The telecom sector fosters economic growth and supports national security. Anything that affects it should be a concern. The current wave of US import tariffs, ranging from 25% to 145% as of April 2025,[i] will significantly impact Network Equipment Providers (NEPs) in the telecom sector. This will hurt US consumers by making broadband deployment more expensive, increasing operating costs, delaying the adoption of strategic technologies such as 5G, and slowing down innovation. How NEPs respond to the fluid trade conditions is critical to consumers and businesses that rely on connectivity. A realignment of supply chain strategy should be at the core of their response to tariffs. A Gartner study across industries shows that 74% of Chief Supply Chain Officers (CSCOs) view the new US tariffs as a “catalyst for significant strategy change” to enhance overall resilience.
The imperatives, outcomes, and challenges
The developments around tariffs spell out the need for supply chain agility, mainly through a focus on analytics. NEPs that have a clear view of their orders, inventory, supplier readiness, logistics, and delivery dates are ahead, but they now need to take five quick steps:
1. Have the data and the analytical models for scenario planning: Analytics helps explore a variety of predictable and unpredictable scenarios around fluctuating costs, margins, and supplier viability, delivering accurate risk analysis before they impact the supply chain. This allows leaders to quantify trade-offs and evaluate alternative sourcing strategies in real time. By leveraging predictive and prescriptive analytics, organizations can proactively identify vulnerabilities, model the impact of various tariff scenarios, and improve inventory positioning and supplier diversification in response to the increasingly volatile global trade environment. The challenge before NEPs today is extraordinary. The first step—having the data, analytical models, and scenario planning in place—is urgent and inevitable. Additionally, NEPs can inject AI into their systems, giving CSCOs and Chief Information Officers (CIOs) a new tool to work with to meet the challenges of the tariff regime. AI as a tool was unavailable earlier, and leaders in the NEP space will surely use it to improve their decision-making.
2. Integrating scenario planning with decision support systems: This allows the CSCO to switch contractors or use multiple contractors to fulfil orders quickly and confidently without violating regulatory requirements. Decision support systems enhance agility by providing real-time data aggregation and optimization tools, enabling NEPs to rapidly assess the feasibility and compliance implications of switching or adding contractors. This approach mitigates the risk of supply interruptions and empowers NEPs to manage complexity while maintaining supply chain flexibility.
3. Product and material redesign/substitution: It is possible to redesign products and components, which may result in attracting lowered tariffs and/or regulatory roadblocks. With this option, companies can minimize supply chain disruptions and optimize their cost-to-serve models by proactively substituting tariffed inputs with tariff-exempt or domestically sourced alternatives. Furthermore, product redesign can support regionalization strategies, enabling faster lead times and greater flexibility to meet customer demands and specifications, which is increasingly vital in a rapidly shifting global trade landscape.
4. Vendor diversification: The more significant challenge is shifting from the vendor consolidation strategy, which has worked for NEPs over the last decade, to vendor diversification. This shift entails an increased volume of negotiations, contracts, quality checks, complex logistics, and flawless communication.
5. Integrate Enterprise Resource Planning (ERP): An optional (but wise) step would be to integrate the existing ERP into supply chain systems. ERP serves as an underlying platform for supply chains. Integrating with supply chains offers Chief Financial Officers (CFOs) a better chance of optimizing costs. However, the integration presents challenges regarding data compatibility and migration (legacy systems often use different data formats and structures). Additionally, although ERP systems are comprehensive, they do not provide the specialized functionalities required by nuanced supply chain operations. The necessary modernization and customization could turn ERP into an unnecessarily complex system unless undertaken by a team with deep ERP and supply chain expertise.
Collaborating with technology integrators accelerates the deployment of these solutions, ensuring NEPs can adapt quickly. Ultimately, a data-driven approach empowers NEPs to make informed decisions, mitigate risks, and seize emerging opportunities in a volatile market.
Addressing the challenges of a diversified supplier ecosystem
Maintaining visibility across a fragmented multi-tier network of suppliers can be challenging. Tracking supplier readiness and risks becomes more difficult unless suppliers have digitized their systems and are willing to handshake with the NEP’s supply chain systems. Using assumptions instead of data and relying on traditional spreadsheets, emails, and phone calls can cause critical delays and failures to respond to dynamic and fast-developing environments.
Ultimately, multi-tier supply networks must become transparent so NEPs can identify hidden risks and significantly accelerate and streamline their qualification and onboarding processes. Not all suppliers may have the resources (or the willingness) to provide visibility into their manufacturing and partner networks. Nevertheless, close collaboration and a joint response are the only real long-term solutions for building supply chain resilience.
Uncertainty over tariffs doesn’t have to mean paralysis. NEPs should quickly move to reassess their supply chain strategies and include real-time data collection and advanced analytics – businesses that do so will have built a stronger foundation that derisks their operations in the long term.
