The Procurement & Supply Chain Topics Reaching the Boardroom

Supply chains have transformed from a mere operational detail to the epicentre of corporate strategy today.

Innovations in AI-driven processes and shifting trade policies are pushing businesses to evolve swiftly to uphold their resilience and performance.

Recent analysis from the supply chain intelligence platform Zero100 – based on analysis of almost 1,000 earnings calls from 265 companies, as well as other data sets – sheds light on the primary procurement and supply chain issues directing global commerce, logistics and corporate survival come 2025.

According to the study, CEOs are currently grappling with four broad supply chain-related pressures.

Global trade dynamics

Tariff concerns in the boardroom

The focus on tariffs in corporate earnings calls rocketed from 2% to 20% in 2024, yet 87% of these discussions were notably neutral. This trend indicates a growing awareness of international trade developments among companies, although it hasn't reached a stage of widespread panic yet. There's a clear uplift in strategy among firms aiming to navigate through trade tensions between major economies such as the US and China, the unfolding digital trade regulations by the EU and the ongoing trade disruptions brought about by Brexit. The stability seen today contrasts starkly with the tariff upheavals experienced between 2018 and 2019.

The role of lobbying in navigating tariffs

During the first presidency of Donald Trump, only 14.6% of applications for tariff exemptions were successful. Businesses that participated actively in lobbying observed a 2.15 percentage point increase in their approval rates—a 35% increment. With fluctuating trade policies anticipated ahead of the 2024 US election, investing in lobbying could turn into a strategic move for companies looking to dodge hefty tariff costs. Those that shy away from political engagement could face financial burdens.

Technological advancements in supply chain

AI integration surpassing expectations

About 8.5% of companies now utilise AI agents within their supply chain operations, with searches for “AI agents” on the internet witnessing a twelvefold increase annually. From Tesla's self-tuning logistics to Amazon's robotic warehouse operations, AI is swiftly moving from a supportive technology to a core decision-maker in industries like manufacturing, retail and logistics.

Efficiency the driver of AI adoption

Just 5% of AI applications are solely dedicated to cost reduction, whereas 32% focus on boosting efficiency—highlighting a shift in corporate strategy toward sustainable productivity growth. Instead of cutting jobs, companies are leveraging AI to enhance workforce effectiveness. Unilever exemplifies this approach by incorporating AI into supply chain planning without reducing its workforce.

AI-powered procurement transformation

Walmart has introduced AI negotiation bots that concurrently manage negotiations with 2,000 suppliers, significantly saving time and cutting costs by 3%. Rather than confining AI to backend tasks, it’s taking a front seat in direct supplier interactions.

Data management: The Achilles' heel of AI

Despite AI's growing prominence, only 46% of organisations have onboarded dedicated data managers for their supply chains. The efficiency of AI hinges on the quality of data it operates with. Many organisations still handle piecemeal and incomplete datasets, which compromises the power of automated technologies. Enterprises willing to dive into AI need to bolster their data management efforts first to fully leverage AI's capabilities.

Financial stresses and flexible operations

The predominance of cost concerns

Earnings calls over the past three years have consistently highlighted cost issues, with 97% mentioning them. Market rivalry and direct supply chain expenses continue to be significant challenges. Despite a stabilisation in inflation rates, elevated supply chain expenses are still impacting profitability. Strategies must now not only address cost management but also ensure customer retention.

Adoption of agile practices

With a noticeable shift towards agile methodologies, companies like Nike, H&M and Deckers are spearheading this change. Approximately 89% of firms are now emphasising agility in their supply chain staffing strategies, a movement reflecting the necessity for tech-centric and data-driven capabilities for faster, more adaptable operations.

Summarising the insights, Lauren Acoba, VP of Research at Zero100, notes: "Supply chains are no longer just a cost centre – they’ve become a battleground for competitive advantage, where navigating geopolitical fault lines and harnessing AI-driven transformation can define a company’s bottom line and brand position.

"Businesses that adapt will gain resilience, efficiency and market leadership; those that don’t risk disruption, rising costs and eroding trust.”

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