What if the real issue isn’t the risk, but your blind spot around it? Warehouses push harder for speed, scale and efficiency, yet the thinking behind how they manage risk still lags. It’s not the forklifts or the night shifts that are holding back operations. It’s the blurry, all-in-one approach to risk that masks real threats, like logging all incidents under one category or not analysing their root cause. This behaviour is what stifles performance and creates a culture of guesswork. 

If your risk map looks like a one-size-fits-all spreadsheet, then yes, poor risk understanding is probably dragging your efficiency down too. It’s time to reframe how we think about risk, not as a siloed compliance exercise, but as a driver of sharper operations and smarter business decisions.

The cast of characters in operational risk

Risk doesn’t float around as a general threat. It shows up through real people and physical systems, each bringing their own weight to the equation. You have machines, vehicles, people, workflows, site layout, external contractors, materials movement, visitors… all constantly interacting, all with potential friction points.

Operational risk comes to life through this web of movement and interaction. Yet, most companies still treat it as an abstract category, a box-ticking exercise that allows them to get on with ‘the important things of the business.’ Instead of dissecting the risk profile of each element, companies with a substandard safety infrastructure apply a blanket approach to risk management. For example, they use the same type of safety barrier across the entire facility regardless of the vehicle types operating nearby or enforce generic speed limits without accounting for the presence of pedestrian walkways. The one word to describe this approach is ‘dangerous.’

Risk must be classified in terms of its physical, behavioural and systemic origins. When each factor is visible and accounted for, the reactive cycle ends. A safety barrier that cannot suitably protect your people and assets from your site’s real impact angles or frequency patterns is not protection, but rather a false sense of safety. 

As a result of this misdirected investment in safety, efficiency and productivity suffer. For example, just because a safety barrier claims it can withstand X-thousand Joules, it does not mean it has been independently tested to that standard, or that it can withstand that force repeatedly or across its whole structure. This is why it is imperative to deploy safety solutions that are fit for purpose, independently tested and, most importantly, able to protect from your very own particular risks. Otherwise, you will be under the impression of being safe, yet you are leaving real risk unaddressed.

Your environment shapes your risk – not the other way around

Every facility has its own risk fingerprint defined by its layout, vehicle types, pedestrian walkways and traffic intensity. But too many sites still rely on standardised solutions that ignore this complexity. They segregate people and machines with painted lines on the floor, place the same barrier system near low-speed pallet trucks and high-impact forklifts, or have damaged safety solutions in place that do not guarantee protection in the event of a new impact.

These misalignments reflect a surface-level approach that ticks boxes instead of solving problems. Real risk management starts with questioning how people move, how machines behave and planning an efficient segregation between them. These are examples of what happens when safety infrastructure is not based on how a space is actually used. Misfit solutions offer false security. Real protection begins with matching infrastructure to operational conditions.

The future of risk management is proactive, not reactive

The old model of risk management was built around audits, forms and lagging indicators. But in modern operations, risk changes by the hour or even by the shift, whether that is at night with fewer staff, or a day or week of high e-commerce activity like Black Friday. Waiting for a weekly or monthly safety report to understand evolving risk and adjust does not cut it anymore.

Staff engagement is another benefit of having a good understanding of your own risk. When teams see their feedback reflected in real-time adjustments, they stop viewing safety as top-down enforcement. Instead, it becomes behavioural, part of how they do their jobs better. That change in attitude has a compounding effect. Workers become eyes on the floor, flagging issues before they escalate, feeding valuable insight back into the system.

Risk and efficiency are interlinked 

This is where risk and efficiency are linked because operational efficiency depends on fast feedback loops. That means switching from static documentation to live data. Smart safety infrastructure such as impact-tracking barriers, wearable sensors or predictive maintenance systems powered by the Industrial Internet of Things (IIoT) are what offer this level of visibility. You don’t just spot the problem after the fact. You see risk forming and deal with it in real time.

The payoff of investing in safety is worth it: more efficient and productive operations enabled by optimised internal routes for people and machines, reduced unscheduled downtime thanks to a lack of friction and, most importantly, fewer incidents. The financial case for proactive risk management could not be clearer. The average cost of one hour of downtime in UK factories is just over £5,000, although for larger companies in industries like automotive, it can reach up to £2m. With the average downtime per company per year reaching 49 hours, the costs skyrocket. 

With a sound safety infrastructure in place that helps you prevent downtime, the costs diminish and you create a suitable environment for productivity and long-term growth. The message is simple: in risk, proactivity always outperforms reactivity.

Final thoughts

If you are still seeing risk as a static compliance task, you are missing the bigger picture. The businesses that lead in growth are those that recognise risk as a personal reality, shaped by their unique context, challenges and goals – not as a universal constant. They map it and turn that data into stronger performance. Risk reduction is, effectively, a growth tool. But only if you treat it as a perpetual obligation, not a checklist.

Risk itself isn’t what holds you back. Unidentified risk is. Call it out, bring it into focus and address appropriately. Once you’ve done that, watch efficiency follow the clarity you’ve created.

This week, UK Prime Minister Sir Kier Starmer and US President Donald Trump met to discuss the lowering of tariffs on goods imported to the US. In April, Trump instituted sweeping tariffs as part of his “Liberation Day” celebrations. 

In addition to a blanket 10% tariff on all US imports — a move which Trump said will revitalise US manufacturing and reset America’s trade agenda — many specific countries and industries also incurred additional levies. This included higher tariffs affecting the US’ automotive and steel imports — moves which were expected to severely afflict UK manufacturing.  

Now, following a meeting at 10, Downing Street, Starmer and Trump have this week come to an agreement that alleviates some, but not all, of the US’ imposed levies. The move, hailed by the Labour government as a successful effort to save “thousands of jobs” comes just days after the announcement of a new free-trade deal between the UK and India.

Relief for UK manufacturers 

As a result of the negotiated deal, car export tariffs will reduce from 27.5% to 10% — a change the government says will save “hundreds of millions a year for Jaguar Land Rover alone.” Above a quota of 100,000 UK cars — slightly less than the UK exported last year — the tariff rates rise again to 27.5%. Sir Kier Starmer called the deal “a huge and important reduction.” 

Cars are the UK’s biggest export to the US, selling roughly £9 billion per year. It’s also not clear if the UK will lift or alter the 10% levy the country currently charges on US car imports. 

The UK’s steel supply chain is also seeing tariff reductions. The industry was, according to the government, “on the brink of collapse just weeks ago,” and will now no longer face tariffs thanks to the new deal. The UK negotiated the 25% tariff down to zero, meaning UK steelmakers can carry on exporting to the US as before. The move follows the UK government’s move to temporarily renationalise Chinese-owned British Steel last month. 

Starmer and Trump also agreed on new reciprocal market access on beef – with UK farmers given a quota for 13,000 metric tonnes. The government was quick to assure citizens that the deal will result in no weakening of UK food standards on imports. The deal also saw the removal of the UK’s tariff on ethanol from the US, down to zero.

Donald Trump’s return to the US presidency, and his subsequent decision to make good on the protectionist, pro-tariff trade policies from his first term and 2024 campaign, have intensified uncertainty surrounding global trade and economic growth. His trade policies not only affect the US economy but also have worldwide repercussions.

The rise in import tariffs has sparked growing international concern, impacting investment and destabilising global value chains. Europe was quick to respond to Trump’s “Liberation Day” tariffs, with the European Commission announcing a €26 billion retaliation package in April as a countermeasure against Washington’s tariffs.

This trade conflict will have a significant impact on global logistics and, even more critically, on international trade. But how will these effects materialise, and what can we expect in the coming months if the tariff war continues?

Rising Costs and Disruptions in Supply Chains

The increase in import costs will be inevitable. Businesses will have two choices: pass the added costs onto consumers—making goods more expensive—or absorb them, leading to financial losses and budget adjustments.

In this context, logistics will be directly affected. Additional fees at ports and customs will add to costs, some companies will relocate distribution centers to avoid tariffs, and regulatory compliance expenses will rise, further driving up supply chain costs.

Moreover, stricter customs inspections will cause shipping delays, disrupting deliveries and creating bottlenecks in distribution networks. As a result, many companies will face shortages of products or raw materials, limiting their production capacity and increasing the price of available goods. To counteract this, businesses will seek alternative suppliers—a process that comes with additional costs and complexities, further destabilizing supply chains.

Redefining Trade Routes and Sector Instability

As tariffs rise, many companies will reroute imports and exports through third-party countries to minimize costs. However, this strategy comes with major challenges: delivery times will increase due to more complex trade routes, administrative burdens will rise with new regulations, and congestion at alternative ports will further strain logistics efficiency. Consequently, global trade will slow down, leading to higher costs and more uncertainty across supply chains.

The higher cost of imported goods may also cause a drop in demand, further reducing global trade volumes. This will affect cargo transportation by sea, air, and land, disrupting operations at ports and logistics hubs. Additionally, uncertainty will discourage investment in infrastructure and logistics technology, limiting the industry’s ability to adapt to new challenges. As a result, the slowdown in global trade could trigger a ripple effect, impacting the broader economy.

In the UK, the automotive, machinery, and steel/aluminium industries and pharmaceuticals could experience reduced demand as US buyers face higher costs. While this week will likely see the US and UK announce a lower-tariff deal to spare the countries’ auto industries, top economists warn this will not be the kind of “free trade” deal that defined Anglo-American relations in the 1990s. 

The global tariff war is only just beginning. Constant changes in trade policies and unexpected announcements not only heighten political and economic instability but also significantly impact global logistics. Are we truly prepared for a new era of logistical challenges?

The global supply chain landscape has always been dynamic. However, recent years have seen a dramatic shift in how businesses and professionals approach logistics, distribution and sourcing. 

From the upheavals caused by the COVID-19 pandemic to the rise of technological advancements such as digital twins, Artificial Intelligence (AI) and the increasing urgency of addressing climate change, the challenges are clear. But so too are the opportunities. Now more than ever, supply chain professionals must adopt innovative strategies and embrace new technologies to stay resilient and competitive in a constantly shifting environment.

Adapting to Disruption: The Need for Resilience

One of the most profound lessons from the past few years has been the need for supply chain resilience. The pandemic exposed the fragility of just-in-time (JIT) systems and highlighted how quickly global disruptions can escalate. While many companies had previously focused on cost-efficiency and speed, the crisis forced them to re-evaluate their supply chain strategies. In response, businesses are moving towards more resilient models that incorporate flexibility, agility, and risk management.

“Businesses we work with are increasingly aware of the need for diversification in their supply chains,” says Aman Parmar, Head of Marketing at BizSpace, a provider of industrial space to UK based SMEs. “Nearshoring and diversifying suppliers can help mitigate the risk of disruptions. This is especially important as companies move away from heavy reliance on single-source suppliers or geographically concentrated regions, such as in Asia.”

Nearshoring, or bringing production and sourcing closer to home, is a critical response to global disruptions. It offers companies an opportunity to reduce lead times and limit exposure to geopolitical tensions. It can also help address environmental concerns around long-distance shipping.

Technological Innovation: The Rise of Digital Twins and AI

Technology continues to be one of the most transformative factors in the evolution of supply chains. Among the innovations driving change is the concept of “digital twins.” A digital twin is a virtual model of a physical asset, process, or system. It allows companies to simulate and analyse different scenarios in real time. By creating a digital replica of their supply chains, businesses can gain valuable insights. These include exposing inefficiencies, forecasting disruptions, and testing out various strategies for improvement.

“Digital twins enable businesses to better predict demand fluctuations, supply shortages, and logistical issues,” says Parmar. “This technology provides a way to make data-driven decisions, reduce costs, and improve decision-making accuracy.”

In parallel, AI is playing an increasingly crucial role in optimising supply chains. From automating warehouse management systems to enhancing route planning for transportation, AI is streamlining operations across industries. AI-powered predictive analytics are helping businesses better forecast demand, which in turn allows for better inventory management and less waste.

Decarbonisation: Navigating the Climate Crisis

Businesses across the world face increasing pressure to reduce their carbon footprints. As a result, decarbonising supply chains has become a major are of focus. The transportation sector accounts for a significant portion of global emissions. Therefore, it is one of the primary areas in which companies are looking to make changes. From using electric vehicles (EVs) for last-mile delivery to implementing greener packaging solutions, many businesses are rethinking how they operate to reduce their environmental impact.

The UK government has set ambitious targets to achieve net-zero emissions by 2050, and supply chain professionals must find ways to align with these goals. This includes making decisions on energy-efficient logistics, sustainable sourcing, and reducing waste in packaging. Innovations such as biodegradable packaging and the use of RFID (Radio Frequency Identification) to optimise inventory management are examples of how businesses are embracing sustainability.

“Decarbonisation is not just a regulatory requirement; it’s increasingly a competitive differentiator,” says Parmar. “Consumers, especially younger generations, are more aware of the environmental impact of their purchases, and they prefer companies that are transparent and committed to sustainability.”

AI, IoT, and the Future of Supply Chains

The Internet of Things (IoT) is another transformative force in supply chain management. By connecting devices, sensors, and equipment across the supply chain, businesses can collect real-time data on everything from inventory levels to the temperature of goods in transit. This data allows for greater transparency, improved traceability, and more proactive decision-making.

In particular, the food and retail industries have benefited from IoT’s ability to track perishable goods through the cold chain. By ensuring that products are kept at the right temperature throughout their journey, businesses can reduce waste and maintain the integrity of the products they deliver.

Embracing Change: The Role of Supplier Relationships and Third-Party Logistics

As global supply chains become more complex, maintaining strong supplier relationships and leveraging third-party logistics (3PL) providers is essential. By collaborating with suppliers to share information and streamline processes, businesses can increase visibility across their supply chains, which ultimately enhances efficiency.

The rise of e-commerce has also brought about an increased reliance on 3PLs, as businesses look to outsource logistics operations to companies that can handle everything from warehousing to last-mile delivery. For many smaller businesses, working with a 3PL offers access to a level of expertise and infrastructure that they would otherwise not be able to afford on their own.

Conclusion

The challenges facing global supply chains are significant, but the opportunities for innovation are equally substantial. By focusing on resilience, adopting cutting-edge technologies, and prioritising sustainability, businesses can not only weather disruptions but thrive in the face of change. The future of supply chains will require agility, transparency, and a commitment to ongoing transformation.

As Parmar concludes, “The future of supply chains lies in adaptability. Those who can embrace new technologies, collaborate with partners, and prioritise sustainability will be the ones leading the way forward in a rapidly evolving global market.”

