The Year Ahead for Supply Chain Management
2025 was a year to forget as much as one to remember.
China’s aggressive tightening of export controls on rare earths and other critical materials — vital for electronics, electric vehicles (EVs), defense and renewable energy — led to a sudden need to redesign supply chains in many critical sectors. Tariff uncertainty and rising tensions in such regions as East Asia, the Middle East and Eastern Europe forced companies to reroute trade, diversify sourcing, and absorb higher costs for insurance and freight.
Adding to the strain on physical supply chains was a wave of cyber and software supply chain disruptions: One of the most high-profile instances was the 2025 cyberattack on Jaguar Land Rover (JLR), which forced a shutdown of production lines across the United Kingdom (U.K.), India, Brazil and Slovakia. This breach also brought sharply into focus the knock-on effect of security vulnerabilities in the supply chain.
The many and varied events of 2025 pushed resilience the top of every procurement and logistics leader’s agenda and offered valuable lessons that businesses will put in to practice throughout this year.
The top 10 trends for 2026 are:
1) Companies will increasingly reduce dependence on single large offshore suppliers such as China and looking at “China-plus-one” strategies to reduce risk instead. Electronics, textile and furniture businesses, for example, may opt for Southeast Asia because of labor-intensive production, electronics ecosystems, competitive costs and mature export infrastructure.
Automotive, auto parts, medical device and heavy machinery companies, on the other hand, are more likely to choose Mexico as they tend to prize proximity to the U.S. market, rapid logistics and lower freight cost.
2) New suppliers and the new routes will need to be scrutinized for compliance, cost and sustainability, driving up the demand for accurate monitoring tools that also track performance over time to ensure new contracts maintain the standards promised.
3) The U.S. will continue to impose and to be exposed to tariffs, retaliatory tariffs and other measures of export control, such as the recent tightening of duties in trans-shipment routes. Manufacturers must monitor trade-policy shifts, export bans, trans-shipment risk and build flexibility accordingly. The ability to pivot successfully will rely greatly on the tools used to predict and measure risk, enabling rapid, data-based decision-making.
4) In response to market volatility, the U.S. supply-chain footprint is likely to expand domestically, with more companies increasing production, warehousing and supplier capacity inside the country rather than relying solely on overseas partners.
This shift, however, exposes U.S. manufacturers and distributors to well-known domestic constraints: persistent labor shortages in logistics, trucking and advanced manufacturing; aging road, rail and port infrastructure that is already under strain; and elevated energy and transportation costs compared with many offshore locations. Together, these structural pressures may limit how quickly or cost-effectively U.S. companies can scale domestic supply-chain capacity through limitations that are outside of the single company’s control.
5) In addition, expanding the domestic supply chain in the U.S. will mean submitting to increased regulatory scrutiny of supply chain risks concerning labor, sourcing, traceability and sustainability. For U.S. companies and those supplying to them, this means a higher compliance burden and a greater need for tools that automate transparency.
6) Cybersecurity, freight theft and other security threats are increasing, so security will need to be embedded by design across the board. This year, there is likely to be a significant rise in AI-driven attacks. AI has become an attractive target and we’re already seeing early examples of attackers experimenting with AI to scale and optimize their methods.
As we saw last year, if attackers manipulate or compromise an AI system, the impact can have dramatic knock-on effects across entire customer bases and partner networks. Traditional threats like ransomware and phishing will continue, but we expect AI-enabled attacks to ramp up, making security by design a critical piece of development for any software infrastructure or application.
7) Companies are investing in digital-twin models of their supply networks to simulate disruptions, optimize inventory and stress-test sourcing scenarios, while Internet of Things (IoT) sensors enable real-time tracking of goods, equipment and environmental conditions across warehouses and transport routes. Cloud-based supply-chain platforms are allowing manufacturers, logistics providers and suppliers to share data more seamlessly and reduce information lags.
8) AI tools can help orchestrate all these processes and information flows into dynamic, streamlined decision-making. Advanced AI systems can automatically model the cost impact of new tariff schedules, classify goods for customs, optimize routing decisions and flag compliance risks across multiple trade lanes.
As trade and geopolitical volatility show no sign of abating, AI-driven decision support will become a core capability. A focus on data quality, governance and integration will thus be one of the major challenges for the U.S. supply chain next year.
9) Manufacturers and retailers are increasingly exploring ways to extend product life cycles, recover materials and design products that can be repaired or disassembled more easily. At the same time, logistics providers are developing capabilities for efficient returns processing, consolidated pick-ups, and closed-loop transport flows.
As a result, platforms and solutions that help companies manage returns, track asset utilization, measure environmental impact or facilitate component recovery will become increasingly popular across U.S. industries this year.
10) It follows that we will see a shift in a mindset where the supply chain is just a cost center to one where it can add value. For example, companies that invest in faster, more flexible manufacturing and distribution networks can launch new products weeks or months sooner than competitors. Those that improve end-to-end traceability and emissions reporting can use their supply chains to meet customer expectations for responsible sourcing and win environmentally focused tenders.
Finally, as proven repeatedly through the ups and downs of 2025, businesses have come to understand that supply-chain performance is increasingly tied to revenue growth, brand trust and long-term resilience rather than cost alone. Supply chain leaders will thus be stepping up to the plate as they are included earlier in strategic decisions.
(Image credit: Getty Images/Diy13)