The whole modern society and the whole economy depend on the supply chains; relying on them is really difficult to manage. The importance of establishing resilient supply chains powered by agile professionals is ever-increasing. The world is undergoing a transformation based on technology, geopolitics, and climate changes. In this article, we uncover the top seven supply chain trends that will probably be present in 2025 and in the future. If you're interested in a career in supply chain management, consider enrolling in the British Academy for Training and Development, where you'll learn about our logistics, operations, planning, sourcing, and strategy.
Trends in Supply Chain Management
With the changes and challenges that the field has for the rest of this year, any aspiring professional or logistics leader would face several transformations. Here are seven top trends that supply chain leaders and professionals should expect in 2025 and in the future.
1. Restructuring for Resilience
At the moment experts are seeing a long-term realignment of supply chains in progress, as companies are developing ideas, tools, and facilities to adapt to modern-day supply chain requirements. Rising geopolitical tensions, volatile pricing, and transportation bottlenecks forced U.S. and global companies to reevaluate their global supply chains. In recent years, many businesses have implemented the practice of adding alternate suppliers for staying operationally resilient. This includes a multi-shoring strategy which combines sourcing from near-shore and on-shore with suppliers in far regions like Asia.
According to the U.S. Chamber of Commerce survey, more than 90% of American companies are already implementing or planning to implement a model for supplier diversification. Likewise, more than 75% of them are trying to mitigate the implications of disruption that can happen in any one geographic region by sourcing from other regions of the world.
The extending of supplier networks represents a significant burden initially, but over the long term, it requires the management of an increased number of vendors. The effect here is that vendor diversification brings added complexity to the supply chain for a purportedly greater resilience. The actual value of that trade-off is still uncertain, as some companies in recent months have reconsolidated the number of suppliers in an effort to reduce costs and streamline operations.
2. Data will continue to play a critical role.
Data constitutes the backbone of modernity. The component that enables effective diagnosis and solution of costly inefficiencies, aiding rapid response to unforeseen events, signing the cost, and optimum performance in the overall supply chain that makes logistics providers view at micro or macro levels.
But data is the linchpin when it comes to making even the most high-level logistics managers be able to effectively assess and troubleshoot costly inefficiencies, rapidly respond to unforeseen events, and maximise overall supply chain performance.
Supply chain analytics is likely to continue being critically needed, as far as data only continues to hold importance in the logistics industry today. Indeed, while the novel technologies which today and in the future will provide contemporaneous minute-to-minute little bits of minutiae to professional end-users, it is data analytics that finally enables the actionable advice from all that information input. In addition, he will have to look after the incoming real-time, high-quality, recorded data and have a bunch of resources to act upon properly when trying to beat competitors via newer integrative approaches of having artificial intelligence practices.
Soon, the role of analytics will continue to enhance its significance in the coming years. Markets are expected to grow in size by 2027, with a figure of $13.5 billion in this comparative business supply chain analytics market, almost three times what it was valued at in 2022 at $5.2 billion [4]. Future-proofing oneself or one's organisation may be underscored by enhancing competencies in data analysis, data management, and cloud computing.
3. Rebalancing Inventories
Companies restructured their inventory management strategies, which they put on hold in 2020 while continuing to stockpile goods through the pandemic. And now after a break, they are continuing the same practice of "just-in-time" lower management costs by maintaining fewer inventories. In 2025, many will also carry a balance between just-in-time and safety stocks, something which some are now referring to as "just-right" inventories, while bearing in mind possible disruption, economic change, and uncertain consumer spending trends.
"Companies cannot only build buffer inventory in response to instability; that only burdens them with working capital," as quoted in the HBR article. "With this level of competition, companies should not hang themselves with self-imposed handicaps."
"Leverage digital tools to make that risk visible within your supply chains, from current on-site inventory to updates while in transit from its source to confirmation in your warehouse – reducing the possibility of stock-outs," Davis adds. Small-scale digitisation can deliver much leaner inventory management systems, including dropshipping, where the retailers do not even own stocks and trigger a delivery by a third party to the customer after a sale. AI-driven forecasting and replenishment features might be establishing themselves as another supply chain trend that optimises inventory management.
