The past year was fraught with challenges for procurement and supply chain teams. From extreme weather events to more than one ongoing genocide, organisations’ buying and supply chain strategies have faced one challenge after another, and an environment of sustained instability. These challenges are unlikely to abate in 2025 as, according to a new report by GEP, procurement teams should brace for “turbulence ahead.”
GEP’s new Outlook 2025: Procurement & Supply Chain report was released earlier this week and identifies seven driving forces that will shape procurement and supply chains in 2025.
“After several years of mitigating inflation, disruption, supply shocks, conflicts, and uncertainty, we are currently in a relative period of calm,” said John Piatek, vice president, GEP. “But it is very much the calm before the coming storm.”
The storm breaks: Procurement headwinds set to define 2025
GEP’s experts have, in response to the report’s findings, provided six key predictions and guidance for procurement and supply chain leaders in 2025:
1. Autonomous AI Agents Driving Procurement and Supply Chains
Outlook: Advanced AI tools will automate sourcing and leverage external unstructured real time analytics for smarter decisions, among other tasks. AI agents will play a key role in demand forecasting, risk monitoring, and supply chain optimisation, shifting procurement’s mandate from tactical to strategic.
Guidance: Invest in AI to streamline processes and enhance decision making. Pilot AI tools like orchestration platforms and agents in high-impact areas, backed by strong data governance and scalability planning.
2. Expanded Value Metrics
Outlook: Success will be measured by resilience, sustainability, and compliance alongside cost efficiency.
Guidance: Develop KPIs for flexibility, carbon reduction, and supplier diversity. Communicate value beyond cost savings to stakeholders.
3. Supply Chain Resilience Amid Regulatory Scrutiny
Outlook: Increasing regulatory demands will necessitate heightened supply chain transparency and accountability.
Guidance: Strengthen supplier audits, adopt ESG tracking tools, and integrate compliance into strategic procurement decisions.
4. Widening Tariffs and Trade Restrictions
Outlook: Nearshoring and friendshoring will balance resilience with cost in response to trade barriers and regional political tensions.
Guidance: Reassess total cost of ownership (TCO) metrics to include geopolitical and environmental risks. Build regional supply networks for flexibility.
5. Energy Market Volatility and Sustainability Imperatives
Outlook: Rising energy costs and regulatory demands will accelerate the shift to sustainable operations.
Guidance: Invest in renewable energy and redesign supply chains to align with ESG commitments and compliance requirements.
6. Resurging Prices
Outlook: The assumption that inflation is under control and interest rates will return to near zero levels, as seen from 2008 to 2022, overlooks the possibility that tariffs could drive prices higher.
Guidance: Continue to secure cost savings as your primary responsibility and contribution to the success of your businesses and stakeholders.
