GEP’s Outlook 2025: Procurement & Supply Chain report highlights AI, protectionism, sustainability, and regulatory demands as key forces shaping a challenging year for procurement leaders.
Procurement Faces a Stormy 2025
Procurement leaders should prepare for a turbulent year ahead, as outlined in GEP’s Outlook 2025: Procurement & Supply Chain report. Following years of grappling with inflation, supply chain shocks, and geopolitical conflicts, a relative calm is expected to transition into significant challenges in 2025.
According to John Piatek, Vice President at GEP, the year will be shaped by the convergence of advanced technologies, shifting trade policies, regulatory demands, and sustainability imperatives. He describes the current environment as “the calm before the coming storm.”
Key Predictions for Procurement in 2025
Advanced AI tools will increasingly automate key tasks such as demand forecasting, risk monitoring, and supply chain optimization. Procurement leaders are encouraged to pilot orchestration platforms and invest in robust data governance to scale these technologies effectively. The definition of success in procurement is also expanding beyond cost efficiency to include resilience, sustainability, and compliance. Leaders must develop key performance indicators (KPIs) for flexibility, carbon reduction, and supplier diversity while effectively communicating this broader value to stakeholders.
Regulatory scrutiny will heighten the need for supply chain transparency and accountability. Strengthening supplier audits, adopting environmental, social, and governance (ESG) tracking tools, and integrating compliance considerations into strategic procurement decisions will be critical. Trade tensions and tariff expansions are expected to push procurement teams to adopt nearshoring and friendshoring strategies. Total cost of ownership metrics will need to account for geopolitical and environmental risks while prioritizing the creation of regional supply networks to enhance flexibility.
Rising energy costs and sustainability imperatives will further drive the need for renewable energy investments and the redesign of supply chains to align with ESG commitments. Procurement teams will also face renewed pricing pressures, as inflation and tariffs may elevate costs. Maintaining cost savings as a core focus will remain essential to ensure the success of businesses and stakeholders.
Guiding Procurement Through Uncertainty
The report highlights the critical role of technology, transparency, and adaptability in navigating these challenges. Investments in artificial intelligence, ESG initiatives, and strategic planning to address geopolitical and environmental risks will be instrumental.
While the outlook for 2025 presents considerable hurdles, these challenges also offer opportunities to innovate, build resilience, and solidify procurement’s role as a strategic asset in shaping the future of business.
