In a shift­ing glob­al trade envi­ron­ment, tar­iffs have become a focal point of chal­lenge for the con­sumer prod­ucts indus­try, with impli­ca­tions span­ning sup­ply chain dis­rup­tion, prof­itabil­i­ty risk, and mount­ing com­pli­ance oblig­a­tions, among many others.

These com­plex­i­ties anchored the recent ASUG Com­mu­ni­ty Con­ver­sa­tion, ​“State of the Con­sumer Prod­ucts Indus­try: Nav­i­gat­ing Tar­iffs,” where SAP lead­ers shared data-dri­ven frame­works for man­ag­ing tar­iff volatil­i­ty through insight, plan­ning, mit­i­ga­tion, and oper­a­tional execution.

The ses­sion fea­tured John Buck­ley, Con­sumer Prod­ucts Indus­try Advi­sor at SAP; Sudy Bharad­waj, Glob­al Vice Pres­i­dent of Strate­gic Engage­ments at SAP; Michael Scott, Solu­tion Advi­sor for Finance at SAP Ana­lyt­ics Cloud; and Jon Dean, Senior Direc­tor of Finance Cen­ter of Excel­lence at SAP. Through live demon­stra­tions, polling, and dis­cus­sion, the con­ver­sa­tion revealed a wide­spread recog­ni­tion of tar­iff impact and a clear gap in how com­pa­nies are responding.

A ​“Once-in-a-Life­time” Disruption

Open­ing the ses­sion, Buck­ley drew a his­tor­i­cal par­al­lel between the chal­lenges busi­ness­es faced dur­ing the COVID-19 pan­dem­ic and those they are cur­rent­ly deal­ing with. ​“In 2020, many of our cus­tomers said this is a once-in-a-life­time chal­lenge… But then you fast-for­ward into 2025. We’re now faced with anoth­er busi­ness chal­lenge that is of equal size and maybe even more impact­ful to our prof­itabil­i­ty,” explained Buckley.

That sense of rel­e­vance was echoed in the first audi­ence poll. When asked if tar­iffs were impact­ing their busi­ness, near­ly all view­ers were affect­ed — with 55% report­ing ​“mod­er­ate impact,” fol­lowed by 25% expe­ri­enc­ing ​“high impact,” and only 5% select­ing ​“no impact.”

Buck­ley not­ed that tar­iffs have become a fre­quent top­ic across cus­tomer con­ver­sa­tions, under­scor­ing that the issue is not iso­lat­ed but sys­temic. ​“The size of the tar­iffs is large. It’s impact­ing our busi­ness­es more than what it did in the past. There’s a lot of con­fu­sion,” he said.

Recent hikes — like steel tar­iffs jump­ing from 25% to 50% — have com­pound­ed the urgency for respon­sive plan­ning. ​“No one has a crys­tal ball,” Buck­ley added, ​“but we know we need to plan for it.”

Vis­i­bil­i­ty Through Analytics

The sec­ond poll revealed that only 4% of atten­dees report­ed hav­ing clear insights into how tar­iffs are impact­ing their busi­ness, while the rest said they respond­ed ​“some­what” (62%), ​“no” (23%), and ​“not sure” (12%).

As mod­er­a­tor and ASUG Com­mu­ni­ty Engage­ment Lead Eliz­a­beth Tuck­well not­ed, this sug­gest­ed that ​“much ambi­gu­i­ty is sur­round­ing this top­ic” and ​“we’re all in the same sort of mud­dy area.”

To address that clar­i­ty gap, Bharad­waj intro­duced Val­ue Ana­lyt­ics, a con­tent pack­age that helps orga­ni­za­tions strug­gling with inbound sup­ply chain mate­ri­als by improv­ing resilience, pro­vid­ing action­able intel­li­gence, and deliv­er­ing quick wins with­out lengthy imple­men­ta­tions. Built on SAP Busi­ness Tech­nol­o­gy Plat­form (BTP) and ini­tial­ly devel­oped dur­ing COVID, the tool now helps com­pa­nies assess tar­iff expo­sure using core ERP data.

Because most com­pa­nies don’t con­sis­tent­ly track coun­try-of-ori­gin data, the tool defaults to using ship-to loca­tion as a proxy. Inter­ac­tive heat maps allow users to ana­lyze expo­sure by sup­pli­er, mate­r­i­al, or site.

An AI-enhanced pro­to­type goes fur­ther by iden­ti­fy­ing high-impact spend­ing areas through intel­li­gent scan­ning and pri­or­i­ti­za­tion. The tool uses pre-pass ana­lyt­ics to effi­cient­ly nar­row down mas­sive datasets, for instance, iden­ti­fy­ing $300 mil­lion of action­able spend with­in a $10 bil­lion port­fo­lio, focus­ing teams on the most impact­ful opportunities.

Those insights feed into a pro­to­type assis­tant that cal­cu­lates the effec­tive cost per unit based on tar­iffs, lead times, ful­fill­ment per­for­mance, and logis­tics data.

