Inspectorio on Procurement's Role in Supply Chain Resilience
Global disruption from climate change, geopolitical tensions and shifting regulations are redefining supply chains and uncovering vulnerabilities in globalised sourcing models.
This is causing procurement to become a strategic role centered on risk mitigation and resilience, with procurement teams focusing on ESG compliance, diversifying suppliers and aligning with business goals to handle this disruption.
Bearing this in mind, leading supply chain management technology company, Inspectorio, released its ‘State of Supply Chain Report 2025’, stressing the need for supply chains to enhance their resilience and meet the changing demands of consumers and regulators. It also points to the fact that the supply chain landscape continues to be defined by rising compliance mandates, tariff unpredictability and consumer-led sustainability expectations.
Inspectorio surveyed 269 supply chain professionals across several regions and industries, such as food & beverage, outdoor & sports and apparel & footwear.
Chirag Patel, CEO, Inspectorio, explains: “To manage accelerating regulations on forced labour, heightened sustainability mandates and geopolitical fluctuations, brands and suppliers must move quickly to improve their supply chain agility and resilience.
“This year’s report reveals that a multifaceted approach – one that unifies compliance and risk management with strategic sourcing, digital innovations and measurable ESG commitments – is critical to success both now and in the future.”
Sourcing disruption
Inspectorio highlights how sourcing and procurement continues to be redefined by compliance pressures and changing ESG expectations.
Sourcing strategies are rapidly changing, with 95% of executives citing tariffs as a primary disruptor.
This is resulting in companies moving production from China to Cambodia, Vietnam and nearshoring locations, like Eastern Europe.
Despite the fact that 36% of companies are planning to relocate or already have relocated production, these changes are creating challenges in increased logistics costs and complex compliance requirements in new regions.
40% of organisations are also diversifying suppliers to minimise dependency on high-risk geographies and manage trade tensions. This highlights the fact that sourcing decisions must now consider multi-region risk, such as transparency gaps and infrastructure readiness.
Inspectorio points to the ‘hourglass effect’, where premium and discount brands thrive in the market, whereas mid-tier suppliers struggle.
This indicates that procurement teams must balance compliance, cost and ESG performance, especially in sectors will low consumer price tolerance.
The importance of ESG integration
As consumer and stakeholder expectations begin to demand greater accountability and transparency surrounding sustainability, ESG integration has become essential to enhance resilient and long-term business performance.
Inspectorio points to the fact that procurement teams must meet regulatory expectations surrounding EPR, Scope 3 emissions and forced labour, while ensuring sourcing decisions consider environmental impacts, ethical labour practices and carbon footprints.
75% of companies have increased compliance budgets to handle rising ESG regulation, indicating the strong relationship between compliance risk and procurement.
Businesses will face potential financial, legal and reputational risks, such as market bands and shipment detentions, by failing to integrate ESG into procurement practices.
Not only must ESG integration be backed by verifiable and traceable data, but consumers now expect sustainable products, creating more pressure on procurement to source cost-effective ESG solutions.
Inspectorio stresses the fact that procurement is a key catalyst for ESG strategy. Organisations must collaborate with suppliers, handle ESG criteria and utilise data and technology to enhance environmental impact.
The rise of digital procurement
The State of Supply Chain Report points to the fluctuations in adoption of digital procurement across the industry, with less than 10% of companies having achieved near-full automation across procurement and related supply chain processes.
Inspectorio also highlights the large digital maturity gap, with over 45% of organisations digitised less than 25% of their operations.
Key barriers to digital procurement include unclear ROI on digital investments, cultural resistance from mid-level managers, siloed systems and poor cross-departmental collaboration.
The report showcases that 70% of leaders agree that emerging technologies will have a significant impact, but many still struggle to overcome organisational tensions.
AI integration remains limited, with only 27% of respondents having integrated AI into their procurement or supply chain functions.
Poor data quality from suppliers persists as a significant hurdle to effective digital procurement. Because of this, companies must set clear data protocols across all supplier tiers to maintain real-time insights that enhance automation.
Inspectorio warns that 14% of companies still have no digitalisation roadmap at all, risking falling behind as those companies that embrace technological advancements gain transparency, agility and cost-efficiency.
Procurement’s expanding role
The State of Supply Chain Report 2025 points to the fact that procurement can help to diversify sourcing, navigate tariff fluctuations and manage multi-region supplier risks.
Inspectorio points to the fact that procurement is now involved in collaborating on sustainability innovation, implementing traceability tools and integrating with quality and compliance functions.
Procurement is set to lead on AI integration, data governance and crafting more agile and transparent supply chains as digital adoption grows.
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