Virtual Vertical Integration – The New Supply Chain Ecosystem Playbook

1. Tariff Instability Is the New Normal

The episode opened with a reflection on the latest trade developments—U.S. tariffs fluctuating dramatically, a temporary reprieve from the EU, and lingering uncertainty about what comes next. But unlike in past cycles, companies are no longer reacting with panic.

Today, many supply chain leaders are treating tariffs like any other variable cost: model it, monitor it, adapt. For better or worse, instability has become part of the operating landscape.

“This is going from an existential threat to just another thing we deal with.”
– John Church

The takeaway? Companies that have built more agile sourcing and planning models are weathering the turbulence without major disruption. Those that haven’t—still reliant on rigid structures and over-concentrated networks—are scrambling to catch up.

2. Resilience Starts with the Basics

In the face of global volatility, John made a compelling argument for getting back to the fundamentals: cash management, lead time optimization, service reliability, quality, and safety. These aren’t buzzwords—they’re the control levers that drive resilience and protect margin when external forces grow unpredictable.

As he put it, resilience isn’t always about big new strategies. Often, it’s about consistency and control in the things we can manage.

“Let’s stick to our knitting… the things that bring us back home.”
– John Church

It’s a timely reminder: even in the age of AI, the basics still matter.

3. Ecosystem Thinking Is Gaining Ground—Slowly

Both John and David reflected on a recent Masters Roundtable where executives shared real examples of ecosystem-building: from cross-enterprise planning to shared logistics hubs. There’s growing appetite to move beyond transactional supplier relationships and toward true partnerships based on trust and shared data.

But while ambition is high, progress is uneven. Most companies are still grappling with governance challenges, data-sharing fears, and the difficulty of aligning objectives across organizations.

“Everyone’s working on it—but no one’s cracked the nut yet.”
– David Warrick

The roadblocks? Misaligned incentives, legacy systems, unclear data boundaries, and a lack of repeatable playbooks. But the desire to solve these is real—and growing.

4. Virtual Vertical Integration Is the New Target

In the past, vertical integration often meant acquisition: buying suppliers or logistics providers to ensure control. But in 2025, forward-thinking organizations are pursuing a new model—virtual vertical integration.

This strategy focuses on operational alignment without ownership, enabled by cloud-based platforms, AI, and clearly defined engagement models. It’s a faster, more flexible path to end-to-end visibility and coordination.

“You don’t need to buy the company to get the synergies.”
– John Church

With the right incentives, metrics, and trust structures, suppliers and customers can operate as extensions of each other—without ever merging balance sheets.

5. Visibility Without Purpose Falls Flat

David recounted a real-world experience: after years of investment into a best-in-class visibility platform, his team stood in front of the dashboard and realized… they hadn’t solved anything yet. The visibility was elegant, but lacked actionable context.

“We stood there proud and said… what problem have we just solved?”
– David Warrick

This was a pivotal moment in the conversation. Visibility itself isn’t the goal. Visibility that enables action, solves problems, and ties directly to outcomes—that’s what moves the needle.

It’s a cautionary tale for digital transformation leaders everywhere: don’t confuse the tool for the solution.

6. Start Small, Scale Smart

Perhaps the most important theme of the episode was the shift away from multi-year, monolithic transformation projects toward agile, use-case-driven implementation. As David noted, supply chain professionals are often perfectionists—we want the big win, the 3-year roadmap, the total solution.

But that mindset can stall progress. Today’s leading organizations are succeeding by doing the opposite: solving one small problem at a time, showing value, and building momentum.

“You’ve still got to start. Start with one use case—and then scale.”
– John Church

As John said, the agility we want in our operations needs to be mirrored in our transformation approach. Solve for one. Then another. Then stitch them together into something scalable and powerful.

Final Thoughts: From Vision to Execution

The dream of a connected, collaborative, AI-augmented supply chain ecosystem is not new—but the mindset to deliver it is finally shifting.

What John and David make clear is that you don’t need to own your ecosystem—you just need to align it. This is the essence of virtual vertical integration: shared purpose, intelligent design, and trust built on real use cases, not just vision decks.

The companies that will win in this new model will be those that:

• Think big, but start small,

• Use AI to extract value—not just complexity,

• And treat ecosystem-building as a strategic capability, not just an IT project.

It’s not about building the supply chain of the future overnight.
It’s about building it one high-value, well-governed connection at a time.