Top 7 Supply Chain Trends for 2025

What are the top trends in the supply chain for 2025?

Feel like your supply chain is always one step behind?

Between unexpected disruptions, rising costs, and increasing customer expectations, supply chain management has become a game of constant catch-up. If you want to stay ahead, it’s essential to consider Supply Chain Trends 2025 and how they will impact your strategy.

Leigh Chesley hosts our annual Top 7 Supply Chain Trends webinar. After taking a brief look back at 2024, she shares the top 7 trends we see affecting the supply chain in 2025.

Watch the replay below.

Speaker

Leigh Chesley
Chief Transformation & Strategy Officer
Longbow Advantage

The supply chain industry is transforming rapidly, and 2025 promises to bring even greater challenges and opportunities. Are you ready to adapt and thrive?

We dive deep into the Top 7 Supply Chain Trends for 2025 so you can gain actionable insights to future-proof your operations. Here’s what we cover:

1. AI-Driven Predictive Analytics Dominate
   Discover how AI is revolutionizing forecasting and decision-making, helping companies mitigate disruptions, optimize inventory, and reduce costs.
2. Tariffs and Evolving Trade Dynamics Redesign Supply Chains
   Explore how shifting trade policies and rising tariffs are reshaping sourcing, production, and logistics networks worldwide.
3. Reshoring and Nearshoring Accelerate
   Learn why more companies are moving production closer to home to minimize trade risks, cut lead times, and boost regional efficiency.
4. Cybersecurity Investments Surge
   Find out how to protect your supply chain from growing cyber threats, including ransomware and software breaches, with robust security strategies.
5. Carbon-Neutral Logistics Gain Momentum
   See how companies are meeting sustainability goals with green technologies, alternative fuels, and eco-friendly warehousing.
6. Digital Twin Adoption Grows
   Discover how virtual modeling tools are enabling businesses to stress-test supply chains and prepare for disruptions.
7. Data as the Backbone
   What will give your company a competitive edge in 2025? Analytics based on accurate data. Having access to the correct data will enable you to make the right decisions and will ensure that AI-powered processes return accurate results. The more real-time that data is, the more timely you can act on it.

Why Watch This Webinar?

• Stay Ahead: Understand the latest supply chain trends to keep your business competitive.
• Plan for the Future: Get actionable strategies to enhance resilience, efficiency, and sustainability.

Watch the webinar replay

Want to watch our Top 7 Supply Chain Trends for 2024 and see how close we were to the mark? Watch here.

Top 7 Supply Chain Trends for 2025 Webinar Transcript

Hey everyone, welcome to the webinar. Thanks for joining me today. For those that don’t know me or I don’t know you, my name is Leigh Chesley, and I am the Chief Strategy and Transformation Officer here at Longbow. We will be saving some time at the end for Q&A if we’ve got time available, so feel free to drop your questions into the chat. We will either get to you live, or more than happy to follow up offline and make sure we get those questions answered for you.

So today we’re going to focus on what’s next for 2025 in supply chain, trends that will impact warehouses operations, strategic planning. And I think this is my third time doing this webinar, and it’s great to see some familiar people on the line today before we dive in, though we’re going to start out today with a little story time from Leigh.

So I want you to take a moment and imagine you hired a carpenter to build you a beautiful new house. Your dream house. You wanted it done well, you wanted it done right and quickly, and the person you hired was known for speed and quality. So he gets the plans, begins to work, uses the first ruler he found in his toolbox, measures on every piece of wood. The house goes up quickly, but when it came time to add the roof, things didn’t quite fit. The walls are uneven. The windows and doors have gaps. The structure truly wasn’t even sound and so frustrated, the carpenter discovers the problem. The ruler he had relied on in the very beginning to make all of his decisions was completely warped and inaccurate. When it came down to it, he worked quickly, but he had trusted a broken tool.

And I love this story because it’s the perfect metaphor for what we’re talking about over the next 2025 minutes today. So keeping in mind, whether it’s a construction project warehouse efficiency or a full supply chain, success really depends on building with precision and purpose from the very beginning.

So let’s start with AI. I used to say that we were going to start with it as a way to address the buzzword in the room so that we could move on to everything else. But now it really does hold true that we cannot talk about trends without talking about the impact AI and predictive analytics are having on our business.

When I talk with customers, I consistently hear that they believe integrating AI and predictive analytics into their data strategies has become central to creating and maintaining a competitive edge. But what I also hear is that it’s hard to figure out where it will actually be, in fact, impactful and not just interesting to look at the data. We all know that warehouses today deal with constant changes, whether it’s product labor or customer requirements, and we also know that a warehouse is the kind of environment that is ripe for AI because of the massive amounts of data created, and even just an hour. It’s really almost a perfect use case for identifying patterns, predicting risks and making recommendations. But what also remains true is that AI is only as smart as the data behind it, so if you’re optimizing on incomplete or bad data, you’re really not optimizing at all. And in fact, it’s completely possible you’re doing more harm than good.

