Navigating Trade Turbulence with Contract Intelligence: Insights from a Procurement Masterclass

In an era defined by tariffs, trade wars, and global uncertainty, procurement leaders face more complexity than ever before. In a recent webinar, Bernadette Bulacan, Chief Evangelist at Icertis, sat down with Shashi Mandapaty, former Chief Procurement Officer at Johnson & Johnson, to unpack the evolving landscape of procurement and how organizations can not only navigate the current volatility but also future-proof their operations.

With a 25-year career spanning multiple continents and industries, and oversight of more than $30 billion in end-to-end operations, Shashi brings a uniquely global and strategic perspective to the table. Their conversation provided both a reality check and a roadmap for procurement professionals navigating today’s volatile terrain.

The Bigger Picture: Tariffs in Context

Bernadette kicked off the discussion with a look at the growing concern around tariffs, noting that over 30% of firms now cite them as a top pain point. Shashi was quick to reframe the conversation.

Over 30% of firms now cite tariffs as a top pain point 

“Don’t get caught reacting to every headline,” he cautioned. “The world is evolving.”

He reminded listeners that the U.S. has largely benefited from frictionless trade since the mid-1990s—an era now being disrupted by pandemics, geopolitical tensions, and commercial policy shifts. Preparedness, not panic, is key.

The Hidden Costs of Tariffs

While tariffs often dominate headlines due to their immediate cost implications, Shashi emphasized the “4D chess” playing out beneath the surface. Tariffs don’t just inflate prices, they ripple across the global supply chain:

• Currency Fluctuations: Volatile exchange rates can impact profitability more than the tariffs themselves.
• Cascading Effects: Reduced demand and higher costs may force suppliers to downscale or pivot to other markets, triggering a domino effect of new trade barriers.
• Supply Assurance: Tariffs may lead to hoarding, inventory shortfalls, or even supplier insolvency making availability as critical as cost.

Industries feeling the strain include both consumer goods (where price hikes are direct and visible) and manufacturing (where raw material tariffs quietly squeeze margins and threaten volume stability).

A Resilience Playbook: Visibility, Flexibility, Redundancy

So how should procurement teams respond?

Shashi outlined a three-pronged strategy, one rooted in lessons from COVID and highly relevant in today’s climate:

1. Visibility: Know exactly what you’re buying, where it’s coming from, and who’s making it—including sub-tier suppliers and manufacturing locations.
2. Flexibility: Be ready to onboard alternative suppliers, shift production, and adjust supplier relationships based on current realities.
3. Redundancy: Avoid single points of failure by diversifying sourcing locations and maintaining buffer inventory even if it comes at a slightly higher cost.

All three strategies hinge on contracts as the critical foundation for proactive supply chain management.

Contracts: The Hidden Source of Intelligence

Shashi emphasized that contracts are not just legal documents, they're strategic tools. Procurement teams must be able to access, interpret, and act on the data within them.

Key clauses to focus on include:

• Cost Transparency: Understand price adjustment clauses, indexes, and cost exposures.
• Regulatory Compliance: Track manufacturing origin and Incoterms to manage duty implications.
• Strategic Flexibility: Reevaluate exclusivity agreements and volume commitments to maintain sourcing agility.

Force Majeure clauses also remain relevant, but now across cost, compliance, and flexibility concerns.

From Firefighting to Future-Proofing

To build sustainable resilience, Shashi encouraged organizations to invest in three foundational capabilities:

1. Product and Supplier Intelligence: Know what you buy and from whom, down to the bill of materials and engineering specs.
2. Contract Clarity: Ensure contracts are both readable and actionable, capturing not just terms, but the intent behind supplier relationships. He said, “Leaders need to make sure to invest in the right capabilities to not just have contracts in one place, but to mine them in the most efficient manner and to have those insights ready as they get into discussions with suppliers.”
3. Orchestration: Establish “control towers” for supply chain and procurement that enable strategic oversight across global operations.

These investments shift procurement from reactive to strategic, turning contracts into a source of competitive advantage. 

Silver Linings Amid the Storm

While trade turbulence poses real risks, Shashi sees two key opportunities:

• A Stronger Business Case for Resilience: Leaders now understand the value of preparedness, making it easier to fund initiatives that once struggled to get traction. “The silver lining to all of this is that we don’t need to do a TED talk with our CFO to get this approved,” Shashi said. “Building the infrastructure and getting the financial case approved with the leadership in the company is a lot easier now than it was a few years back.”  
• Smarter Reshoring with Automation: Suppliers looking to re-site manufacturing are increasingly turning to automation and robotics, enabling cost-effective, localized production.

Conclusion: Lead with Intelligence

Bernadette closed the session by reiterating the importance of contract intelligence as the backbone of procurement strategy in turbulent times.

“If data is the fuel, contracts are the engine.”

In a world where disruption is constant, organizations that understand their contracts—and use that knowledge to make informed, agile decisions—will emerge stronger and more resilient.

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