Through exploring these key trends and strategies, businesses can position themselves to not only survive but thrive as the supply chain landscape continues to evolve.

Newly imposed tariffs on U.S. imports, and the threat of many others, are leaving companies across the country unclear as to what’s next and U.S. consumers uncertain about how they’ll be affected. While consumers will inevitably face higher prices and product shortages, manufacturers are up against more nuanced challenges. Like many businesses, they now must bear the burden of tariff costs while overhauling the supply chains that they’ve spent decades streamlining—while ensuring compliance every step of the way. Manufacturers operating in highly regulated industries, like aerospace, defense, and medical technology, must navigate even stricter compliance requirements and a supplier base limited by a lower number of skilled manufacturing vendors and new economic realities. 

As a result, many U.S. manufacturers are looking to onshore operations to address the impacts of these recently imposed tariffs—and prepare for those to come. But making that transition to build new infrastructure, train skilled manufacturers, and shift to more resilient onshoring solutions is neither quick nor realistic across many sectors.

Manufacturers can’t rely on onshoring alone, especially in the short-term.

Onshoring, or relocating production operations back to domestic soil, is an effective strategy in theory. It decreases lead times, increases control and visibility into the supply chain, and circumvents tariffs on international imports.

Unfortunately, this doesn’t happen overnight, and the economic realities of the domestic labor market don’t allow for a rip-and-replace model. It is much more involved than simply moving manufacturing to the U.S.

Supply chain operations have deep and complex interconnections across borders. The U.S. relies on other countries not only for materials but also for their infrastructure and labor to create those materials. Bringing this stateside would require months for simple operations and up to decades for more complex manufacturing processes, given the need to develop and scale new infrastructure and upskill workers. Even if this were immediately possible, there are raw material considerations. 

While the U.S. has significant resources, some materials required to manufacture products are not available domestically.

When onshoring isn’t an option

There are also certain suppliers, such as those that build mature node electronic components, that simply can’t be replaced in the short term. If we abruptly limit or cut off access to foreign markets for these kinds of materials and components, the remaining supply chain quickly bottlenecks, causing shortages in critical industries. This would mean critical PCBA and related subassemblies used in communication, transportation, defense, and many other industries could not be manufactured. 

So, when the US imposes tariffs on countries where these specialised suppliers are located, manufacturers are left with no choice but to pay them and absorb higher costs themselves or pass them along to their customers. 

Manufacturers should, and likely need to, consider onshoring at least some of their production to be more cost-effective, support domestic manufacturing and economic growth, and drive more efficient processes. However, it isn’t realistic for this to happen quickly enough to avoid the impacts and rippling effects tariffs will have on their supply chains.

The good news is that manufacturers can strengthen their supply chain resilience in ways other than onshoring. Here are four ways they can proactively mitigate risks and build a more adaptable supply chain in the short term:

1. Build A Diversified Supplier Network

Many manufacturers have spent decades getting their supply chains to a point where they heavily rely on a small circle of suppliers they regularly work with to minimise touchpoints, keep costs low, and drive efficiencies. The appeal of handing back office supply challenges to tiered vendors was a logical and valuable choice. Unfortunately, with today’s uncertainties, they can no longer afford a hands-off approach. 

Manufacturers are now expanding or shifting their supplier networks to mitigate delays and shortages, attempting to ensure production continues at unit economics that still fit existing business models. But manufacturers must go beyond increasing the number of suppliers to mitigate risk—to leverage better optionality they need to diversify geographically and consider where subcomponents are sourced to eliminate single points of failure. 

While manufacturers should explore this in the near term, they can’t compromise on due diligence: establishing relationships with new suppliers requires thorough research into vendor ratings, PPAP, and industry reputation. For critical assemblies or components, a site visit to fully understand a supplier’s capabilities and quality control processes may be necessary before engaging with them.

For manufacturers in highly regulated industries, who are typically constrained to a list of pre-vetted suppliers, they can diversify by activating suppliers in their approved vendor list who may not currently be engaged, ideally while negotiating transparency across vendors into where they’re sourcing subcomponents from and their ability to ramp up or down quickly in response to demand shifts. 

2. Invest in Technology to Track Thousands of Moving Components in Real-Time

A manufacturer’s supply chain is only as strong as the visibility they have into it. Without a real-time look into their tiered supply chain, it’s difficult for manufacturers to anticipate risks, respond quickly to disruptions, and make informed decisions to drive efficient operations.

It’s easier said than done for companies to achieve this kind of transparency. Every time a ccompany procures or moves a component—from factory to warehouse to assembly line—it must document the latest stage in the journey. This includes details like its country of origin, compliance certifications, and any material transformation made along the way. With thousands of parts moving at any given time, the sheer volume of data makes tracking nearly impossible without the proper systems in place. Even a single component or part’s traceability is challenging to track. Did that screw come from a lot of materials from McMaster or Granger? Was this resistor from a lot that originated in Taiwan or China?

These questions can be difficult to answer, and when an OEM digs into the details with their manufacturing partners, the answers can sometimes be murky and can affect the economics and compliance of a final assembly. This makes the risks during manufacturing more obscure, possibly compromising compliance, and makes traceability nearly impossible for efficient maintenance and repair if errors arise. 

“With a rise in tariffs on U.S. imports, having documentation readily available is even more critical” — Phillip Gulley, Co-Founder and Chief Strategy Officer, Cofactr

For example, for duty drawbacks—or a refund on duties paid that are later exported or destroyed—manufacturers must have precise documentation. Just one missing piece of documentation can result in rejected claims and lost refunds.

The problem is that many manufacturers still rely on invoices and records tracked through physical paperwork, across multiple digital platforms, and in spreadsheets, none of which are scalable or efficient. The only way to ensure manufacturers have every piece of documentation on their thousands of moving parts—exactly when they need it—is to bring every part of their supply chain into a unified and centralised platform. 

We’re at a turning point where implementing technology into the supply chain is no longer a nice-to-have. From AI to IoT to blockchain solutions, manufacturers need to lean into technology to automate processes, capture and analyse data in real-time, and consolidate all moving pieces to have an end-to-end view of their supply chain. It’s the only way they’ll be able to keep their operations intact in such an uncertain and rapidly changing environment. 

3. Understand Where Each Individual Part Comes From to Properly Assess Costs

Manufacturers’ visibility into their supply chain needs to go beyond knowing who direct suppliers are and where they’re located. To get the full picture on their exposure to tariffs, manufacturers need visibility into their tier-two and tier-three suppliers—the sources of components and subcomponents. Otherwise, they risk underestimating the true cost or risk exposure of their products.

For example, a manufacturer might assume tariffs don’t apply to a specific part because their direct supplier is located domestically. However, if that supplier imports subcomponents from a now-tariffed country, costs for that supplier will rise. The supplier will then pass those costs down the chain. If the manufacturer doesn’t have visibility into these deeper supplier relationships, they could face unexpected price increases.

Keeping track of every component, subcomponent, and their country of origin—in addition to how various tariffs apply as they continue to change—is nearly impossible to do manually. Manufacturers can leverage technology to streamline and analyse part movements, assess tariff impacts, and calculate landed unit costs. Automating these processes also helps make more informed decisions on sourcing and planning to mitigate unit cost increases and delays in manufacturing. Plus, real-time tracking across distributors can help manufacturers continuously monitor changes in suppliers’ ownership, location, and compliance statuses—all of which can change to significantly impact products. 

With tiered supply chains, assessing risk without compromising IP becomes even more challenging. But clearly defining risks, communicating them effectively across vendors, and strategically using technology to distill thousands–if not millions—of parts into actionable insights leads to smarter, more effective decision-making. Utilising technology to protect IP while surfacing risk across upstream vendors can keep prime manufacturers alerted to the risk profile of their tiered vendors. 

4. Build Out Worst Case Scenarios on a Virtual Model of the Supply Chain

Arguably the most effective way for manufacturers to build a resilient supply chain is to prepare for disruptions before they happen. With the right protocols and systems in place to address disruptions the moment they occur, manufacturers will be able to mitigate, or even prevent, severe operational and financial impacts. 

The first step is to identify any vulnerabilities in their supply chain operations. Manufacturers can do this by building a digital supply chain twin, or a virtual model of the entire supply network. A digital supply chain twin lets manufacturers simulate different disruption scenarios—such as tariffs, sanctions, and logistical bottlenecks—and see exactly how these disruptions would affect their supply, either ahead of an event or in real-time. By testing different scenarios ahead of time, they can identify weak points and create contingency plans to minimise risks before they turn into crises. 

This goes beyond financial risk. A digital twin also helps manufacturers assess their vulnerabilities across multiple factors, including geographic (whether at a broad level like a specific region or at a granular level, such as a single supplier or commodity), cybersecurity, or reputationally. 

As global supply chains face increasing pressures from tariffs, manufacturers need to proactively address the uncertainties ahead. By diversifying their supplier base, investing in technology to improve supply chain visibility, and building a digital supply chain twin, manufacturers can build more resilient operations that let them stay agile and prepared in the short and long-term future.

Companies are aggressively investing in AI across supply chains to counter inflation and trade volatility, but a growing execution gap threatens to derail these efforts, according to the second annual State of Supply Chain 2025: Balancing Inflation, Investment & Innovation report from RELEX Solutions.  

While 60% of surveyed companies are prioritising AI and automation investments, nearly half (44%) can’t find the specialised talent needed to implement these technologies. Companies also struggle with budget constraints that limit their ability to scale AI initiatives (43%) as well as poor data quality (39%). 

Taking the pulse of the supply chain

The comprehensive study surveyed 500+ retail, CPG manufacturing, and wholesale professionals across seven countries, revealing how economic headwinds are simultaneously driving technology investment and forcing strategic pivots: 

• Inflation is reshaping retail strategies – 31% of retailers are optimising operations and 31% are adjusting pricing to stay competitive 
• Private label expansion has become mainstream – 59% of retailers are growing own-brand portfolios as consumers seek value 
• Food and beverage manufacturers face margin pressure – 70% have increased discounting aggressively, while 40% have introduced value-tier products 

These findings expand on the early released findings of the report showing 60% of companies fundamentally restructuring their supply chains, with 52% citing demand volatility as their primary challenge and 47% concerned about tariff uncertainty and trade disruptions. 

“Today’s supply chain leaders face a dual challenge – they must innovate through technology while adapting to economic pressures,” said Dr. Madhav Durbha, Group Vice President of Manufacturing Industry Strategy at RELEX Solutions. “The gap between AI’s potential and its practical implementation represents both the greatest risk and opportunity in supply chain transformation today.” 

The report also identifies Generative AI (59%), Predictive AI (43%), and Cloud-native solutions (34%) as the top technology investment priorities, with most companies allocating between 5-20% of their technology budgets to AI-driven solutions despite market volatility. “As businesses navigate economic volatility and evolving consumer behaviours, the report underscores the importance of flexible supply chain strategies that combine technology investment with operational agility,” said Durbha. “Organisations that can bridge the gap between AI’s potential and practical implementation will gain a competitive edge, while those that lag behind may struggle to keep pace.”

At Manifest Vegas this year, we caught up with some of the biggest names in the logistics space, hoping to find out not just how they plan to mitigate the challenges of an increasingly fraught geopolitical and economic climate, but also how they plan to ensure the supply chain will continue to deliver value for the business as a whole. 

It probably shouldn’t come as a surprise that resilience was the word we heard repeated by virtually everyone in the sector, from freight haulers to third-party solutions providers. Everyone’s trying to figure out how to weather a less predictable world; it’s no longer a matter of if, but when and where disruption will hit the supply chain, so figuring out how to mitigate its effects is key. 

“Geopolitical tensions, fluctuating regulations, and economic uncertainties are poised to create complex pain points along the supply chain in 2025,” warns Gene Welsh, CTO at logistical services provider MODE GLOBAL.  For Welsh, the year ahead threatens “trade wars, tariffs, and shifting alliances” — all of which have the potential to disrupt supply chains, something he notes will both increase costs and cause delays. 

Tariffs, uncertainty and the unpredictable US

“One of the biggest uncertainties shaping supply chains in 2025 is trade policy instability, particularly in North America,” said Tony Zasimovich, Global Retail Vertical Lead at DP World. 

From Trump Tariffs to the activities of Elon Musk’s Department of Governmental Efficiency (DOGE) making sweeping cuts to the federal government, the regulatory landscape facing organisations based in or doing business with the US is looking increasingly complicated. 

The Trump administration’s protectionist policies are part of an emerging picture which, According to Zasimovich, raise “concerns about new tariffs, shifting rules of origin, and increased compliance costs, creating a more complex regulatory landscape for cross-border trade.” He adds: “At the same time, the implementation of higher US tariffs on China, Canada, and Mexico is forcing businesses to reassess their sourcing and transportation strategies. While some are diversifying through friendshoring and multi-sourcing, these shifts can introduce longer transit times, increased costs, and new regulatory hurdles.” 

In response to these challenges, Mark Kunar, CFO and Chief Strategy Officer at DHL agrees that “resiliency will be at the forefront for organisations in 2025,” noting that, logistics networks, “whilst previously constructed for efficiency and just-in-time processes,” will need to be restructured to provide “enhanced resiliency and regulatory compliance” in order to stay afloat. “Geopolitical tensions, regulatory changes, and economic pressures create uncertainty for both our customers and their consumers and can lead to increased costs, compliance risks, and supply chain disruptions. Trade and tariff disputes will impact the cross-border flow of goods, creating a strain on sourcing strategies and the timeliness of bringing goods to market.” 

Regionalisation as a path to resilience 

While none of this necessarily represents a new attitude — people were already talking like this a few months into the COVID-19 pandemic — the discussion at this year’s Manifest Vegas event felt different. Rather than patch and tweak and make older supply chain models sturdier, it’s starting to feel as though the foundational structures that make up global trade networks are beginning to shift. The rulebook is being rewritten.  

If you talk to Zasimovich, he’ll tell you that 2025 is going to be “a year of strategic supply chain realignment, driven by shifting trade policies, economic uncertainty, and the growing role of regionalised logistics.” 

Driven by the mass-levying of tariffs against China, Mexico, and Canada, the spiralling trade war threatens to eclipse the first one waged by the Trump administration during 2016. In response, nearshoring has become, “one of the biggest transformations underway” in the logistics space, especially in North America. Zasimovish points out that, with the US’ share of imports from China dropping significantly—from 21.6% in 2017 to 15% in 2025—organisations are looking to shift their supplier ecosystems closer to home. Of course, profoundly restructuring the way that goods and materials move around the world isn’t a straightforward process. 