As we look into the next few years, analytics won’t just be about reacting, they’ll be about predicting. So if we imagine an easily and accurately planning a shift where every frontline worker is utilized efficiently, with no wasted time or resources. And then once that shifts plan being able to see demand shifts before they happen and adjust schedules to align in real time, we’re going to see more reliance on AI powered predictive planning this year, backed by historical data and real time insights, in addition to more effective labor planning, and we’ll also see an employee experience that’s predictable and competitive as you look at aligning the right associates, not just to the right shifts, but the right types of work in the days and times and maybe even the people that they tend to work best with.

But we also all know that labor planning and fluctuations don’t happen in a silo. So when you look at the inner workings of a warehouse, all roadblocks lead to product, right? We’re all doing everything we can to get product in and out as efficiently as possible. What we’re seeing is that by leveraging not just inventory data, but by considering other data points (for example, warehouse capacity, path optimization, robotics, inputs, inventory location), Ai helps warehouse operations maintain the right inventory levels and maximize the effectiveness of processes around those within the warehouse, so that things like over stocks and stock outs are avoided without having to really risk one in favor of the other.

And when it comes to transportation, AI will address adjust shipping routes on the fly, taking into account traffic, extreme weather, any other data input we can imagine. But since all roads and routes lead back to the four walls, the impact of AI on transportation will be felt in the warehouse and drive even more of, you know, the need for on-the-fly data, informed adjustments.

And I know that every for everyone here today who thinks that this is great, there’s probably even more of you who know your regions, your warehouses, your partners, your teams and your operations so well that there’s no algorithm that could optimize beyond your lived experience. And while I know that can be true, and trust me, I know it is a lot of the times, especially knowing who we have on here today, I think it highlights an important thing that often we tend to gloss over when we’re thinking about all of these big, shiny benefits of AI and predictive analytics.

It isn’t that the unified analyzed data is always giving us insights we never thought possible. It’s really that it will be giving us the time back oftentimes, so that we don’t have to do the data pull, the harmonization, the analysis, and the output that we’re doing today.

I was talking with a customer last week, and they’re saving 10 hours a week leveraging AI for predictive labor scheduling in just one site. The model that they’re using for this is pretty spot on with what they’ve been doing, aside from a few optimizations that it did catch. But we have to remember that sometimes the best thing about AI is that we just aren’t having to do the actual doing.

So as we look into 2025, and even beyond, you know, the next few years, we’re going to see AI used for resource allocation, inventory optimization, dynamic logistics, and time optimization.

All right, so from something relatively new with AI to a topic as old as logistics itself, we’re going to talk about Tariffs and Trade. So we’re beginning to see a lot of the specific impacts of the new administration’s trade policies play out now in real time, and historically, an increase in tariffs has resulted in the need for more diversified execution and fulfillment strategies. But the good news is that’s really all anyone has been talking about since March of 2020 so we’re pretty prepared for that.

But what’s continuing to evolve in 2025 is the who, what, when, and where of the impact and once again, the timely need for leaders to make relatively quick data-backed decisions to minimize disruptions and continue to be able to serve customers.

It’s likely we’re going to see more diversified sourcing across multiple countries in an effort to minimize tariffs, along with an increase in regional warehousing and distribution center hubs, but we’re going to talk about that a little bit more here later. So when it comes to your warehouses, knowing again, that all roads lead to inventory, you may see a return to just in case models, as opposed to just in time ahead of projected tariffs, as people are looking to minimize that overhead of the cost of the tariffs.

Historically speaking, we know that just-in-case can lead to a tightening of efficiency in other areas inside the four walls, because square footage is finite, so finding margin obviously becomes more important in other areas, flexibility in sourcing and the creation of a regional hub strategy can also lead to challenges in managing data to ensure profits are maintained in such a new strategy, and it isn’t really necessarily even the volume of the data, but more the need to interconnect it so that there’s a clear picture of how one lever impacts the other.

As new data points and opportunities come into play, as we look into 2025 in the next few years, what we’re looking for is sourcing, diversification, cost management, efficiencies there and regional hubs.

And speaking more of regional strategies, let’s talk more specifically about reshoring and near shoring. This has to be on the list in every boardroom right now, and likely has been for some time, given the dynamics that we just discussed.

In our second trend, we’re seeing companies bringing production closer to home, diversifying their 3PLs and other partner networks, and regionalizing their supply chain with warehouses. At the center of that evolution, everyone is hoping to be able to reduce risks with a more localized and diverse strategy. But at its core, the shift really isn’t even about geography. It’s about agility. And reshoring reduces exposure to risks and creates local jobs while cutting lead times and bottlenecks.

