Year in Review: Supply Chain 2025

As we cross the last days of 2025 off the calendar, now is a good time to reflect on the past year in supply chain.

We do this in the context of three major themes that defined supply chain performance in 2025 and will shape the agenda for 2026 and beyond.

At the beginning of 2025, most supply chain leaders sensed that the incoming U.S. administration would return to the tariff-based policies of their previous term. What no one anticipated was the magnitude and uncertainty around the final levels.

This moved some supply chains into a holding pattern for several months. It also forced many to elevate scenario planning capabilities with AI-based models that could quickly respond to the international trade terms du jour.

An important shift happened behind the scenes:

• Portfolio thinking in sourcing. Instead of chasing the next “China replacement,” leaders treated location as a portfolio risk. Nearshoring to Mexico and Southeast Asia increased, alongside commitments to increase U.S. investment.
• Tariff Engineering 2.0. The winners this year weren’t just companies with diversified networks, but those with the visibility and means to dynamically route components based on total landed cost changes that fluctuated weekly.
• Inventory as a strategic asset. Many companies used targeted, policy-aware buffers near critical customers and in tariff-advantaged locations.

The lesson for 2026: Treat trade policy as a dynamic input into strategy, not a temporary exception to work around.

If 2023 and 2024 were the years of experimentation, 2025 was the year that AI started to impact the P&L. Its value proposition is no longer just efficiency and speed, but also "explainability" and smarter decision making.

Across the supply chain community, we saw a clear migration from isolated pilots to broadly embedded capabilities, including:

• Decision co-pilots for planners. GenAI is increasingly wrapped around classic optimization engines, summarizing scenarios, highlighting risks and explaining trade-offs in natural language.
• Predictive and autonomous logistics. AI-driven demand sensing, dynamic routing and predictive ETA models moved from “nice to have” to table stakes.
• Smarter supplier collaboration. Large language models are now being used to normalize supplier terms, interpret contracts, draft corrective-action plans and surface early-warning signals from unstructured data.

More broadly, organizations are extracting value when they approach AI as an operating model change versus a technology implementation.

The lesson for 2026: AI is no longer an optional experiment. It is rapidly being incorporated into supply chain processes as a differentiating layer atop enterprise systems.

Perhaps the most profound and least understood development in 2025 was the impact of AI on supply chain talent. For leaders, the implication is stark.

They need to self-fund the significant organizational upskilling and change management tied to new AI-embedded workflows and role designs. In real terms, this has meant layoffs predicated on anticipated productivity gains and broad scale education programs for remaining employees.

Three patterns stand out:

• Talent as a top supply chain risk. The gap between AI “haves” and “have-nots” is widening. Companies that cannot offer modern tools, data access and clear AI-enhanced career paths will struggle to attract and retain high-end talent.
• Upskilling is a prerequisite for unlocking AI value. This includes understanding model limitations, prompt engineering and the ability to interpret AI-driven insights.
• A crisis of unbalanced capability. We are shrinking the bottom rung of the career ladder, where entry-level employees used to cut their teeth, and replacing those positions with algorithms. New development programs and career paths will be required to create the senior leaders and strategists of 2030 and beyond.

The lesson for 2026: Your talent strategy is now inseparable from your AI strategy.

This is the final Beyond Supply Chain blog of 2025. Thank you for your readership and leadership in this dynamic environment. We wish you all a happy and healthy holiday season!

Stan Aronow
Distinguished VP Advisor
Gartner Supply Chain
Stan.Aronow@gartner.com

Wade McDaniel
Distinguished VP Advisor
Gartner Supply Chain
Wade.Mcdaniel@gartner.com