Managing Procurement in Times of Supply Chain Disruption

This article is brought to you in association with Amazon Business.

The evidence has been accumulating for years, but the message is now unambiguous. Supply chain disruption is not an episodic risk to be managed when it arrives — it is a structural condition that procurement functions must be organised around.

The Red Sea crisis, the Panama Canal drought, tariff escalations and persistent geopolitical instability have each tested supply networks in distinct ways.

According to McKinsey's annual supply chain risk survey, 82% of companies reported their supply chains were affected by new tariffs in 2025, with between 20 and 40% of their supply chain activity impacted in some form.

For procurement leaders, the lesson is consistent: reactive postures are no longer viable.

The question facing chief procurement officers today is not whether disruption will occur, but how well their organisations are positioned to absorb it.

Supplier diversification as a structural priority

The instinct to consolidate a supplier base for efficiency gains has long driven procurement strategy. That logic has not disappeared, but it is now being rebalanced against a sharper awareness of concentration risk. When a single route, region or supplier accounts for a disproportionate share of inbound supply, the consequences of any localised shock are magnified.

Dual-sourcing has moved from contingency measure to mainstream practice. Data from recent industry research indicates that 73% of businesses have adopted dual-sourcing strategies, while 60% have moved towards some degree of supply chain decentralisation. Alongside this, nearshoring and onshoring are gaining traction — not solely as tariff responses, but as deliberate moves to shorten exposure to long, fragile logistics corridors.

The discipline here lies in designing diversification with purpose rather than simply multiplying supplier relationships. Adding suppliers without robust qualification, onboarding and relationship management creates a different kind of risk. The most mature procurement organisations are mapping their full supply networks — including sub-tier suppliers — and identifying where single points of failure remain hidden beneath the surface. Regulatory pressure is reinforcing this imperative: compliance obligations such as the Uyghur Forced Labor Prevention Act now require visibility not just into tier-one suppliers, but deeper into the supply base.

Scenario planning and contingency sourcing

Diversification of the supply base addresses structural vulnerability. Scenario planning addresses operational readiness when conditions change rapidly. These are complementary disciplines, and the gap between organisations that practise both and those that do not is widening.

Effective scenario planning in procurement goes beyond maintaining a list of alternative suppliers. It involves pre-qualifying those suppliers, stress-testing sourcing assumptions against credible disruption scenarios — a port closure, a geopolitical escalation, a sudden material shortage — and establishing decision triggers that activate contingency sourcing without requiring lengthy internal approvals. The organisations that navigated the 2024 disruptions most effectively were those with documented response frameworks already in place.

McKinsey's research found that 39% of companies facing tariff impacts responded with dual-sourcing strategies, and 33% accelerated nearshoring plans — but critically, these were organisations that had already been building resilience infrastructure. Those starting from scratch when disruption hit found themselves responding too slowly and at higher cost. The lesson for procurement teams is that contingency sourcing arrangements must be established and maintained during periods of relative stability, not negotiated under pressure.

Digital tools for rapid procurement response

The third pillar of procurement resilience is technological, and the pace of development in this space has been considerable. The conversation among CPOs has moved well beyond general claims about digitalisation. The tools now in active deployment — AI-powered control towers, digital twins, predictive analytics platforms — are producing measurable outcomes in disruption response times and sourcing decision quality.

Digital twins, which create virtual models of supply chain networks, allow procurement and operations teams to simulate disruption scenarios and test responses before committing resources. Gartner data suggests digital twins can improve operational efficiency by up to 10%, while Deloitte has reported potential cost savings of up to 30% through their application to supply network decisions. Separately, generative AI is being used to run thousands of what-if simulations, enabling teams to stress-test their supply chains against scenarios that would previously have taken weeks to model manually.

AI-powered control towers represent another meaningful shift. Rather than presenting static dashboards, these platforms integrate data from procurement, logistics and external sources — weather patterns, port congestion, geopolitical signals — to surface disruption risks before they materialise. BCG reported that agentic AI systems accounted for 17% of total AI value in supply chains in 2025, a figure projected to reach 29% by 2028. The Hackett Group's 2025 Key Issues Study found that 64% of procurement leaders expect AI and generative AI to fundamentally change their roles within five years.

Investment in these tools is accelerating, though it is not uniform. Two-thirds of companies are investing in advanced planning systems, according to recent industry data. Those that are not risk falling behind in both speed and analytical depth. The procurement function of 2026 increasingly requires professionals who can interpret complex analytics and translate them into sourcing decisions at pace — a capability that depends on both the right tools and the organisational readiness to use them.

Resilience in procurement is not built in a single transformation programme. It is the cumulative result of deliberate supplier strategy, disciplined scenario planning and sustained investment in digital capability. The volatility that has characterised supply chains since 2020 shows no sign of abating — and the organisations that treat resilience as an ongoing operational commitment, rather than a project to be completed, are the ones best placed to manage whatever comes next.

​​​​​​​This article is brought to you in association with Amazon Business.

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