When news broke that the Strait of Hormuz was under threat, the economic impact was immediate. The sea passage carries roughly 20% of global petroleum liquids. Ships were rerouted. Lead times blew up overnight, and inventory data that had been accurate on Monday was obsolete by Friday. For a large retailer with dedicated supply chain teams and the ability to absorb disruption, this is a serious logistics problem. For a small retailer or e-commerce brand sourcing product from Asia, it can be existential.

The difference here goes beyond scale or capability. Small and medium-sized business owners have had to weather many difficult economic moments. Last year, 70% of small businesses said rising prices significantly impacted their operations. What helps these operators build real resilience is understanding the value of information and building their systems to act on real-time data.

The Hidden Cost of Disruption

When supply chains buckle, small businesses feel it first. These brands don’t typically have dedicated logistics teams running scenario models. There’s no procurement department with long-standing supplier relationships and alternative sourcing already mapped out. It’s usually one person, sometimes the owner, making calls based on instinct, experience and whatever information they can piece together in real time. 

A disruption to the ability to source goods from Asia doesn’t just affect one product category or one supplier. It can mean an entire business’s inventory pipeline has to come to a halt all at once. Big brands may have some leverage to renegotiate lead times and put resources into identifying alternative suppliers, but most SMBs have none of those options.

This matters beyond the fact that individual businesses will struggle. Small and mid-sized brands are a significant part of the consumer economy. They generate just over half of employment opportunities in the U.S. When their shelves go bare or their margins collapse because of supply chain volatility they couldn’t anticipate, the impact ripples outward to their employees, local communities and the customers who depend on them. 

SMBs Are Bracing for Impact

Retailers aren't waiting to see how things play out. Purchase order data from Katana, tracked across thousands of global retailers and e-commerce businesses, shows apparel and textile companies surged orders by nearly 50% in the first week following the U.S. strike on Iran. This was the largest single-week spike in over a year of data on the platform. The following week, the trend accelerated, a signal that purchasing isn’t returning to baseline anytime soon.

This behavior shouldn’t be written off as panic buying. As oil prices rise, so do shipping costs. For businesses that have already locked in shipping terms with their suppliers, placing orders now effectively hedges against cost increases that haven’t hit yet. When shipping lane uncertainty is high, the best way to protect against stockouts is to order further in advance, and build in buffer time that may not have been necessary a month ago.

SMBs are doing both right now: ordering more and ordering earlier. But there’s a cost to this, too. Large purchase commitments made under uncertainty carry their own kind of risk. Cash becomes tied up in inventory that might not move at the rate originally anticipated. There’s also the expense of storing these goods to consider. If the disruption resolves faster than expected, businesses can find themselves overexposed on stock they front-loaded at a premium. The brands navigating this environment with the most success are those ordering smarter, and this is in part achieved by having visibility into what is moving and what isn’t.

The Problem With Planning on Instinct

For most SMB retail history, gut-feel planning worked. Owners knew their customers and suppliers and could operate in an environment stable enough where experience was a reliable guide, and spreadsheets were all that was needed in a planning tool. This kind of business environment is disappearing.

Supply chains are more globally interconnected and therefore more fragile than they’ve ever been. The World Bank’s Global Supply Chain Stress Index shows container‑shipping disruptions have remained elevated since around 2020. This indicates that post-COVID-19 disruption, tariff volatility and geopolitical instability have all compounded to create a new baseline level of uncertainty. Manual, instinct-driven planning can’t keep up anymore. Decisions made on last week’s data in a fast-moving environment turn into liabilities.

SMB operators are all too often held back by structural information problems. For instance, planning logic lives in a spreadsheet that one person built and only that person fully understands. Inventory data is siloed across tools that don’t talk to each other. There is no real-time view of what’s in stock, what’s in transit and what’s actually selling. When disruption hits, decisions are made based on incomplete data. 

The volatility many businesses face now with restricted shipping through the Strait of Hormuz illustrates this challenge well. Businesses are making large purchasing commitments without being able to model the downstream impact on cash flow, storage or demand. Some will get it right, but others will over-order in some categories and under-order in others. It’s hard to know which until the orders land. 

Supply Chain Resilience in a “New Normal”

Resilience for an SMB requires more than holding onto inventory. Information is power here. It’s about knowing, at any given moment, what you have, what’s moving and where the gaps are. 

The businesses that handle disruption most effectively do the following:

• Have real-time visibility into inventory across every channel, extending beyond an end-of-week report into an always-on live view.
• Build reorder triggers based on actual lead times and supplier behavior rather than optimistic assumptions.
• Treat supplier diversification as a standard practice, not a crisis response so when one lane goes down, they have options built in.

None of this requires the infrastructure of a national retailer. The same principles that allow Walmart to reposition inventory across thousands of locations in response to a demand signal can be applied at the scale of a 20-person e-commerce brand. The tooling may change, but the underlying discipline is the same.

For a long time, inventory management was treated as necessary but not strategic. It's time for SMBs to rethink their approach to planning. The “new normal” baseline has made it clear that how a business manages its supply chain can be one of the most consequential decisions it can make. Getting it wrong when disruption strikes is no longer an option.

The underlying fragility of globally interconnected supply chains will not resolve itself anytime soon. It’s important for SMBs to understand that this is the new operating environment. Gut-feel inventory planning served small businesses well for a long time. Now, the SMBs that commit to building real-time visibility, data-driven reorder logic and genuine supply chain flexibility into how they operate will be the ones weathering the next disruption.

Ben Hussey is co-CEO of Katana Cloud Inventory