Since COVID-19 laid the global supply chain out cold in 2020, it’s made an impressive recovery. But as 2025 approaches, many issues remain for companies to deal with, as supply chains still have fissures running through them. 

Read also: Resilience Through Adversity: How Recent Turmoil Has Strengthened Supply Chains

Many regions are disrupted by war, and others are teetering on the brink. Businesses are also struggling with fluctuating customer demands and changeable markets. For manufacturers sourcing raw materials, the issue is compounded by climate change-related volatility around crop yields, and political instability in important areas for minerals and similar commodities. 

If there’s a point of good news, it’s that organizations in all verticals are learning how to cope with uncertainty. It’s no longer a shock, and now they’re developing new tactics, tools, and technologies to ride the waves. 

Primarily, supply chains are shifting to digital, adopting artificial intelligence (AI), machine learning (ML) and the internet of things IoT. Automating tedious manual processes reduces the risk of errors and saves time for employees. Improved AI-powered data analytics platforms collect and crunch massive datasets to deliver reliable insights in real or near-real time. 

According to PwC, the top technologies being adopted for global supply chains are cloud-based common data platforms, IoT, and advanced analytics. With these technologies, companies can improve forecasting for both demand and risk, gain visibility into the entire supply chain, and optimize resource allocation. All of this contributes to cost savings and improved operational efficiency. 

Supply Chain Risks Are Increasing in Volume and Impact

After a brief post-COVID recovery, supply chain disruption is rising again, with threats coming from multiple vectors. Extreme weather events are more common, and climate change is affecting traditional shipping routes. Because of prolonged drought, the Panama Canal Authority has restricted daily traffic by about 40% compared with 2023. This affects 2.5% of all seaborne cargo, and 14% of US maritime cargo. 

War is disrupting important supply chains across the Black Sea and the Suez Canal, and could soon affect the seas around China and Taiwan too. By January 2023, the volume of containers traveling the Red Sea had dropped by 75%. Meanwhile cyberattacks and labor strikes, like those in the US in October 2024, remain a menace. 

Overall, the risks of shipments becoming delayed, lost, or damaged is greater than ever. Simply traveling via the Cape of Good Hope instead of Suez adds up to 10 days to the journey. Lead times are 28% higher than before the pandemic, pushing manufacturers to rethink their supply chains to build in resilience. 

Many are moving to diversify their supply chains with “supplier +1” methods. Almost all are baking in flexibility, running stress tests, planning for longer lead times, and ensuring that they are agile enough to quickly pivot supply chains. 

These new priorities are driving adoption of supply chain data analytics platforms like Qlik, for real-time tracking, reliable predictions about potential disruptions, and risk modeling to improve supply chain risk management. In a similar vein, PwC recommends transforming a linear supply chain into a single digital ecosystem, to gain total visibility and make decisions with all tier 1 and 2 suppliers based solidly on data. 

Costs Are Growing Higher and More Volatile

Increasing supply chain disruption is also pushing up costs for manufacturers and importers. Traveling via the Cape of Good Hope adds over $1 million on average in fuel costs, and container costs are rising with every war development, tropical storm, and strike action. They are already more than double historical averages. At the same time, climate change is affecting crop yields in unpredictable ways. 

Ordinarily, companies might simply pass price rises onto the consumer. But consumers are already paying more for fewer goods. After years of inflation and uncertainty, they aren’t open to absorbing any more price shocks. CEOs are striving for profitable growth, which requires minimizing disruption and driving down costs. 

Part of the problem is that prices aren’t just going up, they are also volatile. It’s difficult for anyone to know which commodities might jump in price and when, and which might fall, making it harder to take appropriate action. 

Some verticals are onshoring and near-shoring to shorten supply chains. By the end of 2023, 97% of companies said they were reconfiguring their supply chains. In other verticals, reshoring isn’t a possibility. Instead, they can use Hedgify to secure price protections on vital raw commodities, reducing financial uncertainty. 

Price protections for raw material procurement were once only accessible to multinational enterprises with access to exclusive commodity futures platforms, expensive supply chain insurance policies, and sophisticated scenario modeling know-how. Hedgify is changing the landscape by offering easy access to simplified protection contracts, comfortable payout schedules, and insightful commodity-specific analysis reports.

For all organizations, data analytics enables them to improve forecasting and minimize disruptions, helping lower costs and improve operational efficiency. Automating manual processes is also important for reducing errors, which can be expensive to fix, streamlining workflows, and improving operational efficiency. 

Sustainability as a Rapidly Rising Concern

Manufacturers today have a new issue on their priority list: sustainability and ESG compliance. Environmental and social justice issues rule many wallets, pushing the need to make the supply chain as green as possible, minimize the carbon footprint, and maximize the circular economy. As awareness of the “long supply chain” evolves, consumers are also looking at Scope 3 emissions, which can make up 65-95% of an organization’s carbon footprint, according to PwC. 

The supply chain also needs to be ethical, both to please consumers and to meet new regulations. In 2022-3 alone, at least eight countries introduced laws around modern slavery and human rights in the supply chain. The SCDDA in Germany, CS3D in the EU, and Forced and Child Labour in Supply Chains Act in Canada are all live or coming on line shortly. Shipments can be impounded if they don’t comply with regulations, with over 4,000 seized in the US in 2023 for contravening forced labor laws. 

The regulatory burden for ethical supply is only going to increase. Organizations need supply chain transparency to be confident that they are only working with companies that comply with labor laws, prevent human rights abuses, and meet best practices for sustainability and social justice.  

This requires far better end-to-end supply chain visibility. Companies are adopting solutions like Z2Data, a holistic, data-driven supply chain risk management platform that tracks and assesses the compliance profile of every third party. These tech tools analyze enormous datasets to deliver real-time insights that allow companies to optimize routes so as to minimize waste and emissions, and monitor ESG compliance across the supply chain. 

Supply Chain Managers Need All the Help They Can Get

The global supply chain is not in a good place. Rising risks, costs, and ESG demands are increasing the burden on manufacturers and any company that relies heavily on long supply chains. At the same time, volatility and uncertainty are handicapping decision-making. Supply chain leaders need all the power of new tech tools to successfully cope with unpredictability and help their organizations to remain profitable and competitive.