60% of firms revamping supply chains amid trade turmoil

A recent study reveals that 60% of companies are overhauling their supply chains in response to increasing tariff uncertainty and market volatility.

The latest State of Supply Chain report from RELEX Solutions and Researchscape indicates a significant shift among businesses towards enhancing resilience, automation, and supplier diversification. These strategic changes aim to address the growing complexities experienced within the trade environment.

The study, which surveyed insights from 579 professionals across the retail, consumer packaged goods (CPG), and wholesale sectors in seven countries, highlights the challenges faced by companies amid global trade unpredictability and economic instability. Issues such as erratic consumer demand, escalating trade tensions, and unreliable supplier networks are becoming increasingly prevalent.

According to the findings, 52% of businesses pinpoint demand volatility as their principal concern. This unpredictability is compelling business leaders to consistently rethink their inventory strategies, as consumer spending habits are in flux. Additionally, 47% are troubled by global trade disruptions and tariff escalations, with these factors contributing to higher operational costs and sourcing obstacles.

A lack of access to real-time data and visibility is another significant hurdle, affecting 43% of those surveyed. This issue complicates the adaptability required to manage sudden shifts in demand, labour shortages, and transportation delays.

To tackle these issues, companies are making decisive operational adjustments, with many expanding their supplier networks, sourcing goods closer to home, and boosting investments in automation. Specifically, 62% of retailers are mitigating cost pressures through a mix of efficiency improvements and price adjustments, and 50% are expanding their supplier bases to hedge against economic and geopolitical uncertainties.

Dr. Madhav Durbha, Group Vice President of CPG & Manufacturing at RELEX Solutions, commented on the findings: "Supply chains are in a pressure cooker -- between tariffs, demand shifts, and unpredictable disruptions, the outdated and traditional way of operating isn't sustainable. Companies that lean into AI, automation, and supplier diversification will not only weather this volatility but emerge stronger. The ones that don't risk falling behind."

The report encapsulates a broader industry movement as companies realise that temporary measures are insufficient. Businesses are moving beyond crisis management and are steering efforts towards reinforcing their supply chains against impending economic, regulatory, and geopolitical challenges.

Overall, the RELEX State of Supply Chain 2024: Retail and CPG Dynamics report aims to provide comprehensive insights into these challenges, alongside investment priorities and strategies projected to shape supply chains over the next three to five years. The survey conducted in January 2025 offers an in-depth perspective on global retail, CPG, and wholesale sectors.