Report highlights supply chain challenges

Supply chain solution provider Inspectorio has released its second annual “State of Supply Chain Report 2025,” outlining key challenges facing brands, retailers and suppliers amid increasing compliance demands and digital transformation.

The report, based on survey responses and expert interviews, highlights concerns over tariff unpredictability, sustainability expectations and regulatory complexity. It finds that 85 per cent of respondents say meeting new sustainability standards has become significantly more difficult, while more than 75 per cent have increased compliance budgets to navigate a fragmented global regulatory landscape.

Despite 75 per cent of respondents recognizing sustainability as a key purchase driver, fewer than 10 per cent believe consumers are willing to pay more for eco-friendly options. Meanwhile, over 60 per cent of suppliers report that retailers push compliance and environmental upgrade costs onto them, creating financial strain for mid-tier suppliers.

On the digital front, fewer than 10 per cent of companies have achieved near-full automation of supply chain functions, and over 45 per cent remain below 25 per cent digitization. Cultural resistance and unclear return-on-investment metrics were cited by 70 per cent of respondents as barriers to digital adoption.

“To manage accelerating regulations on forced labour, heightened sustainability mandates, and geopolitical fluctuations, brands and suppliers must move quickly to improve their supply chain agility and resilience,” said Inspectorio CEO Chirag Patel. “This year’s report reveals that a multifaceted approach – one that unifies compliance and risk management with strategic sourcing, digital innovations, and measurable ESG commitments – is critical to success both now and in the future.”

The full report is available for download on Inspectorio’s website.