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.