But the challenge with that is that reshoring and near shoring again will create data and efficiency complexity in any operation you already have, labor tracking, robotics, inventory management, capacity planning, everything happening all at once.

So as operations regionalize the complexity of harmonizing and actioning, that data grows with every new map, dot, new path, new labor plan, new route. So we’re really partnering with customers today to help them map their data strategy and ensure that responsive, responsiveness and agility don’t become tradeoffs for efficiency and profitability, by making sure they have the tools and the visibility needed to keep them focused on their ultimate goal of maintaining a competitive edge and what is becoming an increasingly complex market.

What we expect to see come out of this is hopefully some risk reduction as we’re bringing warehousing and production more localized, some job creation, shorter lead times, and again, an increase in data complexity.

Let’s move on now to everyone’s favorite topic! We’re going to spend a little time on cyber security. Nobody needs to be reminded that as supply chains become increasingly digital and data-laden, the stakes around that data management and data ownership get higher. A single cyber-attack can ripple across an entire operation and completely grind productivity to a halt. But that is nothing new.

Again, I’m sure everyone here knows that. So what about that makes it a trend for 2025, what’s changing?

Well, first, companies are increasing or investing increasingly heavily in AI-driven threat detection. These tools are becoming table stakes for protecting sensitive data, which makes sense when you consider the first trend and the fact that the benefit of AI grows with the more data and its complexity as it grows.

Secondly, I’ve seen some companies beginning to consider a hybrid solution. There’s discussion going on around redundancy, and if a mix of cloud and on-prem systems is the right next step for some operations, especially those that are extremely robotics-dependent, or in operations with very strict data and privacy protocols. Healthcare as an example.

Finally, what we’re seeing everywhere is that vendor scrutiny is absolutely increasing. Execs we talk to, IT teams we talk to across the board, ops teams, they’re holding their partners to an even higher standard to protect their networks, their data, their customers, their ability to serve the market as included as well. So we’re definitely getting deep into those conversations.

And for all the right reasons to invest in cybersecurity, and we absolutely have to be doing that, as with everything else these days, it’s an increase in focus on data, because it isn’t enough to just have the data and protect the data anymore. Companies need to have an advanced analytics strategy around data.

When it comes to cybersecurity, it’s not just about keeping bad actors out, it’s about turning that data into real-time proactive insights so that companies can be on the offensive when it comes to the security of their systems, and get ahead of vulnerabilities before a potential attack even occurs. The big picture is that cybersecurity isn’t just a defense mechanism. It’s actually, as foundational to resilience as any other moving piece in the supply chain, and potentially even more so.

If we continue to look into 2025—and again, this is a trend we’re going to see continue for the next few years—we’re going to see an increase in spending. We will potentially see some customers in some industries considering that hybrid model. And then absolutely continue to see an increase in vendor scrutiny, and I think we’ll see it evolve in terms of how customers expect to interact with us, around our security protocols and our technology.

Let’s talk about carbon neutral logistics. You know—and I think we all know here—that sustainability had a slowdown in 2020 when focus shifted more towards fulfillment at any cost. But over the last few years, we began to see a resurgence, and in 2025 we’re seeing customers, regulators, and investors, once again, pushing for those greener practices.

This is really leading operations to put together more carbon-neutral logistics initiatives, and especially as we’ve seen some of these larger players out there who’ve announced these goals, the pressure on the rest of the market has increased. So what we’re seeing today in warehouses is just a few renewable energy themes that have started to come forward.

Some things we’re seeing are solar panels for a different energy source, electric fork lifts for replacing traditional equipment, and more energy efficient cooling and lighting systems. Just some examples of things that we’ve started to notice.

Now, I think what’s important to remember is what we don’t know just yet. So what we don’t know is if the global trade policies we discussed earlier will impact this momentum one way or the other. On the one hand, reshoring has the potential to reduce emissions from long-distance transport. Then, on the other hand, the potential for a rising cost of goods from trade barriers, combined with relaxation of environmental regulations may limit investments in some of these green initiatives in the short-term, as margin and profitability is prioritized. 

What we do know, though, is that although the EPA in the States has relaxed some of its rules, individual states and international markets are continuing to enforce fairly strict emission standards, meaning that noncompliance with emission standards can still lead to risks and penalties—pretty significant penalties—and yet again, the common thread here remains data. 

Commits are really only good if we know how we’re tracking and the impact to all of our business objectives, green and financial. Without visibility into that efficiency in a unified way, there’s a tradeoff, potentially, between green initiatives and profitability, and obviously, ultimately, we want the two things to come together.

So again, what we’re seeing is that the teams who are winning here and being supported by their investors, their stakeholders, boardrooms, they’re able to see and tell the interdependent operational story and a unified view.

