A new report from Inspectorio spotlights procurement’s expanding role in building agile, ESG-aligned, and digitally enabled supply chains in response to growing global pressures.
Procurement Takes Center Stage in a Disrupted Supply Chain Landscape
Amid rising climate threats, geopolitical shifts, and new regulatory demands, procurement is no longer a back-office function—it’s a frontline defense. According to Inspectorio’s State of Supply Chain Report 2025, global supply chains are under pressure, and procurement teams are being asked to lead the response.
Surveying 269 supply chain professionals across key industries—from food to apparel—the report highlights the growing complexity of sourcing decisions. Tariff uncertainty is a top concern, with 95% of executives citing it as a disruptor. In response, businesses are shifting production out of China toward alternatives like Vietnam, Cambodia, and Eastern Europe. But such moves bring new logistical costs and compliance hurdles, as firms navigate unfamiliar regulatory landscapes and infrastructure gaps.
Supplier diversification is also gathering pace. Around 40% of organizations are expanding their supplier base to avoid over-reliance on single regions—often balancing competing priorities around cost, risk exposure, and ESG standards. The report calls out the widening ‘hourglass effect’ in the market, where premium and discount brands thrive while mid-tier suppliers face mounting pressure, especially in price-sensitive sectors.
Compliance, ESG, and the Push for Digital Procurement
The message from Inspectorio is clear: procurement must move fast to embed ESG into day-to-day decisions. Companies face growing scrutiny over forced labor, emissions (Scope 3 in particular), and product stewardship regulations such as Extended Producer Responsibility (EPR). Already, 75% of businesses have increased compliance budgets to keep pace with these demands.
But ESG isn’t just about risk—it’s becoming a brand expectation. Consumers now expect sustainable products, regulators want traceable supply chains, and investors are watching. Procurement leaders must navigate this environment using verified data, close supplier collaboration, and increasingly, digital tools.
Yet digital transformation remains elusive for many. Fewer than 10% of companies report near-full automation in procurement, and nearly half have digitized less than a quarter of their processes. Resistance from middle management, siloed systems, and lack of cross-functional alignment continue to hold back progress. Data quality is another roadblock, with poor supplier data limiting the effectiveness of even the most sophisticated platforms.
Still, the direction of travel is clear. As AI adoption slowly rises—currently just 27% of firms have begun integrating it—procurement is expected to lead the way, not follow.
Procurement’s Moment to Lead
The tone of this year’s report is unmistakable: procurement is no longer a supporting act. From navigating tariffs to implementing ESG criteria, from reshoring decisions to digital integration, the scope and stakes of the function have never been greater. Those who still treat procurement as a transactional process are missing a strategic lever for building resilience and competitive advantage.
The gap between leaders and laggards is widening. As some organizations digitize and embed ESG deeply into their sourcing decisions, others remain vulnerable—exposed to regulatory fines, reputational hits, and inefficiencies. Procurement’s evolution into a central driver of supply chain strategy is no longer speculative; it’s already well underway.