“2025 will be a year of strategic supply chain realignment, driven by shifting trade policies, economic uncertainty, and the growing role of regionalised logistics” — Tony Zasimovich, Global Retail Vertical Lead, DP World

For Zasimovich, 2025 therefore presents “a major growth opportunity in nearshoring,” with nations like Mexico, Poland, and Vietnam capitalising on their relative neutrality (as much as anyone can be neutral in a Trump-dominated trade landscape) to cement their roles as regional manufacturing and logistics hubs. He adds that these shifts aren’t “just about proximity” but rather the process of “building faster, more resilient supply chains that minimise risks from geopolitical tensions and trade disputes. By investing in freight networks and contract logistics services, DP World is helping businesses adapt to evolving trade dynamics and capitalise on nearshoring momentum.” 

He adds that the shift we’re seeing is rooted in more than just organisations’ reactions to tariffs and political instability. At the same time, businesses are restructuring their supply chains for “faster lead times, reduced transportation costs, and supply chain resilience.” Bringing operations closer to key markets is a natural and obvious part of that process.. However, he adds that the transition isn’t straightforward. “Nearshoring introduces new regulatory, infrastructure, and labor cost challenges, which means companies will need to invest in supplier partnerships, digital integration, and regional warehousing to fully capitalise on this trend,” Zasimovich adds. 

Nurturing resilience in the supply chain of the future 

Reflecting on the increasing emphasis supply chain and logistics companies are placing on resilience, Andy Moses, senior vice president of solutions and sales strategy at Penske Logistics notes that “among the answers is having clean data, system integrations and consistent process management — all of which enables supply chain managers to respond faster to needed changes. Finally, having logistics provider relationships that are mutually beneficial in all business cycle positions, with shippers having access to capacity and resources when they most need it.” 

Kunar agrees that “technology and automation will also be foundational to designing agile and flexible logistics that can withstand the complexity of dynamic geopolitical environments.”  However, at the same time, “customers will always want value.” Despite the increasingly complex nature of global logistics, Kunar reflects that “customers are asking: ‘How can a logistics partner drive value in transportation, warehousing, packaging, and inventory across their supply chain?’”

Leaning on the ecosystem 

According to Moses, partnerships and collaboration in the ecosystem are going to be at the heart of driving resilience and value as “shippers continue to seek reliable partners to take over the management and execution of complex logistics functions.”  

For example, in the retail sector — an industry with an especially complex, fast-moving supply chain and narrow margins —ReturnPro example — finding new ways to mitigate cost/losses with partnerships in the supply chain, like ReturnPro, which is using AI and machine learning to mitigate lost revenue in the retail sector. 

“At every critical point – return, touch, and resale – AI determines the most profitable path for each item” — Sender Shamiss, Co-Founder and CEO, ReturnPro  

A recent report from NRF estimates the total cost of retail returns at around $890 billion in 2024. Experts expect that number to climb even higher this year.  To help recover their net margins, retailers are looking to their supply chain partners. Companies like ReturnPro leverage AI to analyse large amounts of data in real-time, streamlining return authorisations and predicting the most efficient reverse logistics routes, as well as picking up trends in the reasons for consumers returning items.

“At every critical point – return, touch, and resale – AI determines the most profitable path for each item, calculating total costs and outlining the optimal steps to maximize recovery and extend product life,” says ReturnPro Co-Founder and CEO,  Sender Shamiss. The company also uses machine learning algorithms to drive its predictive analysis, which help manage returns and maximise resale value. “By analysing historical data, product conditions, and market trends, these algorithms forecast return rates, identify the best recovery options – such as restocking, refurbishment, or resale – and predict an item’s resale value with precision,” explains Shamiss. “This allows retailers to deploy dynamic pricing strategies and efficient return-to-vendor processes.” 

DHL is also exploring the supply chain after the point of sale as an area for logistics companies to create value, observing that there’s “tremendous potential in reverse logistics”. He highlights DHL’s recent acquisition of Inmar Supply Chain, which he argues “will allow us to better streamline the returns process and address circularity within our sectors.” 

A more resilient, digitally enabled supply chain 

ReturnPro wasn’t the only organisation at Manifest Vegas highlighting the potential for smart, AI and ML-powered solutions to the supply chain sector’s problems. Welsh from MODE Global added that he expects artificial intelligence, machine learning, and the Internet of Things (IoT), “to further integrate into logistics operations, enhancing automation, real-time tracking, and predictive analytics,” as 2025 continues. “These innovations will drive efficiencies and enable organisations to meet the increasing demands for faster, more reliable, and sustainable delivery options.” 
There’s little way to tell exactly what the year ahead will bring in terms of pain points and challenges. However, logistics and supply chain companies are unanimously preparing to leverage technology and their partner ecosystems to drive resilience and create new value at all points of the supply chain — even places that previously escaped notice.  

Retail is undergoing a seismic shift. Consumer expectations are higher than ever and the need for flexibility is now a business imperative. What was once considered impossible or a rare perk – such as next-day delivery – is now the norm. Technological advancements continue to push the boundaries of efficiency, with innovations like drone deliveries becoming increasingly viable prospects. To remain competitive in this dynamic environment, supply chain and logistics operations have had to evolve at an unprecedented pace.

Adding to these challenges are continued global headwinds. Economic instability, ongoing conflicts, Brexit-related regulatory complexities, climate change, and the enduring effects of the pandemic are all making for a more volatile supply chain landscape. Businesses must now navigate an era defined by disruption, requiring resilience and agility at every stage of the retail operation.

At the same time, there have never been more opportunities to enhance productivity. Advances in automation, robotics, and data-driven decision-making offer significant potential for streamlining logistics, improving accuracy, and boosting efficiency. Investing in these innovations is no longer optional—it is essential for survival. This doesn’t necessarily have to mean widespread overhauls which come at significant cost. Instead, smaller, strategic upgrades and additions can elevate operations and help teams improve on important KPIs.

Having said this, supply chain transformation must be approached with caution. The looming threat of new global tariffs and trade barriers may push businesses to overhaul their logistics strategies. However, hasty decisions can lead to costly errors. Before embarking on significant changes, companies must thoroughly assess key factors. These include operational capabilities, scalability, flexibility, cost structures, and sustainability practices. Automation will play an increasingly critical role, but its implementation requires careful planning to mitigate risks and ensure long-term success.

The risks of poor supply chain planning

Luxury streetwear retailer End Clothing recently reported a stark financial downturn. The company posted an annual pre-tax loss of £43 million. This is a dramatic shift from the £9 million profit recorded the previous year. The primary cause? Disruptions stemming from the implementation of a new automated fulfilment system. What was intended to improve efficiency instead led to significant logistical challenges for the business. These included shipping delays and stock write-offs – all of which ultimately undermined the business’ bottom line.

Similarly, ASOS encountered substantial setbacks after deciding to mothball a large US warehouse, resulting in a £190 million impairment charge. The decision to consolidate fulfilment operations back to the UK and a smaller US site highlights the risks of large-scale transformations without incremental execution. This move from across the pond was likely driven by slower-than-expected regional growth and heightened competition from fast-fashion giants such as Shein and Temu.

ASOS does anticipate long-term benefits from consolidating stock back in the UK. These range from reduced duplicate inventory, and lower space requirements, to improved inbound logistics. However, the immediate costs of moving too quickly are significant. Additionally, while streamlining operations might optimise internal efficiencies, last-mile delivery remains a major expense, potentially offsetting expected savings.

While it’s undeniable that the future of the retail industry will be driven by data-driven strategic planning, careful evaluation is essential before making any major changes to supply chain operations.

Strategies to mitigate supply chain risks

To prevent the pitfalls experienced by End Clothing and ASOS, retailers should take a phased approach to supply chain transformation. At SCALA, we advise businesses to adopt an incremental method. This involves implementing large-scale operational shifts gradually, allowing time for continuous testing, troubleshooting, and change management before full deployment. Phased rollouts reduce the risk of widespread disruption, giving retailers time to evaluate the best course of action for their business.

When implementing automation or restructuring fulfilment operations, businesses should prioritise adaptable solutions that can evolve with changing consumer demand and economic conditions. Before committing to major warehouse investments, businesses must accurately assess regional growth trends and competitive pressures. In doing so, they can avoid overexpansion or misalignment with demand.

Businesses should evaluate any logistical transformation in terms of both cost savings and environmental impact, as well as effect on customer experience. A lack of environmental responsibility, delays, stock shortages, or unreliable fulfilment are all factors which can damage brand loyalty and long-term profitability.

To support this process, especially when undertaking large-scale transformations, retailers should consider engaging a third-party expert or consultant from the outset. These organisations can help navigate the strategy, implementation, and early operational phases. Leveraging their expertise and experience, businesses can conduct comprehensive feasibility studies. These include centre-of-gravity analyses, assessments of transport route efficiency, and evaluations of the environmental impact of proposed changes. By identifying the optimal logistics structure tailored to the specific market conditions of the business, retailers can significantly reduce the risk of costly missteps and enjoy long-term operational success.

The road ahead for retail logistics

The future of retail logistics will be shaped by intelligent automation, strategic adaptability, and data-driven decision-making. While the risks of transformation are significant, so too are the opportunities. 

Retailers that approach supply chain evolution with careful planning, iterative implementation, and a clear focus on customer satisfaction will be best positioned for success. By learning from past missteps and embracing a more strategic, flexible approach, businesses can build resilient, future-ready operations that meet the ever-changing demands of modern retail.

This year is going to see compliance teams redefine what it means to truly know their third parties. The Corporate Sustainability Due Diligence Directive, in particular, has brought a sharper focus on the question: how well do you really know your third parties? 

For many companies, the answer is increasingly “not well enough.” In 2024, KPMG revealed that almost half (43%) of organisations have limited to no visibility into their tier-one suppliers, despite 87% of respondents seeing visibility as ‘critically important’.

Compliance processes and technologies built in the 1990s are no longer adequate or sufficient to protect against today’s risk landscape. Maintaining an effective third-party due diligence programme now requires the ability to quickly analyse vast amounts of unstructured data about third parties. Without this capability, compliance teams can’t take a truly risk-based approach, leaving companies exposed to supply chain risks. 

It isn’t about whether AI should play a role in your system, that debate is behind us. The question is how quickly you can adopt the technology to stay ahead of evolving third-party risks. In addition to the continued pervasiveness of bribery and corruption, today’s risks are driven by a much more complicated regulatory environment, spanning globalised supply chains, prescriptive human right laws, and nuanced ESG factors. 

2025: The year to get your ducks in a row 

Global supply chains are more complex than ever, often spanning multiple countries and involving countless entities. For compliance teams already working under tight deadlines, this complexity creates significant challenges. The Corporate Sustainability Due Diligence Directive (CSDDD), a major EU regulation, is raising the bar for third-party due diligence. It requires companies operating in or selling to EU markets to conduct risk-based due diligence across their entire supply chain, including upstream and downstream partners.

Meeting these rising expectations isn’t just about screening third parties. Maintaining an effective compliance programme now demands the ability to quickly analyse vast amounts of unstructured data to uncover nuanced risks like human rights violations, forced labour, and environmental harm. Current tools often fall short, offering only binary results: a third party is flagged or it isn’t. This oversimplification leaves companies exposed to hidden risks and undermines their ability to take a truly risk-based approach.

Compliance teams frequently rely on web searches with specific search strings to find real-time risk information, but this process is limited. Search suppression often buries critical information, and manual methods rarely go beyond the first few pages of results. This adds strain to already overstretched teams and makes it difficult to comply with increasingly prescriptive regulations.

The case for AI-powered due diligence

Suppliers often work with their own third parties, creating complex networks that span across the globe. It’s no longer enough to simply know your tier 1 suppliers. A lack of visibility into the layered tiers of your supply chain can have serious implications for organisations in every industry, particularly when it comes to meeting regulatory requirements. Now, organisations must go much deeper into their supply chains than what’s possible through a manual process, which puts immense pressure on resources.

AI technology is changing the procedures behind this. Unlike manual processes, AI gathers vast amounts of information, analyses it for risk, and presents findings in a clear, actionable format that resembles a human-written report. This enables compliance teams to conduct due diligence on more entities, faster and earlier in the business relationship, preventing risky entities from entering the supply chain in the first place.

Advanced tools powered by Natural Language Processing (NLP) and Large Language Models (LLMs) go beyond static databases to identify nuanced risks, such as bribery, corruption, and ESG violations. In minutes, these tools can generate detailed reports that highlight AML risks, risky associations, and regulatory red flags that manual checks might miss.

By applying a truly risk-based approach, compliance teams can allocate their resources more effectively. For example, they can quickly advise procurement teams not to proceed with high-risk vendors after an initial interaction, saving time and resources. Analysts can then focus their efforts on mitigating risks for flagged entities, rather than wasting time on low-risk ones.

Where companies go from here

Implementing changes to meet the requirements of new regulations like the CSDDD is no small task. However, the benefits are significant. AI enables organisations to streamline their compliance processes while gaining deeper insights into their supply chains.

Compliance teams have an opportunity to change what it means to truly know their third parties. By embracing AI, they can better meet regulatory requirements and build a more resilient, transparent, and ethical supply chain. The question is no longer whether AI should play a role, but how quickly companies can adopt it to stay ahead of evolving risks.

In the past few years, companies have weathered a seemingly constant array of challenges. Organisations have faced everything from a global pandemic to component shortages, geopolitical turmoil and an ongoing battle to attract talent. 

To effectively respond to disruption, decision-makers need to learn to manage the various company dials in their control.

In addressing this, decision-makers first need to fully understand how their their companies work. Then, they can focus on how to manipulate different dials in the supply chain and manufacturing ecosystems. Once they do this, they can optimise their product lifecycle and respond effectively to disruptions.

These dials — and the degree to which they are turned up and down — will vary from company to company. However, organisations must take decisive steps to adopt advanced technologies, streamline processes, and secure a dependable, well-trained workforce. 

Embracing Industry 4.0 technologies and solutions 

In 2022, MIT Machine Intelligence for Manufacturing and Operations (MIMO) and McKinsey partnered to survey 100 high-performing companies across sectors. Their goal was to learn how they deploy machine intelligence (MI) and data analytics for manufacturing and operations. 

The study found that ‘overall, those who extracted the biggest gains from digital technologies had strong governance, deployment, partnerships, MI-trained employees, and data availability. They also spent up to 60% more on machine learning than their competitors.’

Deploying advanced manufacturing technologies enables resiliency and competitiveness in an increasingly digital world. However, to gain the greatest advantage from these Industry 4.0 improvements, companies must fully commit to the process. This involves investing in areas like ongoing workforce training and development.

