9-month delay between import decision and customer experience means companies are only now starting to see the consequences of early 2025 tariff maneuvers.

“It takes a while to play through… we may not feel the pain until August or September.” – Nadim Kilzi

The initial response to tariff risk was panic ordering—a rush to pull forward inventory in Q1. This led to an overordering hangover, where shelves are full, and demand has yet to catch up. Now, organizations are slowing additional orders, waiting to see if tariffs will be reversed or modified.

💸 Pricing Dilemma: Raise Now or Wait?

A central theme of the episode was the complexity of pricing strategy in a volatile environment. Most companies want to pass along rising costs—but are facing weakened pricing power due to softening demand and economic uncertainty.

“Nobody wants to take three price actions—they’re hesitating, waiting for clarity.” – John Church

This indecision is made worse by a lack of visibility into second- and third-tier supply chain costs. Companies may be feeling cost pressure now but are wary of multiple price increases that could erode customer trust or trigger volume declines.

🏭 From Playbook to Action: What Supply Chains Can Do Now

Rather than panic, experienced leaders are reaching for their downturn playbook. Nadim emphasized the importance of focusing on what can be controlled:

• Cost discipline

• Lead time optimization

• Service level maintenance

• Quality assurance

• Inventory rationalization

One specific lever discussed was SKU rationalization—typically a tough sell due to revenue risk, but now a necessary move in the face of rising cost pressure and operational inefficiencies.

“Now is the time to look at those SKUs that are pain points—and remove them.” – Nadim Kilzi

🏦 Cash Preservation vs Growth Investment

Both speakers underscored the rising cost of cash and the importance of preserving capital. With interest rates still elevated, inventory and CapEx carry heavier balance sheet implications than just a year or two ago.

“Cash costs a lot more today—now is the time to preserve it.” – John Church

Leaders are re-evaluating:

• CapEx plans: Can that new line or facility wait until next year?

• Inventory posture: Are there slow-moving or obsolete SKUs taking up space and working capital?

• Sales incentives: Can promotions or bundling be used to move dead stock?

Every dollar saved becomes strategic fuel for future moves when visibility returns.

📉 The Broader Economic Flywheel

Interestingly, the speakers pointed out that supply chain reactions—though necessary—can actually amplify economic slowdowns. Cutting CapEx, delaying orders, and holding back on hiring reduce activity across other sectors like construction, manufacturing equipment, and logistics services.

“As all of us cut spending and inventories, it tends to exacerbate the economic turndown.” – John Church

This insight serves as a reminder that supply chains are not just responders—they’re economic drivers, and their caution can become self-fulfilling if not managed carefully.

🧠 Final Takeaways: Be Nimble, Stay Focused

This is not an existential crisis—it’s a classic supply chain challenge. And with the right approach, it’s navigable.

“This is the playbook—we’ve seen this before.” – John Church

Here’s what leaders should keep top of mind:

• Stay nimble. Macroeconomic conditions are evolving rapidly—especially for multinational companies.

• Stay close to the data. Monitor demand shifts, inventory turns, and supplier signals tightly.

• Execute on fundamentals. Now is not the time for flashy moves, but for operational precision.

• Turn adversity into advantage. Downturns are moments when resilient companies outpace competitors.

“Every disruption creates opportunity—if you’re ready for it.” – Nadim Kilzi