New Research Underscores Need for Agile and Proactive Supply Chains, Yet Fewer Than 10% of Companies Have Achieved “Near-Full” Automation of Key Supply Chain Functions

March 26, 2025 at 09:00 AM EDT

Research from Inspectorio’s “State of Supply Chain Report 2025” reveals the key issues, on top of tariffs, that are driving a shift toward supply chain digitization

Inspectorio, the leading global supply chain solution provider for sourcing, sustainability, compliance, and quality, today announced findings of its second annual “State of Supply Chain Report 2025,” which explores the current inflection points facing brands, retailers and suppliers today.

The report, available now for download, reveals a landscape defined by tariff unpredictability, consumer-driven sustainability expectations, and escalating compliance mandates amid added complexity from rapid digital transformation. Drawing on survey responses and expert interviews across industries, the report highlights a need for supply chains that are resilient to external shocks and aligned with the evolving values of consumers, regulators, and investors.

Tariff uncertainties are top of mind for retailers and brands today. However, the report highlights a number of other key issues facing the industry.

Compliance is complex: 85% say meeting sustainability standards is more difficult

The report suggests that global supply chains have entered a phase of accelerated disruption that challenges traditional operations. Escalating compliance demands add to the sense of urgency, with more than 75% of organizations increasing compliance budgets to handle a global patchwork of regulations that many leaders find both fragmented and resource-intensive. 85% of respondents say meeting new sustainability standards has grown markedly more difficult.

A consumer-driven shift: 75% recognize sustainability as key purchase driver

Amid increasing regulatory pressure, the report also found over 75% of respondents recognize sustainability as a key purchase driver. However, less than 10% think consumers are willing to pay a premium for eco-friendly options, highlighting that consumers today expect sustainability without wanting to pay a premium for it.

Meanwhile, more than 60% of supplier respondents report that retailers “partially or fully” push compliance and environmental upgrade expenses back onto them. For mid-tier suppliers that absorb the cost of sustainability upgrades, this baseline expectation for sustainability forces them to balance remaining cost-competitive or risk losing high-volume contracts.

The digital imperative: less than 10% of companies have reached near-full supply chain automation

Early adopters of AI-driven analytics, automated compliance checks, and real-time risk modeling report notable gains in forecasting accuracy and lower head times. However, barriers remain, as fewer than 10% of surveyed companies have reached near-full automation of key supply chain functions, and over 45% remain below the 25% digitization mark.

Bridging the gap: 70% report cultural resistance and unclear ROI metrics as roadblocks to digital adoption

Pilot successes in AI-based compliance or container forecasting can help overcome skepticism, but only if they scale into an integrated digital roadmap that aligns procurement, quality, and ESG objectives under a shared digital framework. Additionally, 14% of companies report having no formal digitization roadmap at all, citing competing budget priorities or a lack of digital expertise.

“To manage accelerating regulations on forced labor, heightened sustainability mandates, and geopolitical fluctuations, brands and suppliers must move quickly to improve their supply chain agility and resilience,” said Chirag Patel, CEO, Inspectorio. “This year’s report reveals that a multifaceted approach – one that unifies compliance and risk management with strategic sourcing, digital innovations, and measurable ESG commitments – is critical to success both now and in the future.”

To learn more and access the full report, visit www.inspectorio.com/state-of-supply-chain-report-2025.

Survey Methodology

Inspectorio surveyed 269 professionals throughout the supply chain industry, including experts, professors, on-the-field personnel, executives and workers to ensure a diverse set of perspectives. The distribution of respondents by industry is as follows: Apparel & Footwear (39%), Home & Furniture (15%), Food & Beverage (13%), Multi-Category Retail (4%), Outdoor & Sports (3%). The breakdown of respondents by region is as follows: Asia Pacific (44%), North America (17%), Europe (17%), South America (3%), Africa (2%), Middle East (1%), and Other (15%).

About Inspectorio

Inspectorio is the leading AI-powered supply chain platform optimizing performance, building resilience, and providing intelligence across production chains for global brands, retailers, and their multi-tier suppliers.

Our innovative platform seamlessly connects and digitizes supply chain processes to optimize decision-making, while providing real-time visibility and control over production chain operations.