Companies must weigh the initial cost of implementing advanced manufacturing technologies with the potential benefits. These can include optimised production lines, less waste, and higher visibility into the product lifecycle. Therefore, the best forward strategy looks different for each company. Manufacturers of complex, higher cost, and longer lifecycle products — such as automotive and medical devices — may choose to invest in highly specialised automation solutions to optimise their product lines.

In contrast, a manufacturer who produces a high mix of consumer lifestyle products may find that it is more cost-effective to implement ‘vanilla automation’. This refers to automation processes that can be used in many different projects to carry out common steps. These steps include simple tasks like fastening screws, applying labels, and packaging products.

Streamlining and optimising processes

Fully realising the promise of Industry 4.0 goes beyond the acquisition of advanced technologies. Organisations need a firm grasp on process management, incluing the application of Six Sigma and lean manufacturing principles during implementation. Without them, companies may still be left with idle machines, underutilised software platforms, or poor-quality products. 

For example, a manufacturer may automate a manual inspection process while not clearly defining pass/fail criteria. This can lead to too many rejects and a higher cost per unit. Either that, or low-quality products that damage the brand reputation.

Digital technologies predicting and responding to supply chain disruptions  

When deployed intelligently, Industry 4.0 technologies can also provide unprecedented insight into the entire product lifecycle.  Digital technologies — including AI, analytics, blockchain, and IOT — can be used to design and operate the kind of revamped ‘Just in Time’ network we’ve described. Analytics, for example, can help members of the supply chain identify common parts across product lines and design optimal buffers. Digital twins — digital models of the supply chain — can alert downstream plants about any upstream disruptions faster so they can avail themselves of the buffers more quickly.

Investing in the right technologies and solutions can provide manufacturers with better insights for planning and data-driven action in both their production lines and supply chains. In fact, the factories of the future and the manufacturing sector as a whole have potential to utilise data architecture to connect every part of the product lifecycle — from planning to production to warehousing to delivery and aftermarket. 

This will empower those on the ground to make real-time decisions that help to absorb setbacks while identifying growth opportunities and ways to be more competitive.

Hiring, retention, and securing capacity in manufacturing

In the global search for talent, the manufacturing industry’s long-term success depends on its talent pool. 

This means ensuring that the industry continues to hire and retain purpose-driven innovators, problem-solvers, and makers who can help mould the next era of manufacturing. In day-to-day production, securing capacity must also be considered so that staff can increase to full production after a disruption. For example, in the face of component shortages, manufacturers sometimes make the mistake of reducing workforce because they currently have fewer or less optimised factory lines running.

Often, the smarter option is to retain workers until full production returns. People are important in the manufacturing process, especially today when many countries are faced with staffing challenges. Workers can be deployed to support different factory lines or support other areas of the production ecosystem temporarily when needed.

This allows manufacturers to be more agile while remaining in control when components are restocked or demand increases. Keeping workers employed even during downtime can work as a strategic resiliency play, one that considers the high cost and time commitment of rehiring and training new employees.

Resiliency looks different for everyone  

Ultimately, the building blocks of resiliency will look slightly different for every company. Nevertheless, the’s a common thread. Fudamentally, you need to understand the data and variables behind your own business operations while embracing innovation and change.

The first few weeks of 2025 have been so utterly chaotic, that the only safe bet when it comes to predictions for the rest of the year seems to be “more chaos”. Despite glimmers of hope for stability, geopolitical events continue to unfold around the world that promise continued disruption throughout the year.

According to a new report by interos.ai, there are 481 distinct companies in the S&P 500 that have direct suppliers located in “high-risk regions.” Organisations with ties to the agriculture, building and civil engineering, retail and computer manufacturing industries are particularly prone to disruption. The report argues that, even if only 10% of combined annual revenue is impacted from supply chain ripple effects in high-risk regions, the resulting impact could be more than $1 Trillion across the world’s largest companies. 

The result of such disruption could, according to the report, include “widespread disruptions to global technology production, surging prices in consumer electronics, commodity price increases in energy, raw material and agricultural markets and increased costs in global shipping, fostering for consumers worldwide.”  

The report’s analysis of high-risk zones focuses on three key regions: the Red Sea, Eastern Europe, and the South China Sea. 

A momentary reprieve for Gaza and the Red Sea hangs by a thread 

After 15 months of slaughter, ethnic cleansing, and bombardment with US and British-made weaponry, Israel’s assault on the Gaza Strip has reached a tentative pause with the announcement of a ceasefire. A conservative estimate puts the Palestinian dead in excess of 45,00 people, over half of whom were children. 

The deal, which hopes to see a pause to the fighting, the staggered release of Israeli hostages and Palestinian prisoners, and an influx of aid to Gaza, has already seen some positive effects. These include the easing of Houthi sanctions on shipping in the Red Sea and the release of the crew of the part-Israeli-owned passenger ship, the Galaxy Leader which they captured in 2023. Throughout the devastation in northern Gaza, Palestinian refugees are starting to return home. 

However, a series of settler raids in the West Bank — emboldened by the lifting of sanctions against illegal settlements by the incoming Trump administration — are already threatening to reignite the conflict. President Trump also echoed the sentiments of his son-in-law Jared Kushner, who is investing in stolen land in Gaza, calling the area a “phenomenal location” for real estate investment. That probably isn’t helping.  

Also, Israel’s seizure of land from neighbouring countries, including Yemen, and sustained airstrikes against its neighbours continues to stoke the conflict. The reignition of the genocide in Gaza, escalating violence in the West Bank, and worsening conflict on Israel’s borders could mean — in addition to more loss of life — further disruption to global trade routes. 

What’s next for the red sea? 

Over 10% of global trade passes through the Red Sea, including 30% of global container traffic, and over $1 trillion in annual merchandise. Interos.ai’s report notes that Houthi attacks on commercial ships in the Red Sea caused revenue in Egypt’s Suez Canal to drop by almost 50% ($428 million in Jan 2024 down from $804 million the year prior) — something US and British warships patrolling the waterways have done almost nothing to contain. 

To mitigate risk, shipping organisations have spent the past year re-routing vessels around the Cape of Good Hope in Africa. This demands “complex and time-consuming logistics coordination”, as well as increasing fuel costs by around $1 million per voyage, spiking CO2 emissions, and lengthening shipping time by 13-15 days. The return of more ships to the Red Sea could ease these pain points, but things could just as easily go back to how they were. 

Ukraine is still a conflict zone 

The war in Ukraine passed its 1,000th day recently and, despite assurances by President Trump that he will resolve the conflict in the near future, further disruption in the region seems likely for the foreseeable future. Trump has spoken out in the past few days to pressure Russian President Vladimir Putin with more sanctions if he does not end the war. 

President Putin has said that he is willing to end the decade-long conflict under terms that Ukraine accept Russian territorial gains, which currently represent around 20% of its land. He has also refused to entertain peace talks if Ukraine is allowed to join Nato following an end to hostilities. Ukraine has refused these terms, although more recently President Volodymyr Zelensky conceded that the country may have to cede some currently occupied land temporarily.

Interos.ai notes that US and European sanctions against Russia have “vastly reshaped global supply chains” since Russia’s invasion of Ukraine. The conflict has radically altered the energy, agriculture, shipping, logistics and global payment sectors.

The looming threat over Taiwan

Last year, interos.ai notes in its report that there were more than 3,000 flyovers in Taiwanese airspace by the People’s Liberation Army. While considered less of an inevitability than before the pandemic, a Chinese invasion of Taiwan “would plunge technology supply chains into chaos and the world into war.” 

Taiwan is critically linked to global technology supply chains, producing over 90% of the world’s advanced semiconductors. Conflict in the country would derail the production of phones, laptops, medical devices and server networks that underpin global industries and vital digital infrastructure. 

More broadly, the report also notes that, with more than 20% of global trade (about $3.4 Trillion) passing through the South China Sea, ongoing geopolitical tensions between states like China and the Philippines could disrupt major shipping and trade routes in 2025. 

How can supply chains respond?

“Businesses must evolve from in-house techniques and reactive risk management to a proactive approach that prioritises resilience,” Ted Krantz, CEO of interos.ai, said in a press release. “Supply chains are the bedrock of the global economy. But can also bring the world to a screeching halt. Eliminating risk in supply chains should be one of the enterprise’s strategic board charters in 2025.” 

Whatever 2025 holds for the world and its supply chains, organisations need to be ready to face it, and one of the first steps is increasing supply chain knowledge and involvement at the board level. McKinsey’s Global Supply Chain Leader Survey from 2024 highlighted a board level strategic gap, where only 30% of members had a deep understanding of supply chain issues. The report accused companies of “taking their foot off the gas” when it came to resilience, with just 25% of boards having formal processes in place to discuss supply chain risks.

Unlike New Year’s resolutions, which are often based around the start of the year (just look at the queues at the gym!), malicious cyber actors don’t suddenly change their tactics, techniques, or procedures on January 1st. However, it is useful to understand the current direction of the threat landscape. Doing so can help anticipate how cyber threats may evolve over the coming year. 

AI to map out supply chain targets

It feels as though it has become somewhat cliché to discuss AI’s potential impact on cyber security. Nevertheless, it doesn’t make it any less true. AI has lowered the barrier to entry to cybercrime. New tools allow less skilled malicious actors to develop more convincing phishing, business email compromise (BEC), and other social engineering attacks.

Advanced malicious actors will likely explore additional ways to enhance their effectiveness using AI. It is likely that they will leverage AI’s ability to process and extract valuable information from large data sets. They will perform reconnaissance, map out and analyse supply chains, pinpoint weak links ripe for exploitation. Alternately, they could generate social engineering attacks tailored to specific vendor relationships. Using AI to identify particularly attractive targets within a supply chain may allow malicious actors to leverage the threat of a systemic disruption across a sector in their ransom demands. Or use the connectivity of a commonly shared supplier to gain a foothold into the networks of that supplier’s clients.

Increasing Regulatory Focus Down the Supply Chain

Regulations like NIS2 and DORA are expected to have a dramatic effect on the landscape this year. As they come into effect, regulators will increase scrutiny on compliance measures within the supply chain. 

Organisations will need to gain visibility into concentration risks. Crucially, these risks may exist beyond their direct third-party suppliers (including 4th, 5th, and nth parties). They must also have mechanisms in place to assess the security of their entire supply chain network. This will create a domino effect, improving the operational resilience of entire sectors deemed critical national infrastructure. 

In addition to strengthening operational resilience, organisations must be prepared to demonstrate their due diligence. Doing so is vital when understanding and mitigating these risks. This is especially important, given the financial, regulatory, and reputational risks that could arise from any degree of negligence.

Expect heightened pressure to demonstrate supply chain security maturity. This is not just for compliance purposes, however. Maturity will be increasingly crucial to win and retain business from clients who themselves need to assess the security of their suppliers and vendors. 

Additionally, investors are likely to scrutinise these factors to ensure that potential risks do not undermine the valuation of a potential acquisition or impact their exit strategy from an asset.

 Nation states will continue to leverage cyber operations

Governments are increasingly willing to disclose cyber activities linked to nation-state actors targeting critical national infrastructure. 

Recent announcements have revealed attacks on sectors such as telecommunications, finance, and both local and national governments. The overarching goal of these attacks is to disrupt critical systems in pursuit of broader strategic objectives. This is particularly true in today’s turbulent geopolitical climate. The public disclosures underscores the extent to which governments have been monitoring these threats. It signals that the situation has escalated to a critical point, necessitating such transparency.

Additionally, nation-states are investing in the development of zero-day exploits. While developing zero-days is resource-intensive, these exploits offer attackers highly effective tools for targeting and compromising victims. 

As previously discussed in the context of compliance, regulators will likely continue to expand the scope of sector-specific security requirements. 

This will include greater emphasis on securing supply chains to mitigate the risk of sector-wide impacts from nation-state actors leveraging pre-positioned vulnerabilities, whether for political retaliation or as part of a broader strategic campaign.

Ransomware continues to remain a major threat

Unfortunately, ransomware attacks continue to be a persistent threat. Over the years, organisations have adapted to better defend against and recover from these attacks. However, the sophistication and severity of extortion demands have escalated in kind. This evolving “cat-and-mouse” dynamic sees ransomware actors continuously adapting their tactics in response to improved security measures. 

What began with traditional extortion has now evolved into more complex iterations. These include double, triple, and even quadruple extortions where a victim’s clients are contacted to pressure the victim into payment. Alternately, additional threats to disrupt public-facing websites with Distributed Denial of Service attacks can add further pressure. 

Organisations must have a comprehensive understanding of their critical business functions, the external suppliers whose services enable those functions, and the potential impact on operations if a supplier within your supply chain falls victim to a multi-extortion ransomware attack. It’s essential to understand the potential impact that could arise if a supplier in your supply chain experiences service disruption due to a ransomware attack. 

Increased client/supplier collaboration, but more scrutiny

As organisations face mounting operational and regulatory pressure to demonstrate operational resilience, collaboration and engagement with suppliers have become critical. This cooperation extends beyond traditional supplier relationships, with a growing focus on assessing concentration risks at the 4th, 5th, and nth-party levels. Understanding these risks is key to identifying potential vulnerabilities in the extended supply chain, where the impact of a breach could ripple across multiple organisations, even entire sectors.

However, while collaboration is essential, it must be complemented by a strong security framework. Organisations are increasingly implementing a zero-trust approach where no user, device, or connection—regardless of its location—should be trusted by default. 

This approach is expected to extend not only within organisations’ internal networks but also in their interactions with external suppliers. This approach is vital to reducing the potential impact of any successful breach by limiting the “blast radius” and preventing lateral movement within the supply chain.

We’ve already seen information-sharing initiatives embraced by threat intelligence teams. The next step is for Third-Party Risk Management teams to collaborate more closely with threat intelligence groups. Together, they can work to adopt best practices related to supply chain security. A collective defense approach—where information, insights, and mitigation strategies are shared—will be essential to staying ahead of the rapidly evolving threat landscape.

Organisations must now prioritise supply chain security as a central focus, not only to comply with regulatory requirements but to safeguard the operational resilience of their entire ecosystem. By strengthening both collaboration and security, businesses can better mitigate the risks posed by today’s increasingly interconnected and complex supply chains.

Quantum computing

While we are still some time away from quantum computing becoming widely available and operational, it nonetheless poses a significant potential risk to the supply chain. Organisations will need to thoroughly assess to what extent their own – or a vendor’s – encryption methods protecting communication and sensitive data could be vulnerable to future quantum attacks. This is the “harvest now, decrypt later” approach. Essentially, hackers steal data now under the assumption that they will be able to decrypt it in the future using a quantum computer. 