Looking into to this year and beyond, we’re going to see a continued push towards alternative energy and green warehousing. We want to keep an eye on the regulatory pressures and how the regular regulations, as well as maybe any relaxing of that may impact green initiatives.

All right, let’s talk digital twins! So digital twins are giving operations the ability to test their supply chain without disrupting it. This is the one thing, maybe in addition to AI, that’s been on the list for years now. But I believe 2025 is going to be a year of serious growth when it comes to simulations.

When you think about all of the trends and broad, sweeping changes to supply chain that we’ve talked about so far, the ability to model operations, simulate, and stress test is super interesting. We’ll see the data and AI tipping point we’re experiencing move beyond theoretical into strategic planning applications with the use of digital twins.

Risk modeling will allow businesses to simulate scenarios we’ve talked about today (extreme weather, trade barriers or cyber-attacks), showing exactly how ops could be affected and what steps to then take to minimize that disruption, good or bad. We’re going to have the ability to face reality head on.

On the efficiency side, cost optimization will come to life, helping to identify waste and uncover savings opportunities. One of the most tangible applications is the agility digital twins brings to decision making in the face of potential disruption. Questions in the moment, not even just modeling out long term solutions. And I know everyone is shocked to hear that again, all roads lead to data. But the very last thing anyone wants to be doing is modeling simulations on bad data or incomplete data. 

Digital twins, along with AI, are pushing operations to guarantee accurate, full picture inputs from robotics performance, labor interactions, inventory flow, equipment maintenance, and this is an opportunity for digital twins, AI, and predictive analytics to really work together. So I could see a world where, while AI refines the data and identifies the patterns, predictive analytics highlights areas of risk or opportunity, and digital twins simulate those outputs.

They’re really a tool for resilience and a way to future-proof operations to the extent that that’s actually possible. But companies with the data strategy to support it—I believe the potential for quick, informed decision making with these simulations could be a massive competitive edge.

As we look into the future here, we’re going to see absolutely more risk modeling. We’ll see more cost optimization as we’re doing additional modeling, and then this is ultimately going to result in more agility and our ability to react, pivot and make decisions faster.

So, and no surprise again, if there’s one trend that underpins every other theme we’ve discussed today, it’s the role of data.

The ability to collect, analyze and act on data is no longer a competitive advantage. It is the foundation for resilience, adaptability and growth in operations. So, in 2025 we’re seeing data strategies evolve from static reporting to real-time actionable insights. Supply chains are no longer relying on rear view mirror metrics. Instead, they’re transitioning to predictive and prescriptive metrics that empower leaders to make faster, smarter decisions with confidence. 

But the challenges is that data silos remain a significant hurdle. Warehouses, logistics teams, even broader operations often operate on disconnected systems. You all know that you experience it every day. You also know that this fragmentation can prevent a holistic view, making it difficult to understand how one adjustment impacts the entire chain.

So leaders who prioritize data harmony, harmonization, integrating data streams across functions, or building supply chains that act as interconnected ecosystems and enable faster, more informed decision making, rather than acting as isolated units.

Another shift we’re seeing is the focus on actionable data over meeting a sheer quantity of data. Your warehouses are producing millions of data points daily, and bad or incomplete data can mislead our decision making. So clear, validated data ensures that AI models, digital twins and advanced analytics perform optimally and deliver reliable results, as opposed to pointing us in the wrong direction. This is the cleanliness and the harmonization is really critical.

We’re also seeing a surge in the need for data democratization, making insights accessible to teams at any level of the organization in a way that they need it when they need it. So we’re working to empower workers on the floor with tools to interpret and act on data in real-time, because it’s no longer just about what leadership sees. It’s about ensuring that every decision maker from warehouse floor to the boardroom has the right information at their fingertips. 

And the bottom line here is really that data is the ultimate connector. It ties together every point for a unified execution strategy we will see companies that can effectively harness and unify their data not only stay competitive in 2025 but they’re going to set the bar for that long term success in our ever-changing reality.

So looking beyond 2025, we’re really looking for actionable insights out of data, data harmonization, and data democratization.

So to wrap up, we’ve gone through seven trends that are transforming supply chain in 2025 the insights and actions provided by AI, competitive analytics, and simulations are powering everything we do, and will be the foundations that keep us agile and successful, not just in 2025 but in these years to come. And just like the dream house, our work can only be as strong as the foundation we build on reliable tools, thoughtful integration and a commitment to precision are what make the difference between success and complete misalignment when our decision making process is accurately informed, every decision and adjust and adjustment will naturally support the larger structure, ensuring that it comes together with that end goal in mind. And I truly believe, with the right approach, the possibility for operations teams aren’t just practical, especially during a time that has the potential to be unpredictable, there is a massive competitive edge for those who are able to harness and power their data appropriately.

With that said, thank you all for joining me today to talk through the seven trends we’re seeing in 2025. I look forward to seeing you again soon.