Strategic Priorities for 2025: Strengthen Supply Chains

Building on the article I shared at the beginning of this now year on Trends for 2025, I would like write focused articles on each of the strategic priorities:

1. Invest in Technology: published on the 17th of January
2. Focus on Sustainability: published last week on the 24th of January.
3. Strengthen Supply Chains (this week)
4. Understand Your Consumers
5. Support Your Workforce
6. Adapt to Regulatory Changes

The third Strategic Priority is the one we drew attention to this week: Strenghten Supply Chains.

Supply chains are the lifeblood of global business, connecting suppliers, manufacturers, and consumers across continents. Yet in recent years, their vulnerabilities have been exposed by geopolitical tensions, natural disasters, and global pandemics. As we move into 2025, strengthening supply chains has become a strategic priority for businesses seeking resilience in an increasingly uncertain world.

This article explores how businesses can fortify their supply chains, reduce risk, and position themselves for long-term success amidst these challenges, including new threats from the global political stage.

The Case for Supply Chain Resilience

Supply chain disruptions can have catastrophic impacts on businesses, from production delays to lost revenue and reputational damage. In 2025, companies face a host of challenges, including:

• Geopolitical Risks: Ongoing tensions in regions such as Eastern Europe and Asia-Pacific threaten the stability of trade routes.
• Regulatory Changes: New environmental and trade regulations, such as the EU’s emissions-trading expansion, place additional pressure on supply chains.
• Political Protectionism: The new US government under Donald Trump is escalating economic tensions with its “Buy American or Else” rhetoric, threatening to impose massive tariffs on products imported into the US.

“If you don’t make your product in America, which is your prerogative, then very simply, you will have to pay a tariff.”

U.S. President Donald Trump - World Economic Forum, Davos, 23rd January 2025

These dynamics, highlighted in recent remarks at annual meeting of the World Economic Forum in Davos, introduce fresh uncertainty for businesses reliant on the US market. Such protectionist measures have the potential to disrupt global supply chains, increase costs, and force businesses to rethink their production and sourcing strategies.

Strengthening supply chains isn’t just about managing risks; it’s about creating opportunities for efficiency, sustainability, and innovation.

Building Resilient Supply Chains

Resilience requires a multifaceted approach. Here are key strategies for creating supply chains that can withstand disruptions

1. Diversify Suppliers

Overreliance on a single supplier or region can leave businesses vulnerable to disruptions. Diversifying suppliers across geographies reduces dependency and mitigates risks.

Practical Steps:

• Map your current supplier network to identify areas of overreliance.
• Build relationships with alternative suppliers in different regions.
• Consider nearshoring or reshoring to reduce logistical risks and avoid tariffs in the US.

For example, businesses exporting to the US may now look at shifting production to North or Central America to align with the “Buy American” agenda or minimise exposure to tariffs.

2. Leverage Technology for Supply Chain Visibility

Real-time data is critical for identifying and addressing disruptions quickly. Advanced technologies like AI, blockchain, and IoT (Internet of Things) enhance supply chain visibility and enable proactive decision-making.

Practical Steps:

• Implement supply chain management software to track shipments and inventory in real-time.
• Use AI-powered analytics to predict disruptions and optimise routes.
• Explore blockchain solutions for enhanced transparency and security in transactions.

3. Adopt a Risk Management Framework

A robust risk management framework ensures businesses are prepared for various scenarios, from natural disasters to tariff hikes.

Practical Steps:

• Conduct risk assessments to identify vulnerabilities in your supply chain.
• Develop contingency plans for high-risk scenarios, such as sudden tariffs or trade restrictions.
• Regularly review and update your risk management strategies.

4. Navigating Protectionist Policies

The growing wave of economic protectionism, spearheaded by the US, adds a layer of complexity to global trade. Businesses reliant on US exports or partnerships must adapt quickly to avoid being caught off guard by new tariffs.

Practical Steps:

• Localise Production: Consider shifting manufacturing closer to your key markets, such as the US, to avoid punitive tariffs.
• Renegotiate Contracts: Work with suppliers and customers to adjust terms in anticipation of potential cost increases.
• Engage in Advocacy: Collaborate with industry groups to voice concerns and lobby for policies that mitigate the impact of protectionism.

The threat of US tariffs and the “Buy American” stance is likely to ripple through global supply chains, affecting industries from manufacturing to technology. Businesses must proactively assess their exposure to the US market and take steps to safeguard their operations.

Sustainability in Supply Chains

Strengthening supply chains isn’t just about resilience—it’s also about sustainability. As green initiatives gain momentum, businesses must align their supply chains with environmental goals to meet regulatory requirements and consumer expectations.

1. Sustainable Sourcing

Source materials responsibly to reduce environmental impact and ensure ethical practices. This includes using renewable resources, reducing waste, and partnering with eco-conscious suppliers.

Practical Steps:

• Incorporate sustainability criteria into supplier contracts.
• Prioritise suppliers with certified environmental and ethical standards.
• Monitor the environmental impact of raw material sourcing.

2. Greener Logistics

Transportation is a significant contributor to supply chain emissions. Adopting greener logistics solutions can help businesses meet sustainability targets while reducing costs.

Practical Steps:

• Transition to electric or low-emission vehicles for transportation.
• Optimise shipping routes to minimise fuel consumption.
• Use sustainable packaging materials to reduce waste.

3. Circular Supply Chains

Circular supply chains aim to reduce waste by reusing and recycling materials. This approach not only aligns with sustainability goals but also creates cost savings.

Practical Steps:

• Partner with organisations that specialise in recycling or upcycling materials.
• Implement take-back programmes for used products.
• Invest in technologies that enable the refurbishment or repurposing of goods.

Collaborating with Stakeholders

Supply chain resilience and sustainability require collaboration across the entire ecosystem. Engaging suppliers, employees, and customers fosters alignment and drives success.

1. Supplier Engagement

Building strong partnerships with suppliers ensures alignment on goals and fosters trust. Regular communication and shared objectives are key.

Practical Steps:

• Establish joint sustainability initiatives with key suppliers.
• Conduct regular supplier audits to ensure compliance with standards.
• Share data and insights to improve efficiency and collaboration.

2. Employee Training

Employees play a crucial role in managing supply chains. Providing training on supply chain management tools and sustainability practices empowers them to contribute effectively.

Practical Steps:

• Offer training sessions on using supply chain technologies.
• Educate employees on sustainability goals and their role in achieving them.
• Recognise and reward employees who drive improvements in supply chain operations.

3. Customer Involvement

Engaging customers in your supply chain strategy can enhance loyalty and brand reputation. Transparent communication about your efforts builds trust.

Practical Steps:

• Highlight sustainable sourcing and logistics efforts in marketing campaigns.
• Offer eco-friendly product options and explain their benefits.
• Involve customers in circular supply chain initiatives, such as recycling programmes.

The Path Forward

In 2025, supply chain resilience is no longer optional—it’s a business imperative. By diversifying suppliers, leveraging technology, integrating sustainability, and preparing for geopolitical challenges such as US protectionism, companies can build supply chains that withstand disruptions and create long-term value.

Businesses that act now to strengthen their supply chains will be better positioned to navigate the uncertainty of global trade and seize opportunities in an increasingly complex marketplace.

How is your organisation preparing its supply chain for 2025? Share your insights and experiences in the comments below.