This should be integrated into client and supplier assurance processes. Doing so will ensure organisations begin considering the risks posed by quantum computing and developing plans to mitigate those risks.

Regulators are likely to update their frameworks in the near future. These changes will likely result in requirements for organisations to secure systems against quantum threats. Doing so will help ensure businesses are prepared for a quantum-resilient future.

In the safety-conscious world we live in today, it can be hard to remember a time when the security and well-being of employees wasn’t a priority. Lest we take it for granted, it’s good to remind ourselves from time to time that health and safety as a workplace concept is relatively new. The laws and guidance we have now sit at the heart of all workplaces and, as a result, in many areas of the world, health and safety continues to improve year on year, with injury and fatality numbers gradually decreasing.

But, with so much at stake, organisations can still do more to ensure even better outcomes. This doesn just mean decreasing accidents. When we proactively create a better safety culture, we feel the ripples in all aspects of the business. The end resuls are real and lasting value.

But how do we achieve this? Obviously, doing so is a multi-layered process and there are no magic bullets. However, in most cases, where there is a healthy safety culture within an organisation you will find this one ingredient – a truly engaged and empowered workforce on the shopfloor.

Why does this matter?

Workplaces that involve employees in making decisions about health and safety are, more often than not, safer and healthier. This makes perfect sense when you consider that employees on the shopfloor are the best people to understand the risks in their own workplace and are also hugely influential when it comes to health and safety.

According to the Health and Safety Executive (HSE) in the UK, accident rates are lower where employees genuinely feel they have a say in health and safety matters (14%). This is significantly lower than workplaces that don’t involve employees in health and safety (26%). The HSE also notes that stronger employee involvement means better control of common workplace risks such as slips and trips. It’s very effective in 76% of cases where employees felt the business always consulted them, but only very effective in 40% of cases if they thought they were rarely, or never consulted.

By fostering a spirit of cooperation, an organisation can develop a positive health and safety culture. By doing so, the organisation can ensure they are managing risks sensibly and bringing about improvements in overall quality, efficiency and productivity.

Ensuring health and safety does not operate in a vacuum

It is so important that Health and Safety does not operate in a vacuum – if ever a workplace function needed to step outside a silo, this is it! The role of Health and Safety is, quite sensibly, to conduct risk assessment, recommend mitigations for potential hazards and carry out necessary investigations. But they don’t work in the roles that actually undertake potentially hazardous activities and, crucially, with so many operations in the logistics space happening around the clock, they cannot be with the team all the time.

Health and Safety therefore often relies on the manual reporting of near misses from operations to identify potential hazards. This has inherent challenges. The only way to really ensure employees adhere to all risk management procedures in a timely way, is for Health and Safety culture to be a seamless part of the work taking place on the shopfloor. 

It is not a nice-to-have – it is critical.

The shopfloor team knows what their job requires. They know their colleagues and the physical space in which they work. They bring a practical perspective and their primary goal is to meet their objectives as efficiently as possible while keeping themselves and their colleagues safe.

With the pressures associated with meeting KPIs, it can be tempting to seek out shortcuts in procedures which can increase levels of risk. Therefore, empowering people on the ground to feel comfortable about voicing any concerns they may have, or make practical suggestions around how best to safely get the job done is key.

How do we make this happen?

The organisation will need to make the team on the ground feel respected and listened to. In my experience, you can best achieve this by getting out of a warm office and into the heart of the business. It’s essential that all team members feel confident that talking about wrongdoings won’t result in repercussions or them being seen as difficult.

The team on the shopfloor needs to have the right technology tools to enable them to report issues and suggest improvements. They also need to be motivated by feeling that their efforts have led to positive changes and are appreciated by the organisation. Communication is essential here – without effective communication, all efforts can fail.

People who feel valued and involved in decision-making are an essential ingredient in a high-performing workplace. Empowering your workforce, getting them involved in making decisions and ensuring they have the right skills to do so, demonstrates that the Health and Safety function is doing more than ticking boxes – that they take the health, safety and well-being of all team members seriously.

Procurement leaders are navigating an increasingly volatile world where supply chain disruptions have become a constant threat. From geopolitical conflicts like the war in Ukraine and labour strikes on the US East Coast to extreme weather events driven by climate change, global trade is under immense pressure. These challenges cause delays, increased transportation costs, and inflationary impacts that threaten organisational performance. Consequently, the key question is no longer whether disruptions will happen, but how prepared procurement professionals are to handle them. At the heart of these challenges are contracts. Once static documents, contracts have now become critical tools for mitigating risk and ensuring supply chain resilience. They are one of the most powerful resources at the procurement team’s fingertips.

Yet, antiquated practices in contract management often undermine this potential, exposing businesses to unnecessary vulnerabilities. To remain competitive, procurement leaders must adopt a modernised, technology-driven approach to contracting. This approach must align commercial agreements with the complexities of today’s supply chains.

The Cost of Disruption

Supply chain disruptions impact industries differently, but their financial toll is widespread. For instance, UK exporters face slower, more expensive transportation, while US businesses grapple with material shortages and rising costs. According to World Commerce & Contracting, such inefficiencies lead to an average 9% revenue loss in every contract. This is a substantial financial impact for enterprises with thousands of agreements.

Contracts serve as the foundation of commerce, governing every transaction and acting as the single source of truth for business relationships with customers and suppliers. Sellers need clarity on their rights, and buyers need certainty about deliverables. Therefore, ensuring contract language addresses potential supply chain disruptions is critical to help enterprises navigate today’s complexities with greater agility.

Traditional approaches to managing contracts fail to account for the unpredictability of modern supply chains. Procurement teams must develop contracts that anticipate and respond to disruptions. Mechanisms like inflation-adjusted pricing, force majeure clauses, and renegotiation terms to maintain flexibility are all critical in this endeavour. Additionally, teams must automate the monitoring of such clauses to ensure they are properly enforced during turbulent times.

Leveraging AI for Smarter Contracting

Many organisations fail to fully leverage the true potential of contracts. Now, however, artificial intelligence (AI) is revolutionising contracting to help enterprises control costs, recapture revenue, and reinforce compliance across their organisations. Research from Icertis reveals that 90% of CEOs and 80% of CFOs struggle with effective contract negotiations, leading to significant revenue leakage. 

AI transforms contracts into data-rich resources, delivering real-time insights into bottom-line risks like cost escalations and upcoming renewal deadlines. These insights empower procurement leaders to make proactive decisions, such as renegotiating unfavourable terms or identifying alternative vendors if there are gaps in supply chains.

By digitising contracts and applying AI, organisations can enhance visibility, streamline processes, and position their procurement teams to make a notable impact on business outcomes. For example, AI can detect risks in supply chain routes and recommend backup suppliers to prevent delays from escalating into costly disruptions. When contract data is integrated with core procurement systems like SAP Ariba, AI can also flag unpaid supplier invoices or discount opportunities that enable enterprises to recapture lost revenue. 

Nearly half of Chief Procurement Officers have led AI adoption initiatives. However, AI’s full potential in contracting – also known as contract intelligence – still has substantial room for growth. AI has the power to free procurement teams from routine tasks, enabling them to focus on strategic initiatives and become effective change makers within their organisations. 

Negotiating for Resilience

To succeed, procurement leaders must take a proactive, technology-first approach to contract management. 

This requires treating contracts as living resources that address supply chain vulnerabilities and advance commercial goals. By centralising and analysing contract data through AI-driven platforms, companies can diversify their supplier base. Doing so reduces reliance on single sources, allowing them to better manage costs, and negotiate more favourable outcomes.

In today’s geopolitical environment, AI in contracting also supports compliance by helping to align agreements with changing regulations, reducing the risk of legal and financial penalties. With the right elements built into every contract, procurement teams can better anticipate risks and enhance their organisations’ longevity.

Contracts as Catalysts for Value

At its pinnacle, effective contract management drives value creation. Well-structured contracts improve supplier relationships by promoting transparency and trust. Procurement professionals can use AI-driven insights to make smarter decisions, secure better terms, and improve profit margins in every department of the business.

By treating contracts as powerful partners, procurement leaders can recover lost revenue, optimise supply chain performance, and capitalise on growth opportunities. This shift is essential for navigating the complexities of modern commerce and solidifying procurement’s central role in organisational success.

The Future of Procurement 

Procurement challenges demand a fundamental shift in how businesses view and manage contracts. In an era of uncertainty, relying on traditional, outdated methods – like saving signed PDFs in a forgotten shared folder – is no longer sufficient. 

Procurement leaders must embrace AI-powered contract intelligence to build resilience, control costs, and turn contracts into tools for transformation. In today’s financial climate, where every pound matters, the time to invest in AI is now.

The festive season, while joyous, presents a whirlwind of challenges for businesses managing deliveries. As the holiday spirit ignites a shopping spree, customers expect their gifts to arrive on time, adding pressure to supply chains and couriers. Meeting these heightened demands requires strategic planning, technological adoption, and a customer-first approach.

Keeping Up with Consumer Trends and Expectations

Today’s consumers have higher expectations than ever, especially during the Christmas season. Retailers must align their operations with modern consumer trends, which increasingly prioritise speed and convenience. Offering same-day or next-day delivery services is no longer a luxury but a necessity to remain competitive.

Additionally, reliable tracking systems play a crucial role in managing expectations. Customers want real-time updates on their packages, from warehouse dispatch to doorstep delivery. Providing this transparency ensures that customers remain confident in the retailer’s ability to meet their needs. It’s not just about delivering a product; it’s about delivering peace of mind.

Responsive Customer Support: The Holiday Lifeline

The surge in orders during Christmas amplifies the importance of responsive customer support infrastructure. With delayed or lost packages being inevitable in high-pressure periods, businesses need to establish fast and effective communication channels to resolve issues promptly.

Live chat, dedicated support hotlines, and social media responsiveness become critical tools. These platforms allow customers to voice concerns and receive timely assistance. A well-prepared customer support team can turn a potential complaint into an opportunity to strengthen customer loyalty. Furthermore, proactive communication from customer support teams, such as updates on delays, can prevent misunderstandings and build trust.

Automation and Real-Time Updates: Keeping Customers Informed

In the digital age, automated notifications and real-time updates on order status are indispensable. These features help businesses manage the customer’s anxiety surrounding their Christmas purchases. By integrating automation into the delivery process, retailers can send instant order confirmations, provide real-time updates on shipping progress, and notify customers of any changes or delays in their delivery timeline.

Such transparency not only enhances the customer experience but also reduces the volume of inquiries to customer support teams, allowing them to focus on resolving complex issues.

The bottom line

The Christmas delivery frenzy may be daunting, but it is also an opportunity for businesses to showcase their reliability and commitment to customer satisfaction. By aligning with consumer expectations for speedy and transparent deliveries, bolstering customer support infrastructure, and leveraging automation for real-time updates, businesses can navigate the festive rush successfully. 

These strategies ensure not only a smoother holiday season but also a stronger foundation for year-round customer loyalty. This Christmas, businesses who thrive will be those who prioritise precision, responsiveness, and innovation.

Supply chain organisations and procurement leaders are bracing for a major crisis, as the incoming Trump administration promises sweeping tariffs in Q1 of 2025. A new report by spend management solutions firm Ivalua has revealed that half of organisations in the US and UK are preparing for changes in US trade policy, including rising tariffs. 

These changes, they believe, will create sweeping supply chain disruptions, resulting in higher costs for customers. Multiple organisations also warned that sweeping trade regulation changes could put them “at risk of collapse.”

Free trade agreements under threat 

Ivalua’s study of 200 US and UK supply chain and procurement decision-makers identified restrictions on exports of certain products and materials as their top concern (89%). The majority (84%) pressed worry about the overhaul or elimination of existing free trade agreements. A similarly overwhelming number (89%) also expressed concerns over broad tariffs on imports, while 84% fear high tariffs on goods imported from China. 

Sparked by President-elect Trump’s recent threats to hike tariffs on goods imported to the US from China, Canada and Mexico upon taking office, organisations’ fears could be realised as early as January when the new administration comes into power. 

“President Trump has been forthright in his position on tariffs, but the final details may vary based on negotiations with  certain countries and some categories of imports,” commented Alex Saric, a procurement expert at Ivalua. Uncertainty around how trade policies and tariffs will be implemented means companies won’t know how best to optimise supply chains to mitigate the impact until the last minute. At a minimum, organisations should start working with suppliers now to reconsider supply chain operations and identify ways to mitigate the impact of likely trade policy changes in the new year.”

The impact 

The impact, according to Ivalua, could be significant for US and UK businesses. Of the firms who anticipate more disruption from January:

• 52% say they will need to completely reevaluate which suppliers they work with.
• 51% say they will pass the cost onto customers – US organisations (65%) are more likely to do so than those in the UK (36%).
• Almost half (48%) foresee rising supply chain costs that reduce profitability.
• 45% warn rising supply chain costs will put their business at risk of collapse – with US organisations (52%) having a greater fear of collapse than those in the UK (36%).

“Organisations should prepare for the possibility of nearshoring or onshoring operations, factoring in evolving ‘made in USA’ thresholds and the impact increased tariffs will have on suppliers in China, Mexico, and Canada,” Saric added. “But the reality is that certain industries, especially those dependent on rare earth minerals or established manufacturing clusters, can’t easily shift away from China.”su

What kind of potential do wargames have to help organisations prepare for not just the worst, but also the day-to-day struggles of the modern supply chain landscape? 

Tearing up the rulebook — a new age of supply chain disruption 

The last five years have — I don’t think it’s controversial to say — been a wild ride for global supply chains. 

From trade wars between the US and China to an actual war in Ukraine; from an ongoing genocide in Gaza to the seizure of shipping in the Red Sea; from climate crisis-related crop failures and extreme weather events to the rise of generative AI and the ascendency of a US president who is still a vocal climate skeptic; the needle measuring the number, frequency, and scale of disruptions to global supply chains feels like it buried itself in the red circa 2020 and has barely dipped below that line since. 

Not only is it a fact that our current state of heightened disruption has made it more important than ever that supply chain managers plan and prepare for the unexpected, but shifting trends in supply chain organisation brought on by this new climate of disruption are making it uniquely difficult to draw on past experiences in order to predict the future. After all, much about the neoliberal philosophies of globalisation and free market economics that defined trade from the 1980s through to the spread of COVID-19 has been shown to be ineffective.

