The most significant 2025 supply trend is one that affects every economic sector: uncertainty. The MHI staff observes, “As 2025 begins, a mix of opportunities and uncertainty is driving supply chain professionals as they seek to gain a deeper understanding of how the year will play out. How will automation and AI impact supply chains? Will inflation continue or subside? How will the incoming Trump administration’s immigration, tax, and tariff policies impact global supply chains?”[1] Questions abound. The biggest question being whether or not a global trade war is about to commence. Jonathan Starks, CEO of FTR Transportation Intelligence, observes, “A trade war would be bad for growth, bad for supply chains, [and] bad for consumers.”[2]
Matthew Lekstutis, Director for North America at Efficio, believes that the uncertainty about how events will unfold in 2025 requires supply chains to be extremely agile. He explains, “As we look ahead to 2025, companies across industries are recognizing the critical importance of supply chain agility, efficiency, and sustainability, leading to significant shifts in how they operate. From accelerated investments in AI and digital technologies that redefine innovation to a strategic move towards insourcing critical functions for greater control and security, businesses are reimagining processes across the board.”[3] Below are a few of the trends supply chain professionals need to watch during the coming year.
Supply Chain Trends
● Disruption is the norm. Supply chain professionals can’t wait for things to settle down — because they won’t. Supply chain journalist Philip Neuffer bluntly reports, “Last year hammered home something clearly to supply chain professionals: disruption is the norm, rather than the exception.”[4] Disruption is a fellow traveler with uncertainty.
● Increased use of Gen AI and machine learning. As President and CEO of an AI firm involved in the consumer packaged goods sector, I’m well aware of increased activity and potential in this area. Supply chain journalist Georgia Collins reports, “AI and machine learning have the potential to automate complex decision-making processes, enabling predictive maintenance and personalized logistics. The introduction of Gen AI into demand forecasting, dynamic pricing, and supplier selection has allowed the industry to enhance operations by analyzing vast datasets in real time, improving accuracy and reducing operational costs. With these solutions, supply chains can proactively address disruptions and minimize delays and inventory shortages. Organizations can also create virtual simulations for supply chain optimization, with AI and machine learning ensuring more resilient and adaptive systems which ultimately boost customer satisfaction and competitive advantage.”[5] At Enterra Solutions®, we bundle a number of AI solutions into our Enterra System of Intelligence®.
● More supply chain diversification. The Material Handling & Logistics staff explains, “Leading supply chain organizations are prioritizing diversification and contingency planning to address challenges related to global trade dynamics and geopolitics. These companies are spreading supply sources across multiple regions and developing backup plans, as well as using scenario planning to anticipate potential challenges and develop proactive solutions.”[6] Enterra’s scenario planning tool, the Enterra Global Insights and Decision Superiority System™ (EGIDS™) — powered by the Enterra Autonomous Decision Science™ platform — can help business leaders rapidly explore a multitude of options and scenarios.
● Continued reshoring, nearshoring, and friend-shoring. A related strategy to supply chain diversification is relocating manufacturing facilities to reduce transportation costs and shorten supply lines. The goal is to make supply chains more responsive and secure. Business economic student Amina Lövenich explains, “Resilience in supply chains refers to the ability to withstand and recover from disruptions, achieved through strategies like supplier diversification and nearshoring.”[7] Collins adds, “By manufacturing closer to end markets, companies are improving their responsiveness to local demand and mitigate geopolitical tensions. Nearshoring also supports sustainability by minimizing carbon emissions from long-distance shipping.” According to Lekstutis, in order to improve resilience, some companies are adopting vertical supply chains. He explains, “In response to increasing pressure on quality, sustainability, and reliability, companies will continue to make moves to reclaim control over their supply chains, shifting from third-party providers to in-house operations. … This control allows companies not only to streamline operations but also to uphold higher standards, reduce environmental impact, and respond faster to market demands.”
● Sustainable and circular supply chains. Most companies understand that sustainable operations are in their long-term best interests. Collins notes, “Sustainability remains a core focus for the industry driven by environmental regulations and consumer expectations.” She adds, “With companies shifting towards more sustainable practices, prioritizing reuse, refurbishment and recycling of materials, circular supply chains gained significant traction in 2024, supporting environmental goals and reducing waste and resource dependency. Organizations are also investing in reverse logistics to streamline product returns, repairs and recycling processes, fostering closed-loop systems to reduce their carbon footprint and comply with stricter regulations. Circularity also opens new revenue streams through resale or recycling markets. With consumers increasingly demanding sustainable products, those adopting circular supply chains are also future-proofing their operations.” Thomas Young, President and CEO of World Trade Center Greater Philadelphia, insists, “Environmental sustainability and ethical business practices will continue to have a more considerable impact on international companies’ change management, reshaping supply chains and consumer expectations as well.”[8]
● Better cybersecurity practices. Cybersecurity concerns focus on bad actors as well as state-sponsored hackers. Nefarious cybersecurity activity by countries like China, Russia, and Iran continue to undermine the world’s trust in them as trading partners. Businesses are spending more and more each year to defend themselves against cyberattacks. The Material Handling & Logistics staff explains, “Effective supply chain leaders prioritize cybersecurity to protect sensitive data and critical operations. By implementing security measures including data encryption, access controls and network security, they can mitigate risk and ensure business continuity. Meanwhile, supply chain visibility, enabled by the latest technologies, makes it easier to identify and address vulnerabilities. These cybersecurity best practices, combined with comprehensive incident response plans, further strengthen supply chain security.”
