As the year comes to a close, supply chain professionals are reflecting on the challenges of 2024 while preparing for the complexities of 2025. Matt Stekier, a principal at Plante Moran's supply chain and operations consulting practice, provides an in-depth analysis of the evolving landscape of supply chains, emphasizing the need for continuous adaptation to overcome persistent hurdles.
Throughout 2024, supply chain leaders faced a series of ongoing issues, significantly influenced by advances and expectations surrounding artificial intelligence (AI). While generative AI was prominently discussed, its application remained predominantly within larger corporations. Stekier notes that “despite the promotional push behind it, generative AI largely remained the purview of the very largest businesses.” He highlights a notable discrepancy regarding what supply chain managers needed versus what AI technologies could effectively deliver, underscoring a gap in true AI capabilities versus traditional data science solutions.
Compounding these technological challenges, labour shortages continued to disrupt operations, particularly in materials handling. Small and mid-sized manufacturers, relying on manual processes, struggled as larger competitors established nearby facilities, thereby intensifying competition for a constrained labour pool. This situation has thrust automation solutions into the spotlight, prompting businesses to explore these technologies for optimising warehouse storage, enhancing picking operations, and improving forecasting and sourcing efficiencies.
Supply chain management also faced complications stemming from inventory planning. Manufacturers struggled as original equipment manufacturers (OEMs) scaled back orders to reduce excess inventory accumulated during previous stockpiling efforts, leading to challenges in relationships with suppliers. As Stekier puts it, “this underscored the need for open dialogue in supplier/manufacturer relationships.” He advocates for transparent communication around inventory management to mitigate disruptions that could jeopardise suppliers’ operational viability.
Geopolitical factors have acted as catalysts for reshaping supply chains, with nearshoring emerging as a prevalent strategy. Stekier notes that initiatives to relocate production closer to end-users intensified, particularly evident in brands serving U.S. consumers, with Mexico seeing significant growth as a nearshoring destination.
Looking ahead to 2025, Stekier outlines a shift in mindset among supply chain professionals as they face ongoing challenges. Leaders are expected to proactively implement contingency plans and resource allocation to navigate predictable disruptions such as extreme weather and geopolitical crises. “No one knows what will happen in the future,” he observes, but the expected shift towards proactive measures in supply chain management marks a critical evolution in business practices.
Moreover, supply chain professionals are anticipated to become more integrated in product development processes, focusing on cost-effective manufacturing methods while ensuring compliance in highly regulated sectors. The strategic implementation of dual sourcing—often discussed but seldom executed—will gain traction, allowing organisations to diversify their supply chains for critical materials and components.
With risk management taking centre stage, businesses are poised to refine their understanding of vulnerabilities within their supply chains. Leaders will increasingly grapple with fundamental questions regarding the visibility of their supply chain operations, critical components, and the robustness of contingency plans against supplier failures.
As 2024 draws to a close, the forecast for 2025 indicates a landscape in which supply chain operations are not just reactive but are strategically designed to navigate complex realities. As Stekier succinctly puts it, “the best way to predict the future is to create it.” The upcoming year will likely see supply chain leaders embracing this philosophy as they strive for operational excellence amidst ongoing challenges.
Source: Noah Wire Services