Most manufacturers can’t pass every cost increase down the line — so the real work is seeing your true cost to serve before it hits the P&L.
Your raw material costs went up again this quarter, and now you’re deciding how much of it your customers will accept on the next price sheet. Reshoring keeps showing up in the headlines as the answer, but moving a supply chain takes years you don’t have and capital you’d rather spend elsewhere. The cost pressure is here today, and so what can you do to prevent margin erosion?
The Reshoring Story Doesn’t Match the Math
There’s a gap between what the headlines say manufacturers are doing and what they’re actually doing. Despite the push to bring production home, 64% of manufacturers say they don’t intend to move production to the U.S. to avoid tariff costs. Reshoring is expensive, slow, and hard to reverse if the policy landscape shifts again.
That doesn’t mean manufacturers are standing still. It means the practical work is happening somewhere else: in pricing, in sourcing, and in getting a clear picture of what each product actually costs to make and ship. The companies handling this well aren’t relocating factories. They’re tightening up how they see and manage cost.
When You Can’t Pass the Cost Down the Line
Raising prices is the obvious response, and most manufacturers are doing some version of it. Survey data shows 86% plan to pass on at least some of their tariff-related cost increases, and 32% plan to pass on all of it. While passing it on is a plan, it’s not a guarantee. Plenty of manufacturers find their customers won’t absorb a full increase, and the difference comes straight out of margin.
This is where gut-feel pricing starts to hurt. If your cost model still uses last year’s assumptions, you’re setting prices against numbers that no longer reflect what you pay. You need to know — by product, by customer, by order — where you have room to hold margin and where you’re already underwater.
Dynamics 365 Turns Landed Cost Into a Decision You Can Make in Time
Rising input prices are now the dominant concern on the floor. In a Q2 2026 survey, 83.1% of manufacturers named raw material costs their top business challenge, up sharply from 57.5% the quarter before. And the cost isn't just the material. It's freight, duties, tariffs, handling, and the expedited shipment you didn't plan for — the true cost to serve that rarely shows up in one place. When that information lives in spreadsheets outside your system, you're always a step behind it.
Dynamics 365 closes that gap by capturing landed cost as part of the transaction — material, freight, duty, and tariff rolled into the real cost of the item — so the number you price against is the number you actually paid. From there it stops being a record and becomes a lever. When a supplier raises prices or a new tariff lands, you can model the change inside Dynamics 365: run the what-if, see the margin impact across affected products, and decide where to adjust price, switch sourcing, or hold the line. The 2026 updates to Dynamics 365 Supply Chain Management push this further, with planning that ties demand to price and protects committed delivery dates when supply shifts. That's the difference between reacting to a margin problem at quarter-end and seeing it form in time to do something about it.
Supplier Flexibility Without Rebuilding Everything
Single-source dependence is its own kind of risk in a tariff environment. The fix isn’t reshoring — it’s having more than one viable supplier and being able to see, quickly, what switching actually costs you. With supplier and cost data in one system instead of scattered across teams, you can compare landed cost across vendors, qualify alternates before you need them, and move without guessing. You don’t have to rebuild your supply chain to get more flexible. You have to be able to see it clearly.
Where Western Computer Fits
Tariffs and input costs aren’t a problem you solve once. They’re a condition you manage — and managing them well comes down to whether you can see your real costs in time to act on them. Western Computer has spent 37+ years and more than 1,750 implementations helping manufacturers get that visibility out of spreadsheets and into a system they own and run themselves.
If margin pressure is forcing harder pricing and sourcing calls than it used to, it’s worth a conversation about where better cost visibility would help most.
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