Report forecasts major shifts in procurement and supply chains by 2025

A new report from GEP outlines six key trends poised to reshape supply chains and procurement strategies by 2025, including AI-driven decision-making, tariffs and trade barriers.

The Outlook 2025: Procurement & Supply Chain report from GEP, an AI-driven procurement and supply chain solutions company, warns that while the current economic environment may seem stable, leaders should prepare for challenges ahead, including regulatory pressures, protectionism, trade wars and the rapid adoption of artificial intelligence.

“After years of navigating inflation, disruption and uncertainty, we’re in a period of calm—but it’s the calm before the storm,” said John Piatek, GEP’s vice-president. “This report provides actionable guidance for procurement and supply chain leaders to build resilience and thrive amid headwinds.”

Key predictions and guidance

The report highlights six critical forces set to influence procurement and supply chains in 2025:

1. AI-driven decision-making: Autonomous AI tools will automate procurement tasks, such as sourcing and risk monitoring, shifting the focus from tactical to strategic operations. Leaders are advised to invest in AI and pilot tools in high-impact areas.
2. New value metrics: Success will extend beyond cost savings to include resilience, sustainability and compliance. Businesses should establish KPIs for flexibility, carbon reduction, and supplier diversity.
3. Regulatory scrutiny: Transparency and accountability in supply chains will become increasingly vital. GEP recommends enhancing supplier audits and adopting ESG tracking tools.
4. Trade restrictions: Geopolitical tensions and tariffs will push companies toward nearshoring and friendshoring strategies. Organizations should reassess their total cost of ownership to include geopolitical and environmental risks.
5. Energy volatility and sustainability: Rising energy costs and regulatory demands will necessitate sustainable operations. Companies should invest in renewable energy and redesign supply chains to align with environmental goals.
6. Price pressures: While inflation appears contained, trade barriers could drive costs higher. Businesses are encouraged to prioritize cost-saving strategies to maintain competitiveness.

GEP’s report, authored by its Thought Leadership Council, underscores the need for businesses to remain adaptable in the face of uncertainty.

“The AI revolution, combined with geopolitical and economic shifts, will test the resilience of global supply chains,” Piatek added. “Organizations must act now to navigate the complexities ahead.”

Visit here for the full report.