The Hidden Costs Of Tariffs: How Automation And ERP Can Help

Tariffs function as taxes on imports and no matter what big or small they are, they always drive up costs for all businesses. For small and midsize businesses (SMBs) already stretched thin by labor shortages and inflation, every new regulation adds another layer to manage. 

At the surface, it may seem that the increase in import costs is the biggest hit to a business’s bottom line. But look closer, the true cost of tariffs goes much deeper, like: 

• More paperwork and time – Tariffs come with rules that take time to track and follow, which can mean hiring extra help or pulling focus from other work.
• Supplier headaches – You might have to find new suppliers fast, which can cause delays and make things more expensive or complicated.
• Too much money stuck in inventory – To avoid price spikes or shortages, businesses may buy more than they need. That ties up cash and fills up storage.
• Costly product changes – If you switch to local materials to dodge tariffs, it often means redesigning products, which takes time, resources, and money.
• Harder to sell overseas – Higher prices from tariffs can make your products less appealing in global markets, hurting sales.
• Customer pushback – To offset higher tariffs, you may need to raise prices which risks losing customers or getting priced out of the market.
• Increased vendor costs – Some suppliers may proactively increase fees on their goods in anticipation of tariff changes.  

While these challenges are concerning, they are not unfamiliar to SMBs who have dealt with market disruptions like tariffs for quite some time. Some companies find themselves stuck reacting to the changes, but those who use ERP and automation are proving to be most resilient during these times. The right technology tools take repetitive tasks off your team’s plate, cut down on mistakes, and keep operations moving. When the ground keeps shifting, automation is what keeps a business standing. 

Enterprise Resource Planning (ERP) systems provide a connected backbone for business operations, and the addition of automation brings strategy to life. It moves your organization from using technology to support basic functions and toward using it for true operational intelligence.  

ERP solutions provide visibility and connection between business functions that independent systems just can’t deliver. But they don’t just centralize information—they act on it, triggering workflows, surfacing insights in real time, and ensuring that critical information is both accurately documented and dynamically executed.  

This kind of visibility empowers teams to respond faster and make smarter decisions. Even better, it can extend your ERP’s power by automating critical business processes like data entry, invoice processing, purchase orders, order fulfillment, inventory updates, report generation, and the list goes on.  

By automating the capturing of data and validation, ERP systems can reduce the risk of errors associated with manual entry, leading to more reliable business data and improved compliance. In many ERP systems, you can also set up triggers to notify you if inventory is low, a quality control step was missed, or even if a customer is late on their payments.  

Imagine trying to manage all these tasks by hand. It makes things hard for small and midsize businesses like yours. Even small changes can take days to communicate the shift among different teams, making staying on the same page tough as nails. Don’t spend time reacting instead of planning. It adds up fast. 

To stay ahead, use automation within ERP tools to solve some of the pesky issues tariffs present, like: 

• Take a fresh look at your supply chains and try to spread things out so you're not relying so heavily on countries hit with steep tariffs.
• Be proactive. Use automation to manage supply and demand. You can do this with smart inventory planning tools that use real-time data to avoid overstocking, tariff-driven delays, and price hikes.
• Use automation tools to speed up accounts receivable, reduce invoicing errors, and free up cash so you're not caught short during times of disruption. 

Let the stats tell the story. A McKinsey study found that businesses with real-time visibility into operations make decisions 5x faster and are twice as likely to hit growth targets compared to their slower-moving peers. 

As Laura Baumann, vice president of product management at ECI put it in a recent Smarter Operations webinar: 

“Automation gives your team the gift of time. And that time lets you focus on higher-level planning, vendor negotiations, and customer communication.” 

Things are tight. Everyone's gotta run lean. Use the time you get back to find better suppliers, cook up the next thing, or keep the important relationships going strong. 

Southern Development Homes, a Virginia-based builder managing four communities, faced challenges in updating pricing across numerous home models due to rising material costs. Traditionally, this process was time-consuming and prone to errors. By implementing ECI's MarkSystems ERP software, they streamlined this task significantly.  

Ken Gill, the company's estimator, highlighted their newfound efficiency: 

“There are a few enhancements ECI made to the MarkSystems recently that are really good. One is when there is a price change, you can update it with a click of a button. This capability is especially important now when the lead times are so long. We had to update more than 4,000 prices. With MarkSystems, we were able to update them for all four communities in three minutes.” 

Beyond pricing, the implementation of MarkSystems enabled Southern Development Homes to increase their annual build rate by 150% without expanding their team, demonstrating the power of automation in scaling operations efficiently.