As the Harvard Business Review noted back in September of 2020, the “economic turmoil caused by the pandemic has exposed many vulnerabilities in supply chains and raised doubts about globalisation.”

Out of the frying pan

In response, many organisations are looking to restructure their value chains, moving manufacturing and assembly closer to home with the hope of reaping the triple benefit of increased resilience, cut carbon, and lower costs. But successfully nearshoring your business is complicated, and success isn’t guaranteed. Organisations looking to move their operations away from China, for example, often find themselves jumping out of one geopolitical frying pan and into the fire as they explore Eastern Europe, Africa, and South America as alternative sources of cheap labour and materials. 

“We’re in a new era. I don’t think that there is a normalisation anymore. I think that what companies are now facing is that supply chain disruption is the new norm” – Marissa Adams, head of global trade solutions at HSBC Americas  

This trend isn’t going anywhere, either. As the world ramps up for an AI revolution and a green transition, competition over critical resources like lithium and other minerals, as well as scarcer water, food, and land will only intensify as the century continues. If things move even half as fast as we expect, the supply chains that wealthy nations consider critical are about to change radically in the next few decades—crude oil giving way to lithium and cobalt to some degree, for example. Even in wealthy, relatively stable nations like the UK, experts have warned that food shortages due to extreme weather could trigger civil unrest within the next decade. Over the next 50 years, nearly 80% of experts believed civil unrest was either possible (45%), more likely than not (24%), or very likely (10%) in the UK, as the climate crisis puts pressure on global supply chains. 

Supply chain managers in the public and private sectors are going to be critical over the coming decades (even more so than they are now) as the world figures out how to maintain the flow of goods and materials in the face of ever more common disruptions. 

Gaming out the unknown

The problem with something new, of course, is that it’s hard to predict exactly how to respond to it. Taking the past ten years worth of data and finding the averages only really works if the fundamental shape of the system remains the same. Given the amount of change we’ve seen in just a few years, who knows what 2030 will look like, let alone 2050. Who could predict what shape the next global disruption will take? Will it be war? Another pandemic? Extreme weather? Civil unrest? Crop failure? In all likelihood, it will be some new combination of the above that our global supply chains have never faced before. 

How do you prepare for something you’ve never faced? Simple. You wargame it.

Taiwan has fallen 

Back in 2023, UK telecom company BT got together to run a series of “nightmare scenarios”, testing how their operations would respond should the unthinkable happen and a major geopolitical flashpoint ignite into conflict. 

BT carried out tests on its supply chain to better understand and prepare for any fallout amid escalating conflict between China and Taiwan, which was at a high point in April of that year following Speaker Nancy Pelosi’s visit to Taipei. 

In a “war game” that lasted two days, BT’s supply chain and procurement teams tested how they would respond in the event of a conflict in the region escalating further — an event that could overnight halt over 60% of the world’s semiconductor production. According to political-economic think tank Rhodium Group, if China and Taiwan enter into open conflict, it could “put well over $2 trillion in economic activity at risk, even before factoring in the impact from international sanctions or a military response”.

But what does a supply chain war game look like? According to Johan Gott, co-founder of US political risk consultancy Prism in an interview with the Financial Times, participants receive a series of “news flash” events which the participants have to respond to — the success or failure of their efforts determined by a combination of digital tools and human adjudicators. 

A BT spokesperson said that “like many businesses, we regularly run simulations to stress test our business on a range of scenarios as part of our risk management and planning”.

Game on — What to expect when wargaming #

With origins dating all the way back to Prussian military commanders during the early 1800s, wargaming has a long history tangled up with, among other things, the author H.G. Wells, Dungeons & Dragons, and the modern military industrial complex. The practice is actually having a moment right now as global uncertainties increase, and everyone from militaries to humanitarian aid groups seek to make their responses to each new crisis more likely to be effective. 

Wargaming a supply chain has a few key steps.

1. Identify

Identifying the Black Swan Events that are most likely to cause serious damage to your supply chains. Consider the current events, trends, and interlocking relationships (both economic and political) in your region.  Try to find commonalities between the ways in which different events could impact your supply chain. Consider everything from natural disasters and political instability to cyberattacks and pandemics.

2. Tool up 

Build your testing tools. Most organisations start by creating a digital replica of their entire supply chain using simulation tools. This digital twin should represent all critical elements of your network, including suppliers, manufacturing sites, transportation routes, and customer locations. However, the intricate interactions between multiple actors in complex systems are difficult to map with digital tools alone. Often — just as in 1800s Prussian wargames — an experienced “referee”, a human who can add their own opinion and intuition to interpret the results can be helpful. It’s actually somewhat similar to the reason why Dungeons & Dragons needs a human dungeon master; there are simply too many different outcomes to consider. 

3. Play

Whatever blend of digital, data-based, and human tools you choose to use, the next step is actually running a wargame. Use your tools to simulate various disruption scenarios, focusing on the potential impact of “black swan” events. Evaluate how these disruptions influence production, inventory, and delivery timelines to gain insights into your network’s vulnerabilities.  

4. Implement

From there, use the simulation results to evaluate the effectiveness of your current contingency plans and identify areas needing improvement. Address gaps by developing and testing new strategies, such as diversifying suppliers, establishing alternative transportation options, or increasing safety stock levels.

Should you be wargaming? 

Well, it depends. As games journalist Quintin Smith notes at the end of his excellent documentary on wargaming, wargames… don’t actually always work. It’s one of the reasons why predictions at the outset of the war in Ukraine were so wildly off the mark. The data being used to wargame scenarios pointed one way, but because they didn’t account for things like the role of UAVs or overestimations of the Russian army’s readiness, their predictions were wrong. Dead wrong. 

Nevertheless, wargames could still very much have a role in helping organisations game out the next big disruption, especially as we now have more recent major events to draw data from, and our digital tools are getting better all the time. In October of 2024, a wargame conducted by the CNA exploring the military clothing supply chain revealed bottlenecks that “in a major war scenario would have left military personnel short of uniforms.” 

“The implications of these findings could extend well beyond uniforms,” said Gordon Jaquith, executive director of CNA’s Department of Navy Relations. “It’s a wake-up call to prepare for wartime demands on the US industrial base as a whole.”

With the potential to expose glaring weaknesses in critical logistics and supply chain systems, wargames could be an important weapon in the hands of supply chain leaders. 

This article appeared in Issue 6 of the SupplyChain Strategy magazine. Click to read the whole magazine for in-depth interviews, analysis, and coverage of the biggest trends shaping the supply chain sector.

The past few years have thrown the fragility of global supply chains into sharp relief. Disruptions have had profound impacts on industries worldwide. While supply chains are continually changing in response to the shifting commercial landscape, rapid inflation, geopolitical uncertainty, extreme weather, and COVID-19 have all brought about an unprecedented period of volatility, with a wide array of challenges for businesses and operators. In such a risk prone world, the need for supply chain resilience and efficiency is greater than ever.  

Mitigating risk and reducing disruption requires a multifaceted approach. Diversification of suppliers is essential; relying heavily on a single supplier or a limited geographical area increases vulnerability. By diversifying their supplier base, companies can reduce dependency on any one source and be better prepared to tackle location-specific disruptions.

Localised manufacturing is another key consideration. Manufacturing closer to end markets can reduce dependency on global supply chains and transportation routes, allowing smaller, more flexible production facilities to adapt quickly to local demand.

The integration of advanced technologies is also key. The ability to accurately track goods in transit is vital – particularly when delays or shortages occur. Determining exactly where disruption has taken place can help avoid delays that cascade through the system. 

Intelligent solutions to the supply chain’s biggest problems

Embedding intelligence into products allows real-time tracking and management of goods, helping to predict disruptions, monitor goods, and optimise logistics. But there are several hurdles to overcome to achieve ubiquitous connectivity. 

Cost is the first problem. Smarter supply chains typically rely on silicon semiconductors, but it’s expensive to add a silicon chip to each and every item in the supply chain. The long lead times and high costs associated with standard chip design mean that it’s best used to create complex, hi-spec chips in applications that demand high performance. However, this means that production is rarely agile, and rapid customisation is not an option. The value of the intelligence must outweigh the cost of implementation – and it must be quick and easy to deploy.

Environmental impact is also a consideration: currently, producing silicon semiconductors uses up vast amounts of water and energy, and up to 30 different process gases, many with much higher global warming potential than CO₂. Their production also involves moving the various components around the globe to areas of expertise, which slows production and increases carbon emissions.

New chips, new supply chain transformation possibilities

Non-silicon semiconductors – chips that use new, advanced materials – have the potential to change the narrative around item-level intelligence, unlocking the potential for implementation at scale.

These new materials allow for simplified production processes at much lower temperatures than silicon, consuming significantly less energy and water, and fewer harmful chemicals. This both drives down cost and reduces carbon impact, making low-cost, sustainable, item-level intelligence a reality. It also allows end-to-end production at a single site. As a result, production is significantly faster – typically just a few weeks, compared to the months of standard chip production – making customisation rapid and agile.

These advanced chips are ultra-thin and also physically flexible, making it possible to deploy them almost anywhere – from clothing and textiles to bottles or coffee cups – with few constraints on form-factor.

Embedded directly into packaging, they’re not obvious to the touch. They don’t get in the way of product branding, can’t be covered or replaced – and are robust enough to avoid being damaged during the rigours of transportation.

This low-cost technology makes it viable to add intelligence to high volume products, making insights available to retailers and increasing widespread adoption.

Item-level intelligence at scale

The benefits of putting item-level intelligence into in the supply chain are numerous and transformative, leading to increased efficiency, transparency, and adaptability. 

Advanced material microchips, in combination with sensors and RFID tags, allow end-to-end visibility of individual items as they pass through the supply chain, enabling monitoring of precise location, movement – and even condition – in real time. 

This level of transparency allows businesses to reduce the risk of loss or theft, identify bottlenecks, optimise inventory, and monitor transit conditions like temperature and humidity.

Monitoring individual items, rather than relying on aggregate stock data, reduces the likelihood of overstocking or stockouts, and allows just-in-time inventory systems to reduce carrying costs and increase cash flow. Rapid identification of delays – from production slowdowns to transportation issues or customs holdups – means that supply chain managers can quickly trace disruptions to their source, and take corrective action.

These advanced material chips can also support the transition to more circular supply chain models, where products and materials are reused, recycled, or remanufactured rather than being discarded after use. They also enable easier post-sale returns and product refurbishment, boost recovery of materials and improve recycling accuracy, allowing for more sustainable consumption.

Affordable, item-level intelligence also plays an important role in the consumer experience, verifying product authenticity and preventing counterfeiting – crucial in industries such as pharmaceuticals, luxury goods, and electronics, where fake products could pose significant risks. 

But supply chains can also use the technology to deliver a richer, personalised experience, from real-time visibility of order status, to custom content served up at the tap of a smartphone. As well as delighting consumers with an interactive experience tailored to factors such as their location, time of year or previous interactions, brands also obtain first party data to inform future content and campaigns, further driving consumer loyalty.

A low-cost, low-carbon approach

In short, advanced material chips have the potential to transform supply chain management through low-cost, low-carbon connectivity, creating unprecedented visibility, control, and adaptability. 

From enhancing inventory management to improving customer experience, the ability to track and monitor individual products throughout their lifecycle creates more efficient, responsive, and sustainable supply chains. As companies continue to face new, constantly changing challenges and market demands, the adoption of item-level intelligence will become an essential strategy for building more resilient, secure, and agile supply chain systems.

At this year’s LogiPharma 2024 event, we caught up with some of the pharmaceutical supply chain sector’s leading executives to learn more about them, their analysis of the trends shaping the industry, and how their organisations are responding to the challenges ahead. 

Here’s Kenneth Kallstrom, Vice President Global Healthcare Sales at DSV, with answers to some of the most pressing questions facing the global pharmaceutical supply chain. 

1. Would you be able to give me a brief introduction to your role and the company you work  for? 

At DSV Group, we are structured into three divisions – DSV Air & Sea, DSV Road and DSV Solutions. Having three divisions allows for greater specialisation, flexibility, and customer focus. In my role as VP Global accounts, my team manages our top pharma customers for all the DSV divisions. We act as single point of contact for our customers for all DSV divisions. DSV is a a one stop solution for all their logistics and supply chain needs.

We provide and manage supply chain solutions for thousands of companies every day – from the small family run business to the large global corporation. Our reach is global, yet our presence is local and close to our customers. We have 75,000 employees in more than 80 countries who work passionately to deliver great customer experiences and high-quality services. 

2. Given the global disruption faced over the past few years, what state is the pharmaceutical supply chain in today?  

The distribution of Covid vaccines taught us that nothing is impossible. As long as you have the right people and flexible infrastructure processes in place, of course. 

Now pharma companies design their supply chains with a focus on building more resilient, agile, and transparent systems. Companies are prioritising the diversification of suppliers and localised manufacturing to mitigate risks. 

3. What are the biggest lessons supply chains have learnt over the past few years?

 Just in time is possible only if you have agile, resilient supply chains as there is always some disruptions you never expect. Despite all risk mitigation there can always be disruption and one need to be prepared for the unexpected.

I see the industry is rapidly adopting digital tools like AI, blockchain, and IoT. These tools are providing better visibility, real-time monitoring, and predictive analytics. 

They are helping companies optimise inventory management, traceability, and compliance with regulations. As a result, they’re building more resilient supply chains with fewer disruptions. 

4. Amid government legislation and changing customer demands, is a sustainable supply chain a non-negotiable in today’s world? 

Yes, as there is also pressure from consumers and companies are under pressure to make the pharmaceutical supply chain more sustainable, and companies are exploring eco-friendly packaging, reducing waste, and lowering carbon emissions throughout supply chains. 

5. In what ways have you incorporated sustainability into operations? 

As one of the world’s largest transport and logistics providers, DSV has a strong focus on ensuring responsible and sustainable business practices everywhere we operate. We have procured Sustainable Aviation fuel, Electric vehicles for pick ups and final mile delivery. And, we are also investing in sustainable warehouses.

Recognizing our role in the industry, we are firmly committed to playing an important role in enabling the change that is necessary to reach net-zero emissions in our industry as well as in our business. To deliver on this responsibility, we have committed to reaching net-zero emissions across our operations by 2050. 

This year at ASCM CONNECT, we caught up with some of the supply chain sector’s leading executives to learn more about them, their analysis of the trends shaping the industry, and how their organisations are responding to the challenges ahead. 

Jason Tham is the co-founder and CEO of Nulogy. Nulogy focuses on using its purpose-built platform to power multi-enterprise collaboration networks that enable real-time data visibility and seamless communication for external supply chain partners, including FMCG brands and the contract packagers and manufacturers that support them.