4. Digital skills will become more important.
As entire supply chain systems are transformed, the demands are growing for professionals to work confidently with data and new technologies such as AI. The Future of Jobs Report 2023 prepared by the World Economic Forum states that about 75 per cent of all surveyed companies will adopt these features, that is, big data, cloud computing, and AI, within the next five years. Further, it lists technology literacy among the top three fastest-growing skills among employers, just after creative and analytical thinking – the problem-solving core competencies that will help manoeuvre a continually shifting technological landscape and global marketplace.
Supply chain leaders seeking to optimise work productivity through these tools would consider internal training programmes for developing these digital skills within their teams. Professionals also tend to rope in the industry-savvy and industry-ready by acquiring data, cloud, and artificial intelligence skills that will be part and parcel for many businesses in the next few years.
5. Deploying Cloud-Based Solutions
An annual survey conducted by MHI: Material Handling Industry, a dominating trade organisation, says that the cloud has firmly pushed itself as the standard platform for maximum supply software chains. MHI believes that cloud computing and its storage will become popular up to about 82% in the following years.
Cloud computing is almost everywhere and is launching several supply chain revolution cases, such as mesh technology to bring together data from multiple supply chain systems to create a "digital twin", that is, a virtual replica that will support decision-making and intelligent orchestration of operations. In another example, inventory data can now be linked with readings from transport vehicles so that delivery schedules can be confirmed to avoid stockouts.
At the employee level, the cloud allows supply chain managers to access the most crucial information anywhere, not in vain, and is often within that particular operation of 24/7 availability. Organisations can do this by taking advantage of an expanding range of cloud-based SaaS applications, including packaged solutions for comparing freight forwarders and managing storage.
6. Upgrading With Artificial Intelligence and Generative AI
Almost all of the world's executives, 98% according to the 2024 Economist Impact survey, have started using AI to change at least one thing in how they manage supply chains. The relationship was propelled by the rapid adoption of AI tools, exploding into the market in late 2022; such evidence underlies a recent Harris Poll showing AI as currently being the single most important focus area for supply chain management with regard to efficiency and decision-making.
But, market observers say most businesses lack a clue what to really do with AI. For example, Deloitte has stated that "many companies are still piloting many of their GenAI programs," while supermajority survey respondents do not seem to have taken their GenAI experiments to more than 30% into full production.
However, the display was obvious across many sectors. The Economist Impact survey revealed that 40% of corporations use AI to enhance customer experience, 35% for forecasting demand, 35% for determining inventory levels, and 35% for identifying potential supply chain disruptions. Early adopters saw a 34% savings in supply chain spending, for example, right away and a 32% improvement in supply chain planning. Options aplenty are available, as stated in the HBR article, including identifying and developing potential suppliers and proposing risk mitigation strategies based on multiple scenarios.
It is expected, says a Boston Consulting Group report, that in years to come AI will take an even bigger lead role in supply chain operations as supply teams begin to trust what AI brings in terms of autonomous decision-making.
7. More focus will be paid to ESG efforts, traceability, and transparency.
Although it is something that many consumers are concerned about nowadays, regulators too have environmental sustainability as their concern. The environmental concern of US consumers can be categorised into the following three groups or segments: curious consumers purchasing eco-products but not really advocating for the environment (11%); conscious nonconsumers concerned about their environment but do not purchase eco-products (32%); and conscious consumers, those who check the environmental credentials of a product before opting to buy (24%).
Environmentalism is a shared concern with regulators, who are demanding tracking and reporting of the environmental impacts for logistics companies. Japan and the UK already require organisations to report their direct and indirect greenhouse gas emissions and climate-related risks, with the EU set to do the same this year and likely the US soon to follow. Moreover, the climate laws of the EU specify that member states will need to cut their greenhouse gas emissions by more than 50% by 2030 and will be looking for climate neutrality by 2050.
Supply chain activities are known not to consider consumer concerns and are, therefore, not ready for these regulatory transitions. According to the 2023 State of Supply Chain Sustainability report by researchers at MIT, approximately 65 percent of participants stated they did not currently have a "net-zero carbon emissions goal", while only 6 per cent indicated a "year-over-year increase in organisational commitment to climate change mitigation". This means that logistics industry players will face heightened pressure to start building toward supply chain visibility, transparency, and environmental impact this year, just as the regulatory clock ticks.