● Movement towards autonomous supply chains. The future of automation in U.S. ports was a substantial issue during recent labor negotiations. Nevertheless, automation continues to play an ever-larger role in supply chain operations. Collins writes, “While far from new, autonomous supply chain technology remains a trending topic for the industry, with self-driving trucks, drones, and automated warehouses going mainstream. These innovations are helping supply chains to address labor shortages, improve efficiency, and reduce errors, as well as enhance last-mile delivery by optimizing routes and cutting transportation costs. Smart warehouses are also using robotics and AI to accelerate inventory management and order fulfilment to not only reduce reliance on human labor but also provide scalability to meet fluctuating demands.”
● Rising demand in direct-to-consumer fulfillment. Thousands of brick-and-mortar stores continue to close as consumers opt to make more purchases online. Lekstutis explains, “To keep pace with the booming direct-to-consumer (DTC) e-commerce trend, companies are ramping up their distribution networks, investing heavily in warehousing and transportation infrastructure. … However, this surge in distribution capabilities also introduces potential choke points, such as increased congestion in urban warehouses and higher last-mile delivery costs. As more companies adopt DTC models, the race to expand distribution networks may drive up real estate and labor costs, underscoring the need for strategic planning to manage these new complexities without eroding profitability.”
● Supply chain experience is now customer experience. When shopping for essential items during the Covid-19 pandemic, consumers were often confronted by empty shelves. Individuals who had never paid much attention to supply chains were suddenly well aware of how important supply chains are to their daily lives. Jessica Dankert, Vice President of supply chain at the Retail Industry Leaders Association, observes, “I think that attention has really helped shed light on the fact that supply chain isn’t just a backroom kind of thing or warehouse kind of thing. It’s very much kind of front and center with consumers, and something that is visible to consumers and important to consumers in many ways.”[9] Lekstutis agrees. He explains, “In 2024, the supply chain experience evolved into a defining aspect of consumer experience, as the rise of e-commerce continues to reshape how brands connect with their customers. With online sales now accounting for a significant portion of total revenue, companies recognize that efficient and transparent supply chains are no longer just backend operations but are crucial to their brand identity.”
Concluding Thoughts
Young concludes, “For many who entered the supply chain and trade industries 20 or 30 years ago, the rate of change is accelerating this decade in ways previously unimagined. I see this rapid change as an excellent opportunity to create efficiency, reduce our impact on resources, and expand even further, globally. Companies that can adapt to this change can stand out among an industry long rife with stagnation.” To transform supply chains, technology, processes, and people will all play an important role. Often technology and process updates receive more attention than people. However, the Material Handling & Logistics staff explains, “Best-in-class supply chain organizations understand the value of investing in talent management and professional development. By upskilling and reskilling employees, businesses ensure their workforces are equipped to handle the demands of an increasingly automated and digital supply chain.” It’s an exciting (if stressful) time to be part of the supply chain sector. Keeping up with emerging trends is essential in order to remain competitive and successful.
Footnotes
[1] Staff, “The Impact of Geopolitical Uncertainty, Automation, AI, Trump, Taxes and Tariffs Are Top of Mind for Supply Chain Professionals,” MHI, 10 January 2025.
[2] Carol Brzozowski, “Post-Election Outlook for Supply Chain,” Supply & Demand Chain Executive, 27 December 2024.
[3] Matthew Lekstutis, “Supply Chain 2024: Year in Review and Predictions for 2025,” Supply & Demand Chain Executive, 7 January 2025.
[4] Philip Neuffer, “Supply chain management trends to watch in 2025,” Supply Chain Dive, 9 January 2025.
[5] Georgia Collins, “Top 10: Trends of 2024 in Supply Chain,” Supply Chain Digital, 11 December 2024.
[6] Staff, “Top 10 Supply Chain Trends for 2025,” Material Handling & Logistics, 8 January 2025.
[7] Amina Lövenich, “Supply Chain Trends 2025: Innovation, Resilience & Sustainability,” All Things Supply Chain, 9 January 2025.
[8] Thomas Young, “Preparing for Emerging Global Supply Chain Challenges,” Inbound Logistics, 7 December 2024.
[9] Neuffer, op. cit.