We spoke to Jason about the need for supply chain resilience and the importance of creating visibility when managing modern supply chains.  

1. Given the backdrop of the global disruption over the past few years (COVID, war, inflation, etc.), how would you sum up where the supply chain space finds itself today? 

Supply chains have been stumbling over the last few years amid global disruptions like the pandemic, geopolitical conflicts, and rising inflation, because I think companies have gained enough footing to start thinking proactively instead of reactively. The real opportunity now lies in building operations that aren’t just resilient, but also agile enough to anticipate changes before they happen.

This proactive approach is essential if we’re to handle the uncertainties of the future. It’s not about waiting for the next disruption, but about creating supply chains that can adapt in real time and thrive amid challenges.

2. What do you feel are the biggest lessons supply chains have learned over the past few years and how well equipped is the modern day supply chain now to deal with ‘black swan’ events like the ones we’ve seen recently?

The past few years have shown that the strength of modern supply chains doesn’t lie in individual organisations but in the synchronisation of the entire network. One of the biggest lessons we’ve learned is the critical importance of visibility and real-time data sharing across supply chain partners. 

Without this, the risks of delays and miscommunication increase significantly, leading to cascading failures—the domino effect—and amplifying the bullwhip phenomenon, where small fluctuations in demand can create large disruptions across the supply chain.

Supply chains are now better equipped with technology that enables real-time visibility, predictive analytics, and collaborative platforms to tackle these issues more proactively. 

However, the key takeaway is that success depends on the ability for organisations to incorporate and leverage these multi-enterprise technologies to work better together. It’s no longer about one company or one part of the chain succeeding in isolation; resilience is achieved when the entire network is synchronised, agile, and able to respond collectively to disruptions.

3. Amid government legislation and changing customer demands, is a sustainable supply a non-negotiable in today’s world?

Sustainability is indeed becoming a non-negotiable for supply chains in today’s world, driven by both regulatory pressures and evolving customer expectations. Governments across the globe are enacting stricter environmental regulations, such as the EU’s Green Deal and various carbon reduction initiatives, while consumers are increasingly choosing brands that prioritise sustainability. 

This shift means that Chief Supply Chain Officers (CSCOs) must embed sustainability into every aspect of their operations, from sourcing to production and distribution.

Nulogy is well-positioned to support companies in achieving these sustainability goals. By offering real-time data visibility and collaboration tools, Nulogy helps businesses reduce operational waste, optimise resource use, and improve efficiency—key components of a more sustainable supply chain.

Additionally, Nulogy’s platform ensures that companies can comply with evolving environmental regulations by providing transparency across their extended supply chains. This not only helps reduce carbon footprints but also fosters more sustainable and ethical sourcing practices.

4. What are the biggest challenges or hesitations you’re seeing companies have around AI? What should organisations look for in technology to hedge against these concerns?

From a supply chain perspective, some of the biggest challenges companies face around AI often stem from managing complex supply chains involving multiple parties. 

Minimising waste is crucial to improving quality, reducing costs, and ensuring timely and complete fulfilment. However, achieving this requires seamless synchronisation and virtual vertical integration across manufacturing, warehousing, and other nodes in the supply chain.

Since supply chains typically consist of a network of specialised organisations whose inputs and outputs are interdependent, no single ERP system can manage them all, and a multi-enterprise solution becomes essential. Only multi-enterprise collaboration solutions allow for real-time collaboration, orchestration, and synchronisation across diverse entities, and brings together data, enabling all parties to work together in harmony.

5. People are a company’s greatest asset but can also be a hurdle to overcome when it comes to innovation. How do you get people on board with change?

Managing the “people challenge” in fast-paced and innovation-driven environments, especially within the world of supply chain, involves building a sense of mutuality and shared goals among all stakeholders. 

At Nulogy, we connect brands with their upstream suppliers to improve visibility and collaboration. The key is to align teams around shared goals, showing how change benefits everyone. Involving people early, addressing concerns, and providing training help build trust and engagement. When teams see how new technology enhances efficiency and performance for all, they’re more likely to embrace it.

6. What about the next generation of talent? What is the key to encouraging more people into a career within the supply chain?

Attracting the next generation of supply chain talent starts with fostering an inclusive environment where people feel their contributions matter. As the recipient of a 2024 ASCM Award of Excellence for Diversity, Equity, and Inclusion (DEI), I believe that diversity is key to driving innovation. 

At Nulogy, we’ve implemented equitable hiring practices and created programs like our apprenticeship for women and people of colour, which helps make the field more accessible and appealing to younger professionals. By doing this, we ensure the supply chain industry is seen as both essential and inclusive.

7. What’s the next step for the supply chain sector? What strategies can it implement to push the industry forward even further?

The supply chain industry can take the next step by adopting tools that capture real-time production data. Our solutions enable customers to track line capture data, including what’s being produced, when, and the bill of materials involved. We provide precise tracking throughout the production line, whether in machine processing or during kitting and co-packing.

Our shop floor solution is also designed for multi-enterprise collaboration, allowing seamless data sharing between upstream suppliers and downstream customers. This federated approach ensures all parties in the supply chain can access real-time data, improving visibility, collaboration, and efficiency across the network.

8. Are there any exciting projects that you’re currently working on or any past ones that you’re proud of that you’d like to highlight?

Yes! There are a lot of exciting things happening at Nulogy. A major milestone for Nulogy this year was our acquisition of Mingo Smart Factory, which allows us to bring additional innovation to our customer base and the broader market. 

Mingo will further enhance our ability to capture real-time data from the factory floor, such as machine performance and production throughput. These capabilities will enable our customers to make data-driven decisions even faster and take a proactive response to shifting market dynamics.

Change is an inevitable part of life. Whether moving house, getting married, or having a baby, major life transitions often create their fair share of stress. For organisations, change can be equally as daunting. A new CEO, an acquisition, or even being slapped with an unexpected regulatory fine can create periods of upheaval for firms. But, much like in our personal lives, these situational changes also present an opportunity for transformation and growth.

There has been a flurry of firms announcing new CEOs in recent months, from Burberry, Schroders, and Starbucks, hoping to bring these firms a ‘fresh start’. With the right approach, what many firms might see as a rocky patch can be a real chance to optimise operations, strengthen workplace culture, enable quicker decision-making and enhance supply chain management – setting them on a path for new beginnings. 

However, these major operational changes can also come with teething issues as firms look to find their feet. Navigating this transition period successfully starts with having a defined plan in place to avoid any turbulence.

Starting a new chapter

When faced with a period of transformation, the mantra “fail to prepare, prepare to fail” rings true for many firms. Undergoing major change, whether planned or unanticipated, can be disorienting, and for firms pushing ahead without a clear, strategic roadmap, even minor hiccups can snowball into larger issues.

For instance, British luxury brand Burberry has recently announced its new CEO in a surprise change for the company, aiming to steer the company in a new direction. 

Retailers have battled consistently tough market conditions in recent years, with many consumers reining in their spending, and high inflation impacting retailers’ revenues. However, a new CEO could signal a fresh start for Burberry, as it positions itself ready to embrace change and adapt quickly. 

For organisations in transitional periods, this opens up a chance to rethink and improve existing processes. Firms should adopt a new mindset to seize this transition as an opportunity to establish a strong, independent corporate identity, liberated from its previous self. 

Effective leadership and a strong change management approach play pivotal roles during the transition phase, helping to motivate employees and build a distinct corporate culture. Focusing on transparent communication and prioritising people and culture ensures its employees feel valued, engaged, and committed to the success of the firm. 

Smoothing supply challenges

These periods of change can also be golden opportunities to reevaluate and potentially reshape the supply chain to be leaner, more sustainable, and better aligned with the organisation’s goals. 

Companies can invest in technology for improved demand forecasting, optimise distribution routes, form new partnerships, or strengthen relationships with existing core suppliers to drive lasting, positive changes. 

To make this teething period smoother, conducting a thorough data audit is crucial. This allows firms to identify essential operational information, providing clear insights into the key data needed for traceability and visibility across the entire value chain. 

By leveraging this data, businesses can create more agile and resilient supply chains. These more agile structures can help businesses both meet current demands and prepare them to tackle future challenges. Prioritising data integrity and accessibility from the outset sets firms in pole position to uphold the highest degree of transparency across their supply chains.

Transparency is also essential for embedding sustainability into the daily operations of organisations undergoing transformation. 

New leadership, divestment, acquisition, and other major business changes offer a valuable chance to reassess supply chains and redesign processes to align with sustainable practices and regulatory requirements. Stamping out unethical labour practices or environmental-related risks can be driven by improving traceability and visibility into both tier-one and sub-tier suppliers. This has benefits which extend beyond the organisation’s four walls alone; it can drive meaningful change to benefit society at large. 

Making the most from change

It’s no surprise that firms are operating in a turbulent business environment – and we’ll likely see a sustained spike in M&A and even divestment activity, switches in leadership, and regulatory changes over the coming months. 

While firms might want to bury their heads in the sand over these changes, and just focus on keeping afloat during business transformation, these transitional periods offer a chance for a clean slate. Setting a defined plan can help firms optimise supply chains, minimise costs, and build a deeper workplace culture – not only surviving these periods of change, but creating lasting benefits. 

Supply chains are an integral part of a business and can significantly impact performance if not regularly monitored and assessed closely. Should problems with a supply chain arise, this can have a negative knock-on effect on all other aspects of the business. 

What are the most common pitfalls in supply chain management?

With the increasing challenges facing supply chains, especially in the aftermath of the pandemic, businesses need to be able to adapt quickly to market changes to reduce the risk of encountering problems, which could have a significant impact on their wider business and, more worryingly, their customers.

There are a number of pitfalls which businesses can encounter when it comes to supply chain management, the most common of which include; 

Lack of visibility 

In the current economic climate, it’s crucial for businesses to have a deep understanding of their supply chain. This knowledge enables them to conduct thorough risk assessments and be prepared with strategies to mitigate the most probable scenarios before they become major problems.

Demand forecasting 

Demand forecasting involves analysing historical data, market trends, and other relevant factors to anticipate customer demand for a product or service. Aligning supply with demand is key for an organisation’s supply chain management to reduce costs and optimise inventory. 

Structural flexibility 

This is vital across supply chains for businesses as it allows organisations to naturally respond to changes within the supply chain rather than wasting resources to respond to shifting dynamics.  

Other challenges that can arise within supply chains include product life and end of life management, water usage and pollution, economic pressures and consumer awareness. 

How can businesses prevent these pitfalls?

To avoid lack of visibility in a supply chain, organisations need to ensure that they are mapping their supply chain network and consistently providing updates and communicating with suppliers to avoid any disruptions. Having this oversight of your supply chain will allow for more in depth risk assessment and reduce disruptions, allowing businesses to prepare to mitigate potential issues.

Adapting a supply chain to match shifting demand enables businesses to set prices at a more competitive level and manage costs effectively.  By understanding supply and demand, companies can accurately adjust prices to reflect market conditions, which in turn can attract more customers and increase sales. This strategy plays a pivotal role in maintaining cost controls and service delivery performance, as well as optimising inventory volume, which ultimately leads to better financial management and improved customer satisfaction.

Structural flexibility refers to the ability to fundamentally adapt or change the supply chain design in response to changes in global demand or supply. Structural flexibility helps prevent supply chain pitfalls by allowing for quick adjustments in production, distribution, and inventory levels in response to changes in demand or supply. This flexibility gives businesses a competitive advantage and enables the supply chain to adapt to unforeseen events, such as disruptions in production, changes in consumer preferences, or fluctuations in raw material availability. 

The future of supply chain management

Businesses across multiple sectors are experiencing a range of challenges in relation to their supply chains and how they function. 

One of the most prevalent problems organisations are experiencing is the increased pressure to improve their sustainability and carbon footprint, particularly with the UK’s wider efforts to achieve Net Zero successfully by 2050. 

There are various strategies that can be implemented to mitigate such challenges, for example, creating a circular economy by improving lifecycle management to reduce pollution, waste and improve product life and end of life management. 

AI and technologies such as digital twins offer vast solutions to streamline and improve the efficiency of supply chains, which can in turn improve sustainability.  We can expect to see this become an instrumental part of supply chains, with AI and other digital technologies alleviating human error and connecting decision making. 

With supply chain challenges being ever present and ever changing, it’s imperative for businesses to maintain a holistic overview of their supply chain and be positioned to pivot and adapt according to market conditions and customer demand. 

By seeking support and expert guidance on supply chain management and strategy, organisations can ensure that they are able to effectively navigate the numerous potential challenges supply chains face, while maintaining minimum disruption for customers and the wider business.

Returns fraud is an escalating challenge in the retail industry. Research from ReBound found that nearly half (48%) of British consumers admitted to having bought, used and then returned an item. This is causing significant financial and operational burdens for retailers – costing the UK retail sector £11.3 billion in 2023. It’s also causing a ripple effect that extends across the entire supply chain. 

As the number of online sales increases and we head into peak trading season, the returns tsunami is only going to get worse. With this in mind, here’s five ways retailers can reduce returns fraud:

1. Invest in real-time inventory

Fraudulent returns can compromise the accuracy of inventory data. Items are often returned in unsellable condition or not returned at all. This lack of accuracy can disrupt the supply chain and hinder retailers’ ability to fulfil customer commitments. Discrepancies in stock levels result in stockouts or excessive inventory. Both incur significant costs for retailers.

Real-time inventory management must incorporate up-to-date data on returns. Monitoring returned products at every stage of the reverse logistics process means retailers can ensure that only sellable items are restocked. Effective inventory management can minimise the financial repercussions of fraudulent returns.

2. Introduce return fees

In the last few weeks, ASOS has become the latest online fashion retailer to start charging for returns. And new data from Shippit and Fluent Commerce shows the brand is not alone. While nearly half of all retailers offered free returns six years ago, less than 20 per cent do so now. And, this number is expected to continue to drop steeply.

Retailers can discourage casual or fraudulent returns by implementing return fees. However, they need to manage this strategy carefully to prevent alienating high value customers. But it can substantially decrease the number of returns, alleviating the strain on reverse logistics and the supply chain.

Another option is to introduce two categories of customers: ‘Verified’ ones with a low returns rate who can still access free returns. And a second group for new customers or customers who have a higher returns rate. They will then only be given the option to return at a fee. That way you don’t alienate your best customers but discourage the repeat offenders. 