Plan­ning Under Volatility

When asked if they were con­duct­ing prof­itabil­i­ty sce­nario plan­ning in response to tar­iff volatil­i­ty, an addi­tion­al poll revealed that the top audi­ence response was ​“not sure” (48%), fol­lowed by ​“no” (39%), with only 13% say­ing ​“yes.” These results val­i­dat­ed the need for bet­ter tools and more proac­tive modeling.

Michael Scott walked through how SAP Ana­lyt­ics Cloud (SAC) address­es that gap. He demon­strat­ed how teams can sim­u­late tar­iff changes, run Monte Car­lo fore­casts, and use gen­er­a­tive AI to accel­er­ate what he called ​“the con­stant pur­suit of unat­tain­able perfection.”

SAC allows users to cre­ate pri­vate ver­sions of fore­casts and col­lab­o­rate in small teams to mod­el assump­tions with­out affect­ing offi­cial num­bers. These ver­sions can be iter­at­ed and selec­tive­ly pro­mot­ed into pro­duc­tion as needed.

Users can adjust tar­iff assump­tions in real time and assess impacts across the cost of goods sold, mar­gin, and revenue.

A Frame­work for Strate­gic Mitigation

The audi­ence indi­cat­ed that some of their com­pa­nies are already tak­ing action — though often with­out strate­gic align­ment, a fourth poll revealed. Lead­ing adjust­ments includ­ed ​“pric­ing strate­gies,” fol­lowed by ​“sup­pli­er strate­gies” and ​“pro­duc­tion loca­tion.” There were no respon­dents who said tar­iffs had no impact on their actions.

Bharad­waj respond­ed by out­lin­ing a con­cep­tu­al demo link­ing insight to action through a three-phase frame­work: Insights → Plan → Action. It begins with an AI-dri­ven alert that flags pro­cure­ment devi­a­tions. Heat maps then pin­point where tar­iff expo­sure is con­cen­trat­ed. From there, SAP’s cat­e­go­ry man­age­ment tools enable col­lab­o­ra­tive plan­ning and coor­di­nat­ed response.

Even orga­ni­za­tions with less mature sourc­ing pro­grams can use the plat­form to pri­or­i­tize where to act first, espe­cial­ly when mul­ti­ple plants or com­po­nents are affected.

“Joule is say­ing, you know what? I think you had a goal of sup­pli­er diver­si­ty. Should we include that? That’s not in this tem­plate today,” he explained.

Bids are then com­pared across tar­iff impact, qual­i­ty, lead time, and cost.

“We’re not say­ing, hey, as soon as tar­iff changes, change all your sup­pli­ers. We’re say­ing, let’s get the insights, devel­op a plan, and take action in an order­ly man­ner,” said Bharadwaj.

Oper­a­tional­iz­ing Compliance

The final poll showed that most atten­dees were only ​“mod­er­ate­ly con­fi­dent” (44%) in their company’s tar­iff com­pli­ance, with 28% being ​“high­ly con­fi­dent,” 22% stat­ing ​“don’t know,” and 6% being ​“not con­fi­dent at all.” This led to Jon Dean’s pre­sen­ta­tion on SAP Glob­al Trade Ser­vices (GTS).

“SAP has an end-to-end capa­bil­i­ty to man­age your inter­na­tion­al trade activ­i­ties,” said Dean.

GTS stream­lines clas­si­fi­ca­tion, com­pli­ance checks, bond­ed doc­u­men­ta­tion, duty cal­cu­la­tions, and cus­toms sub­mis­sion — func­tions many com­pa­nies still per­form man­u­al­ly. This lack of automa­tion, Dean warned, leads to poor vis­i­bil­i­ty and trace­abil­i­ty, risk­ing fines, delays, and rev­enue leak­age from mis­cal­cu­lat­ed tariffs.

Designed for com­plex glob­al oper­a­tions, GTS inte­grates native­ly with ERP, trans­porta­tion, and ware­house sys­tems and con­nects direct­ly with nation­al cus­toms author­i­ties. It sup­ports ECC, S/4HANA, or hybrid envi­ron­ments, offer­ing flex­i­bil­i­ty across deploy­ment mod­els. Cus­tomers ben­e­fit from hard-dol­lar sav­ings through improved accu­ra­cy, faster pro­cess­ing, and reduced labor effort.

Dean not­ed SAP’s ongo­ing invest­ment in GTS, includ­ing AI tools for clas­si­fi­ca­tion map­ping, which are planned for the 2025 release.

Buck­ley closed by remind­ing par­tic­i­pants that while tar­iffs are the cur­rent chal­lenge, they won’t be the last. ​“There is going to be anoth­er one. A lot of the things that we shared with you today are going to be applic­a­ble to what that next future is,” he said.

Con­nect with the ASUG Con­sumer Prod­ucts Com­mu­ni­ty, and join the next Com­mu­ni­ty Con­ver­sa­tion. Vis­it the ASUG mem­bers group to con­tin­ue the dis­cus­sion and access addi­tion­al resources.