A new year means both fresh and recurring supply chain challenges for procurement teams and businesses. Since COVID-19, many businesses have encountered supply chain disruptions, impacting their operations and profits. 

Technological and socioeconomic shifts will still contribute to continued disruption. Watch for these 5 emerging trends in 2025:

 

1. The Dominance of AI 

In the last two years, much of the chatter around AI has been about its ability to assist with personal tasks like answering questions or drafting documents. In 2025, AI will keep expanding beyond just personal use to improve and change supply chain operations. According to Statista, more than half of the global supply chain industry is expected to adopt AI this year. One report by EY states that at least 40% of supply chain organizations are already heavily investing in generative AI. 

AI can offer your business a tremendous opportunity to streamline many of your supply chain operations, sourcing, and procurement. 

Here are just a few ways that AI can improve supplier management: 

• Accelerate supplier validation. Businesses can use AI to extract information from supplier registration forms and documents to analyze vendor data. This will help assess potential risk and evaluate whether this supplier is a good fit. AI algorithms can quickly flag any previous legal issues or identify any fraudulent behavior. 

• Streamline onboarding. The onboarding process itself can be accelerated using AI tools. For example, AI-virtual assistants can help walk suppliers through the onboarding process, even providing personalized content and next steps based on the supplier’s location, products, or supplier tier status. 

• Predict demand. AI-enabled forecasting can help forecast demand by providing predictive insights based on historical data, market trends, and inventory data.

 

2. Automation that Accelerates Supply Chains 

Along with AI, another key trend for 2025 will be automating manual tasks to accelerate supply chain operations. Today, only 1/4 of warehouses have some type of automation, but expect that number to increase this year.

While AI can help to automate processes, robotics, digital twins, and IoT will also play critical parts in increasing the speed of supply chains. Of course, the benefits of automation extend beyond just speed: by automating routine tasks, you can re-allocate resources towards more strategic activities, reduce labor costs, and increase operational efficiency. 

 

3. The Importance of Cybersecurity 

Ensuring strong security measures are in place will continue to be critical for 2025, especially as supply chains become increasingly digital. In 2024, supply chain attacks and IT outages showed that no infrastructure is totally immune to risk. Remember the CrowdStrike update that affected millions of systems and the XZ backdoor supply chain attacks? 

Last year, the global average data breach cost was $4.88 million, a 10% increase from the previous year. Additionally, the number of data breaches increased by 200% between 2013 and 2022. These numbers are particularly concerning for procurement teams that handle sensitive information around supplier contracts and pricing. 

To stay ahead of these threats, your team needs to explore advanced security technologies, evaluating how best to secure your data and processes. AI can be important here as well, identifying potential cyberattacks and monitoring real-time operations. 

 

4. Increased Supply Chain Risk 

Security breaches and cyber attacks are not the only risk to supply chains. Changing environment regulations, geopolitical tension, inflation, labor shortages, and upcoming trade laws and tariffs will all impact supply chain viability. 

To mitigate these risks, you need to be prepared to evolve and adapt quickly, choosing to embrace agile technologies that empower your supply chains to be resilient against these changes. 

Additionally, you’ll need greater visibility into your supply chains in order to know how to evolve and adapt. This will require real-time data to understand what’s going on and to identify areas for improvement.

 

5. ESG: From Compliance to Strategy 

Environmental, social, and governance (ESG) requirements have already started putting immense demands on supply chain leaders and will only maintain that pressure. In fact, Blue Yonder’s 2024 Supply Chain Executive Survey revealed that 44% of organizations increased sustainability initiatives in the past year. In 2025, we expect this percentage to increase even more. Your business will need to prioritize sustainability efforts and practice transparency around your efforts to meet ESG regulations.

You can turn these challenges into opportunities for stronger business performance and greater alignment with customer demands as you make supply chain sustainability a core part of your business.

For example, reducing Scope 3 emissions, the carbon footprint generated from supply chain activities, will be a key focus for many businesses this year. To create a more sustainable supply chain, data is crucial to identifying areas of high environmental impact and finding suppliers who can provide sustainable and cost-effective materials.

By 2025, it’s not enough to be reactive: your supply chain must become agile and adaptive in order to survive. Rather than waiting for the next crisis to hit, you need to build your supply chains to protect and ensure your future. 

One way to start is by strengthening your supplier relationships. A more robust and transparent supplier network will help accelerate your supply chains, and you can optimize your supplier management with a supplier portal. Learn how to build an effective supplier portal here.