The geopoliticization of supply chains
The COVID pandemic elevated geopolitical understanding as a critical consideration for supply chain managers – and it remains essential to their success today. ...
Supply chain
Supply chain is where strategy meets execution: How fast can we transform?
The 2025 IMD Global Supply Chain Survey reveals how senior executives across 20 industries rate their organization’s performance against 26 dimensions shaping supply chain management.
Exclusive data gathered over the past decade highlights the specific challenges leaders face when transforming supply chains as an integral part of a customer-facing company. Here are the key insights.
Against the backdrop of unprecedented US tariffs which have caused global stock markets to tumble, companies will be facing complex and rapidly shifting cost pressures and strong fluctuations in demand, both in volume and geography. The speed with which leaders can achieve significant supply chain transformations is an increasingly urgent factor in a company’s success.
In the 2022 edition of our Global Supply Chain Survey, we saw that the agenda for supply chain leaders had kept growing. Traditional topics – such as integrating supply chain and business strategy, supply chain segmentation, and systematically applying sales operations and planning (SO&P) processes – consistently ranked as most important in many organizations. But newer topics, such as supply chain resilience and Cybersecurity, increasingly preoccupied leaders even after the pandemic.
Three years later, while complexity persists, we see that many companies are struggling to transform their supply chain operations to build competitive, customer-facing, and resilient organizations. The 2025 Global Supply Chain Survey tabulates the responses of 300 senior supply chain professionals from leading international companies across a range of more than 20 industries. Survey participants rank the importance of critical topics and assess how well their organization is performing in each area. Notably, 2025 survey respondents report major gaps between the relative importance and the implementation progress achieved to date in many critical topics.
Topping the priority agendas in 2025 for supply chain leaders over the next five years are:
- Integration of supply chain strategy with business strategy
- Cybersecurity
- Supply chain resilience
The singling out of these three topics reflects the challenge of aligning supply chain operations with broader business goals, along with the need to address evolving geopolitical, environmental, and digital risks and uncertainties.
“While supply chain executives are busier than ever dealing with a host of issues, making tangible progress is slow.”
Managing complexity to build strategic advantage
While supply chain executives are busier than ever dealing with a host of issues, making tangible progress is slow. At the same time, supply chain leadership has become a strategic imperative – a business-critical function for securing value capture and revenue growth. Rising geopolitical uncertainty – and its impact on the footprint of future supply chains – needs to be considered as part of the process. In recognition of this strategic dimension, today’s supply chain leader must have a seat at the decision-making table of every organization to drive change.
The 2025 data suggests that technologies such as artificial intelligence (AI), machine learning (ML), large language models (LLM), generative AI for supply chains, touchless flows, digital twins, supply control towers, and cognitive collaboration centers are ever more critical, showing the biggest jumps in importance since 2022. But the ability to deploy those technologies requires strong data foundations which are often not yet in place in many organizations.
The 2025 results also show that 3D printing/additive manufacturing and other technologies to manufacture goods, as well as blockchain and self-driving vehicles, are lingering at the bottom of the list of priorities for leaders, with blockchain and last-mile delivery experiencing the biggest decline in perceived relevance since 2016. This might suggest that these topics have failed to deliver tangible results, that the hype cycle has blown over, or that they have simply been overshadowed for the time being by more pressing priorities and opportunities.
More than 70% of supply chain transformation projects either fail or lag behind their envisaged targets.
A shifting environment makes implementation difficult
Navigating geopolitics and changing trade agreements debuted near the top of the priorities list (sixth place) in 2025, underscoring the growing pressure on supply chain leaders to manage regulatory uncertainty, trade disruptions, and evolving environmental, social, and governance requirements. It remains unclear how quickly those new requirements can be addressed.
From 2022 to 2025, survey respondents confirmed that progress in implementing key supply chain priorities remained insufficient, even in top-ranked areas. According to the leaders we surveyed, the largest execution discrepancies in supply chain organizations today lie in:
- Advanced analytics
- Real-time, data-driven decision-making
- AI/ML
- Digital ecosystem interoperability
But while leaders may perceive a lag in execution, these areas of digitalization show steady progress in implementation over the 2016, 2019, 2022, and 2025 surveys, underscoring their importance to all aspects of modern supply chain management.
We have seen relative progress over the past decade in the management of supply chain compliance and globalization of supply chain footprint, where the gap between importance and attainment is nearly closed. Indeed, we may have gone too far on globalization. The issue of sustainability in the supply chain sees implementation improve, while at the same time, importance decreases markedly – likely as a reaction to the postponed sustainability regulations in the EU and the exit of the US from the Paris Agreement.
In the face of the supply chain function’s increasing complexity, it is perhaps not surprising that leaders find it difficult to execute on maintaining a talent pool, supply chain resilience, and governance, all of which show regression in implementation in the 2025 results.
Without an integrative approach supported by senior leadership for a sustained period, progress on key dimensions of supply chain management risks being slow and challenging. More than 70% of supply chain transformation projects either fail or lag behind their envisaged targets.
Today, persistent shockwaves change business priorities almost quarterly, undermining longstanding business models in the process.
Looking ahead: where to take action
Digesting the results of the 2025 Survey, the future looks more challenging than the past. As Magdi Batato, former COO of Nestlé, observed to us in a recent interview: “You can’t be agile in your supply chain alone.” Many external partners in your ecosystem, and many internal stakeholders across various functions, also need to be aligned. Moreover, operating system changes like shifting a manufacturing footprint, maintaining world-class quality management systems, or rolling out new IT/ERP systems, require time. This is evident when reviewing the rate of progress over the past decade.
When we ran our first and second editions of the Survey in 2016 and 2019, a three-year cadence seemed appropriate. Today, persistent shockwaves change business priorities almost quarterly, undermining longstanding business models in the process. These include digital transformation, supply chain resilience (highlighted particularly during COVID-19), and sustainability and inflation pressures, alongside new geopolitical realities including sanctions, trade tariffs, and armed conflict in some regions.
Organizations must therefore take an integrative approach, supported by the executive team and prioritizing the following areas:
- Align supply strategy with overall business strategy. Supply chain leaders must have a seat at the executive committee table with their peers from sales, marketing, R&D, and IT. In this central role, supply chain leaders will have to orchestrate complex interactions between different functions to build a more resilient and customer-centric business that will thrive in the face of geopolitical disruptions.
- Keep focusing on supply chain basics. Issues such as supply chain strategy and sales and operations planning (S&OP) will continue to serve as industry mainstays, with ongoing transformation initiatives requiring both a renewed focus on core capabilities including resilience, talent retention, and compliance, as well as increased innovation and technology adoption.
- Build a successful digital transformation strategy. Supplier digitalization, big data for predictive analytics, AI/ML, digital twins, and supply control towers are increasingly important in supply chains. However, challenges persist in translating these priorities into effective actions, thereby limiting their full potential.
While COVID may seem a distant memory, it taught us that sudden market shocks can cause two to three years of global supply chain imbalances.
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