Tariff conversations are everywhere in 2025, but the current supply chain landscape presents other challenges beyond the headlines. While tariffs do have a major impact on business operations, these discussions expose a more fundamental and costly disruption: the fragile state of the supply chain. Poor trading partner connections cost businesses an estimated $158 billion annually through inefficiencies, missed opportunities and excess inventory costs—losses that become magnified during times of uncertainty.

The urgency to address these gaps has intensified, with SPS Commerce noting a 264% increase in supply chain disruption conversations among retailers in recent weeks. As one retail executive candidly expressed, “We’re missing revenue due to frequent stockouts,” highlighting how a disconnected supply chain directly impacts the bottom line through lost sales and frustrated customers.

The collaboration challenge

Every retailer knows the frustration: despite best intentions and significant technology investments, supply chain collaboration consistently falls short of expectations. Research conducted by SPS Commerce in 2024 shows that only 20-30% of organizations see their trading partners fully adopt standardized processes.

The reason collaboration breaks down isn’t a mystery; it follows predictable patterns that compound during disruptions. Trading partners become disoriented when they lack clarity about expectations and requirements. Without comprehensive vendor guides or clear processes, suppliers spend more time figuring out what to do than actually doing productive work. This uncertainty creates costly delays and unnecessary errors.

Partners also become disengaged when they don’t see how their performance connects to shared outcomes or when they feel their efforts aren’t valued. When there’s no structured relationship management or collaborative approach to compliance, suppliers may go through the motions without genuine investment in your mutual success.

Finally, distraction fragments everyone’s attention. Without shared performance metrics and clear priorities, trading partners struggle to focus on what truly matters. Excessive back-and-forth communications, conflicting requests and constant firefighting prevent the deep focus necessary for reliable execution.

These three challenges—disorientation, disengagement and distraction—reinforce each other, creating compounding inefficiencies that cost retailers billions in lost opportunities. The everyday inadequacies we tolerate become dramatically worse during times of disruption, turning minor collaborative gaps into major operational failures.

Many companies have invested heavily in technology solutions yet still struggle with these fundamental connection issues. The reason? Technology implementation without addressing these core breakdowns creates digital islands rather than connected networks. The remedy is purposeful collaboration that provides clarity, engagement and focus.

Strategies that deliver results

The retailers making progress and seeing real traction within their supply chain:

• Create transparent expectations – Develop comprehensive vendor guides that all partners can access, eliminating “unwritten knowledge” that creates confusion.
• Show, don’t just tell – Rather than expecting partners to figure things out on their own, they provide specific tools and training focused on key processes.
• Measure what matters – Track adoption rates to identify which partners are following processes and which aren’t. By monitoring compliance, retailers can pinpoint specific gaps and focus their attention where it’s needed most.
• Have the tough conversations – Regular, data-driven performance reviews are replacing the blame game. When both sides can see the same objective metrics, conversations shift from “you’re not meeting our standards” to “here’s how we fix this together.”

The path forward

To capture these benefits, start with an honest assessment of your current supply chain health. Ask yourself:

1. How clear and accessible are your expectations for trading partners?
2. Are your partners equipped to meet these expectations?
3. Do you have visibility into actual adoption rates?
4. Are you measuring outcomes in ways that drive improvement?

The answers will reveal your highest-impact opportunity areas and help prioritize investments that deliver the greatest return.

Organizations that successfully address supply chain collaboration aren’t just reducing costs—they’re building the foundation for sustained competitive advantage. Through strengthened connections with trading partners, retailers improve inventory positioning, enhance forecasting accuracy and respond more quickly to changing demands.

Times of uncertainty have a way of revealing the true strength (or fragility) of supply chain relationships. The retailers who emerge stronger are those who’ve invested in purposeful collaboration before disruption hits.

SPS Commerce offers the Supply Chain Performance Suite to help companies establish clear expectations, monitor adoption and measure performance with analytics that drive improvement. By building resilient collaboration capabilities, companies can achieve sustainable cost reduction, revenue growth and margin improvement that withstands whatever obstacle comes next.

Want to learn how your organization can build more resilient supply chain collaboration? Learn about the solutions and resources that SPS Commerce offers.