3. Ramp up the reverse logistics

By making it easier to return items, retailers can help  overcome the disappointment customers may feel for paying for returns. When allowing people to return in store, staff onsite can quality check and then put the items back into sellable inventory right away (rather than heading back to the warehouse). etailers will then be able to sell those items again quickly. Indeed, many customers who return in-store end up exchanging rather than returning, finding something else to buy. It’s also much harder to return a ‘fraudulent’ item in store than via mail.

4. Introduce stricter verification processes

Introducing stricter verification procedures at the point of return can also help. Retailers can track a product’s lifecycle using technologies like AI-driven analytics and blockchain, to ensure that returned items correspond with the original purchase. By identifying irregularities in return patterns, these tools can help flag potential fraudsters. This helps decrease the number of fraudulent returns entering the reverse logistics process.

5. Partner wisely

To mitigate returns fraud, retailers can collaborate with third-party logistics providers. Providers specialising in reverse logistics should have the infrastructure to efficiently manage returns and reduce the operational disruptions associated with fraud. These providers can also offer valuable insight into return trends. Armed with their strategic counsel, retailers can fine-tune their approach to reduce the impact on the supply chain.

There is no silver bullet to reducing returns fraud. But if retailers use a mix of the above and explain their return policies (and costs) clearly with customers, then they can significantly reduce the likelihood of abuse.

In today’s digital landscape, businesses heavily rely on third-party software for their daily operations. This reliance has led to a surge in sophisticated software supply chain cyber attacks. These attacks exploit vulnerabilities in external tools or services to gain unauthorised access and compromise systems. The growing dependence on external software solutions amplifies the risk for organisations. Therefore, it’s essential that they take steps to bolster their security across the entire supply chain. 

According to Verizon’s latest Data Breach Investigations Report (DBIR), cyber attacks in the supply chain have shot up by 68%. In addition, around 15% of all breaches reported in 2023 affected third parties. This represents a significant increase compared to the 9% reported in 2022. 

The escalating risks within the supply chain present an ever-growing and alarming threat. The rising danger poses a concerning challenge to businesses of all sizes. Protecting customers’ and partners’ sensitive information from potential cyber attacks needs to be a priority, especially to mitigate new and emerging threats that are spreading fast among cyber criminal operators.  

Risk assessment: an ally for cybersecurity systems 

When using external providers, certain services and users will be managed outside the company. This means that people who are not part of the organisation are able to gain access to its systems. This complicates the task of detecting breaches and potential threats in the devices that form part of the supply chain. Unfortunately, this then meaningfully increases the likelihood of cyber attacks through this channel.  

In light of this, the solution lies in ensuring a comprehensive analysis of the security status of all endpoints with access to an organisation’s systems.  

It is only by conducting a thorough risk assessment, that companies can proactively identify current threats and potential risks and vulnerabilities across all their devices. This information enables organisations to tailor their cybersecurity systems to address any detected gaps, thereby mitigating the risk of attacks and protecting their data and confidential information. 

Other tips to mitigate cybersecurity breaches  

Once the vulnerabilities in devices have been identified, companies need to establish the solutions that are appropriate to protect themselves against these weaknesses and be able to remediate them. Some of these key measures include:  

Patch Management 

A risk assessment will pinpoint the weaknesses in your devices and servers, but what then? With Patch Management solutions, companies are able to plan, implement and manage the entire patch lifecycle. This allows them to prevent and mitigate vulnerabilities that could compromise endpoint cybersecurity. 

Implement or adopt a zero trust approach  

One of the risks of allowing third parties to enter a company’s systems is the possibility of losing control over who accesses sensitive information. Implementing zero trust technologies promotes a default-deny approach, allowing that only processes and applications classified/verified as trusted can run on the systems. 

Establish a unified cybersecurity platform 

Given the exposure to potential third-party vulnerabilities, it’s best to implement layered security to protect from all angles in case one security control fails. By adopting an integrated platform, businesses are able to create a cybersecurity mesh that safeguards networks, devices, users, and data from any threat across all aspects of their business model. 

Establishing a cybersecurity protocol to mitigate supply chain risk is a serious responsibility for organisations. To ensure that the measures implemented are as effective as possible, it is essential to first run a risk assessment that detects vulnerabilities and threats throughout the supply chain. This will help strengthen protection against new and evolving threats.  

Just six months after the partial collapse of the Francis Scott Key Bridge in Baltimore, Maryland, threw the US’ supply chain into disarray, the country’s logistics operators are staring down the barrel of another major disruption. 

“Things were just starting to get back to normal,” Kenneth Sanchez, CEO of Chesapeake Specialty Products, told Reuters on Wednesday. 

However, unlike the unexpected, accidental closure of Baltimore’s port, the looming crisis is both predictable and entirely avoidable. The 85,000-strong International Longshoremen’s Association (ILA) is preparing to begin industrial action that will halt operations at every major port on the US’ East and Gulf coasts. 

The strike is taking place in response to attempts by the United States Maritime Alliance (USMX) to get the union to accept what ILA President and chief negotiator, Harold J. Daggett, calls “a low-ball wage package.” 

A low-ball offer 

Refuting repeated claims by the USMX that negotiations over an upcoming contract had broken down, the ILA claimed in a statement that the two sides have communicated multiple times in recent weeks. The stalemate remains in Master Contract negotiations because USMX continues to offer ILA longshore workers an unacceptable wage increase package, according to an ILA statement. 

“They call me several times each week trying to get the ILA to accept a low-ball wage package,” Daggett said. “My ILA members are not going to accept these insulting offers that are a joke considering the work my ILA longshore workers perform, and the billion dollar profits the companies make off the backs of their labour.” 

The East Coast ports handle approximately 35-40% of US imports and exports, while the Gulf Coast ports account for 10-15% of imports and 20-25% of exports.  

A full scale shut down of 36 ports in the Eastern United States could have major consequences for the country’s supply chain. Last month, the five biggest ports on the East and Gulf Coasts processed about 24,766 40-foot containers of imports and exports, with a total value of around $2.7 billion per day.

2024’s biggest supply chain disruption? 

If the ILA goes on strike, it could represent a disruption of similar magnitude to the drought in the Panama Canal earlier this year. A report by industry intelligence firm project44 highlights a previous example of the impact that a stevedore strike can have on US supply chain. Their report notes that the US West Coast experienced similar disruptions in June of 2023 due to delays in reaching a new contract. 

On June 3, 2023, after working without a contract since July 2022, union workers staged a “no-show,” where none reported to work for the day.  After just one day of closures, it took three weeks for ports to return to normal dwell times, with delays increasing by as much as 148%. If a full-scale strike occurs on the East Coast, it would likely last longer than one day, and the disruptions would be even more severe. For every one week of an ILA strike in 2024, project44 estimates it would take 4-6 weeks to fully recover.  

“Ahead of the peak holiday retail season, extreme weather and industrial strikes are heightening pressures for supply chains. With supply chain disruption becoming the norm, organisations must become more agile to avoid lasting impacts; data insights are key to this,” said Renaud Houri, EVP of International Markets at project44. “In layman’s terms, this means businesses have a holistic view of their operations to make better, faster decisions in the face of disruption, therefore resulting in superior on-time deliveries and happy customers.” 

Rail, air, and the West Coast

A strike or work stoppage would severely limit the amount of cargo that can be processed at US ports, and organisations are already scrambling to find workarounds. 

These have included retailers, manufacturers and other importers rushing to import goods ahead of the strike deadline to avoid having their cargo stuck. Other organisations have turned to costly air freight alternatives, or rerouted shipments to West Coast ports, completing their journeys via rail. 

A prolonged strike by the ILA, alongside an ongoing strike by 30,000 machinists at Boeing that Reuters reports has already started affecting the embattled aircraft maker’s supplier network, could allegedly harm growth in the US job market next month ahead of the November presidential election. 

In the supply chain sector, disruption is the new normal. Examples range from geopolitical tensions in the Red Sea leading to slower, reduced trade and rising global costs, to mounting pressures on sea freight and truck transport beyond the region. 

Diversion, disruption, and disaster — Supply chains in 2024 

Diversions from the traditional Suez Canal route to the longer Cape of Good Hope add approximately 9,000 nautical miles to shipping routes. This has caused air freight costs to skyrocket. As a result, logistics providers reported a 25-30% increase in demand for mixed sea and air transport in January 2024. Meanwhile, the broader transport landscape also faces significant challenges. For example, Mediterranean ports across Algeciras, Barcelona, and Tangier-Med also find themselves grappling with unprecedented congestion. 

Outside of transport, disruption is also becoming more common and severe. T combined disruptions of the COVID-19 pandemic, political tensions, and extreme weather events have significantly reduced material and labour availability across various industries’ supply chains. In fact, by 2050, developing nations may lose approximately 92 million working-age individuals and gain over 100 million elderly people. This development poses significant issues across a range of industries. The risks associated with overseas operations are leading to an increase in reshoring and nearshoring. But these strategies also come with their own set of obstacles. Reshoring and nearshoring require investment in new infrastructure, updates to distribution networks, and a potential need for buffer stocks to minimise disruptions in the interim. In short, there are no easy answers.

ESG is another area that poses significant challenges and opportunities for businesses. Reducing Scope 3 emissions, for example, which often make up a substantial portion of a company’s total emissions profile, requires full visibility across complex supply chains, the collection and reporting of organised and standardised data, compliance with regulatory standards, and ongoing stakeholder engagement. 

In the face of the above supply chain trends and challenges, organisations must build operations with the right balance of resilience and efficiency, or risk losing out. Here are six key strategies to follow to remain ahead in today’s disruptive marketplace:

1. Data transparency and visibility

To effectively navigate an interconnected supply chain ecosystem, organisations must establish a robust foundation of transparent and accessible data. 

Leaders must prioritise rectifying foundational issues within master data, ensuring data integrity, and optimising system architecture for seamless data flows. Enhance visibility and mobilise near-real-time information sharing to detect trends at an early stage and make informed, agile decisions.

2. Scenario planning

As supply chain dynamics become more complex, traditional planning methodologies are no longer adequate. Leaders need to invest in advanced scenario modelling capabilities to assess the impacts of possible scenarios across the supply chain. 

Adopt the right planning tools and integrate inputs from business-wide functions to build comprehensive plans that balance capacity, risks, customer demands, and financial goals.

3. Diversification and resilience 

Building resilience through diversification is essential to mitigate disruptions effectively. Organisations must cultivate a diversified network of suppliers, warehouses, co-manufacturers, and distributors capable of swiftly adapting to unforeseen disruptions and shocks.

4. A balanced approach to inventory management

Strategically deploy buffers for the right products in optimal locations. 

Leveraging dynamic portfolio segmentation and predictive replenishment strategies can help businesses shift from a reactive to proactive inventory management approach, allowing them to maintain optimal stock levels while minimising risks and protecting cash.

5. Strategic partnerships and collaboration

Strategic partnerships and collaboration are crucial for success in an interconnected global marketplace. 

Supply chain leaders must collaborate closely with logistics providers, suppliers, and stakeholders to create a network of trusted partners. Sharing resources, information, and best practices can help organisations to enhance their resilience, responsiveness, and overall quality of products and services throughout the supply chain.

6. Sustainability and circularity

Supply chain leaders must embrace ESG principles. Sustainability should permeate every aspect of operations, from product design to end-of-life management. 

Promote circularity by reviewing product lifespans, implementing take-back schemes, exploring recyclable materials, and adopting low-emission distribution channels. By assessing their carbon footprint and building tailored improvement strategies, organisations can integrate sustainability into the very fabric of their operations, paving the way for long-term value creation and resilience.

Final thoughts 

Supply chain management has been fraught with challenges in recent years. In response, businesses are trying to acclimatise to the volatile market in which they now find themselves. 

Meanwhile, they must also prepare themselves for the new challenges that the future is likely to bring. That will requirebuilding operations with the right balance of resilience and efficiency. 

The companies that are proactively adapting, leveraging technology, diversifying supply chain strategies, and embracing innovative approaches to ensure resilience and competitiveness are the ones that will be able to successfully navigate the ever-changing global supply chain landscape. 

Disruption the new normal for UK supply chain managers, according to new research from spend management firm Ivalua.

Ivalua’s report found that nearly half of UK businesses (47%) have experienced an increase in supply chain disruption in the last 12 months. In the last year alone, a significant portion of UK businesses experienced disruption. High inflation (79%), high energy/fuel costs (75%), the war in Ukraine (53%), and the Red Sea conflict (44%) all affected UK businesses’ ability to procure goods and manage their supply chains.

The study of 300 supply chain and procurement decision-makers in the UK found that over the next 12 months, 45% anticipate that supply chain disruption will increase. In fact, 60% of UK businesses agree that after years of disruption, their supply chains feel more fragile than ever.

Beating the trend — effective disruption mitigation strategies   

As supply chains and procurement teams battle a growing ambient likelihood of disruption, UK businesses highlighted several strategies that they said had been effective at mitigating the impact of disruption to their value chains. 

Improving the geographical diversity of their supplier base (64%), finding alternative suppliers for critical goods and services (64%), increased nearshoring (63%), and increased onshoring (61%) were all highlighted as increasing supply chain and source-to-pay process resilience. 

“Supply chain disruption continues to have a significant impact on business operations due to repeated, unpredictable ‘Black Swan’ events,” comments Ian Thompson, VP Northern Europe at Ivalua. “These major disruptions used to be rare, but now feel like a fact of life. This has meant global supply chains have become more fragile than ever, causing delays, shortages, and increased costs as factories shut down and transportation networks fall victim to delays. Consequently, UK businesses feel like they’re stuck in a loop of constant disruption, unable to fully recover after each event.”

Preparing for disruption amid uncertainty  

The increasing number of disruptive supply chain events have prompted organisations to re-evaluate supply chain strategies to insulate themselves from supply chain shocks. However, 46% say they don’t have enough sufficient visibility. This lack of visibility makes it hard to understand which suppliers are impacted by supply chain disruption. At the same time, 43% of organisations say they can’t adapt quick enough.

To deal with ongoing uncertainty, UK businesses are focusing on adopting the right tools and processes. Over half (58%) of organisations said investing in technology to improve supply chain visibility has been very effective at helping to mitigate the impact of supply chain disruption, while 58% said the same for collaborating with suppliers to share more risk data. A further 71% said implementing AI to automate supplier risk management has been effective at reducing the effect of supply chain disruptions.

“Four-in-ten UK businesses agree that their supply chain recovery is moving at a snail’s pace, so it’s vital they take proactive measures to minimise the impact of disruptions,” continues Thompson. “This means arming procurement teams with the right tools to improve supply chain transparency and collaboration.”