GEP's Procurement and Supply Chain Outlook for 2025

The procurement and supply chain landscape appears to be on the cusp of unprecedented transformation, with technological innovation and geopolitical complexities converging to create a challenging new operational environment.

GEP's latest report, Outlook 2025: Procurement & Supply Chain, offers a visionary view of the strategic imperatives and challenges facing enterprises over the coming months. 

Compiled by the Thought Leadership Council at GEP, the paper gives six key predictions and accompanying guidance for leaders.

"After several years of mitigating inflation, disruption, supply shocks, conflicts and uncertainty, we are currently in a relative period of calm," comments John Piatek, Vice President at GEP. "But it is very much the calm before the coming storm.

"This report provides procurement and supply chain leaders with a prescriptive guide to weathering the gale force headwinds of protectionism, tariffs, trade wars, regulatory pressures, uncertainty and the AI revolution that we will face in 2025."

AI: The new supply chain architect

Outlook: GEP contends that advanced AI tools will automate sourcing processes and harness real-time, unstructured analytics to enable smarter decision-making. AI agents will be instrumental in demand forecasting, risk management and supply chain optimisation, transforming procurement from a tactical to strategic function. 

Guidance: The advice from GEP to leaders is to prioritise AI investments to streamline operations and improve decision-making capabilities. Implement pilot programmes using AI orchestration platforms and agents in high-impact areas, ensuring robust data governance and planning for scalability.

Changing value metrics

Outlook: Success, GEP says, will be defined by resilience, sustainability and compliance in 2025 – in addition to cost efficiency.

Guidance: Establish KPIs focused on adaptability, carbon footprint reduction and supplier diversity. Leaders should highlight the broader value to stakeholders beyond mere cost savings.

Regulatory scrutiny 

Outlook: Growing regulatory requirements will drive the need for greater transparency and accountability in supply chains.

Guidance: Enhance supplier audits, implement ESG tracking tools and embed compliance considerations into strategic procurement decisions.

Tariffs incoming

Outlook: Amid trade barriers and geopolitical challenges, nearshoring and friendshoring will help strike a balance between resilience and cost. 

Guidance: Update total cost of ownership (TCO) metrics to account for geopolitical and environmental risks. Develop regional supply networks to enhance flexibility.

Volatility in energy market 

Outlook: Increasing energy costs and regulatory pressures will drive the transition toward sustainable operations.

Guidance: Prioritise investments in renewable energy and restructure supply chains to meet ESG commitments and regulatory standards.

Price rises

Outlook: Expecting inflation to remain stable and interest rates to return to near-zero levels, as they did from 2008 to 2022, appears unrealistic. Tariffs and other factors could push prices higher.

Guidance: Maintain a strong focus on cost savings to support business success and deliver value to stakeholders.

To read GEP Outlook 2025 in full, click here. 

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