New Year, New Priorities for Supply Chains

Each year, the American Productivity & Quality Center (APQC) carries out a survey to ask supply chain professionals about their organizations’ key priorities and focus areas for the coming year. This year—and for the first time since 2019—we found that supply chain planning is no longer the top area of focus for surveyed organizations.

This does not mean that supply chain planning no longer matters—it’s still the third-most important overall area of focus. However, respondents told us that they will be focusing even more on sourcing and procurement as well as logistics and inventory management in 2025.APQC

In this article, we highlight findings from our priorities research about these key areas and provide a preview of where leading supply chain organizations will be focusing and investing resources for 2025.

Sourcing and Procurement

Supply chain professionals told us that their top priorities for sourcing and procurement include relationship building with strategic suppliers and digitizing and automating procurement.

Organizations are Seeking Deeper Relationships with Key Suppliers

Supplier relationship management (SRM) is once again the top priority area within sourcing and procurement, just as it was in 2024. In fact, even more organizations selected SRM as their top priority this year (50% in 2025 versus 32% in 2024). Disruptions during the COVID-19 pandemic taught many organizations that their success is closely tied to the success of their suppliers, and numerous ongoing disruptions after the pandemic have only cemented the importance of effective SRM.

Historically, SRM provided a set of processes and practices to help buyers ensure that third-party suppliers complied with contractual terms, service levels, and performance objectives. The picture has become more nuanced in recent years, however. SRM’s focus is now increasingly on building and sustaining collaborative, mutually beneficial relationships between buyers and their most strategic suppliers.

Strong supplier relationships and the collaboration that comes from them enable organizations to continually innovate and react more quickly to disruption when it occurs. These benefits, in turn, can also enable more effective risk mitigation (the second top priority within sourcing and procurement). For that reason, it makes sense to find that “improving key supplier relationships” is the top strategy for sourcing and procurement this year (52% of respondents).

Digitizing and Automating Procurement is a High Priority in 2025

Automation and digitization is another key theme for sourcing and procurement and is the third-highest priority for this area in 2025. The push toward greater automation and digitization not only speaks to a desire for lower costs and greater efficiency, but also to the need for deeper supply chain visibility through advanced analytics and other technologies.

The strategies that respondents plan to carry out for procurement in 2025 will help support the push toward greater digital transformation. For example, about half of respondents (46%) said their organizations are working to standardize processes—an important first step for applying and using technology effectively. And in some cases, organizations are circling back to redefining their processes when that step was originally missed or incomplete prior to automation. About another third (35%) told us they are implementing new technologies and capabilities for procurement, which will support their digital transformations.

Logistics and Inventory Management

Logistics and inventory management is the second highest overall area of focus for 2025. Compared to last year, supply chain visibility has become an even greater priority within this area (61% of respondents in 2025 versus 47% in 2024). Visibility ensures transparency from the sourcing of raw materials to the delivery of finished products and is crucial for managing extended and outsourced supply chains effectively.

From supply shortages to natural disasters, geopolitical conflict, labor disputes, and more, supply chain disruptions showed no signs of becoming more predictable in 2024. Organizations that can achieve deep visibility across their supply chains (including second- and third-tier suppliers) are able to identify unexpected bottlenecks and react more swiftly to disruptions when they occur (even ideally, predict them beforehand). These benefits help organizations to optimize inventory management (the second top priority in this area) while also supporting important priorities like risk mitigation and SRM. 

Nearly two-thirds of surveyed organizations report that they are focused on inventory optimization to pursue these priorities (62%), while almost half are planning to standardize processes (48%) and implement methods to reduce transportation costs (46%) in 2025.

Key Takeaways

“Uncertainty” was a keyword for supply chains in 2024—and 2025 may be just as unpredictable. To manage risk and build resilience for the coming year, many supply chain organizations will be working to:

»       Strengthen core areas like sourcing and procurement as well as logistics and inventory management

»        Deepen relationships with their most strategic suppliers

»        Increase visibility across the supply chain

»        Optimize and standardize foundational processes to better support digitization, automation, and deeper visibility

It’s encouraging to see that around half of respondents are working to standardize the processes that digital technologies support. Technology can’t fix broken processes and workflows—process improvement and standardization should be top strategies for any supply chain organization in 2025.