Williams-Sonoma: Systems Approach to Mitigating Tariffs

Williams-Sonoma: Systems Approach to Mitigating Tariffs

Williams-Sonoma is engaging in efforts to mitigate the impacts of tariffs on imports from Chinese production.

In addition to pulling shipments forward to beat the tariff this summer, the company will reduce China sourcing by 50% in 2020. Williams-Sonoma will expand its manufacturing operation in factories in Tupelo, Mississippi.

The mitigation helps Williams-Sonoma avoid raising prices by 11%.

Video Spotlight: Williams-Sonoma CEO: Dodging Tariffs on China

This post is based on the Supply Chain Dive article, Williams-Sonoma will halve China sourcing in the next year, by Emma Cosgrove, June 4, 2019; and the YouTube video, Williams-Sonoma CEO: Dodging Tariffs on China, by  Mad Money | CNBC, May 14, 2019. Image source: Shutterstock / RomanR

Discussion Questions:

1. What are the factors that drive Williams-Sonoma’s decision to halve the amount of goods it sources from China?

Guidance: Chinese tariffs make it more costly for Williams-Sonoma to outsource its production to China. The company has been shifting its production from China to Vietnam, Indonesia, Thailand, and Cambodia to lower production cost. The company will also expand its factories in Tupelo, Mississippi to produce in-house.

2. What considerations go into Williams-Sonoma’s capacity strategy?

Guidance: Williams-Sonoma adopts Continue reading