Supply Chains Are Shifting. Here’s How Companies Can Be ‘Future Ready.’

In early 2025, the Trump administration’s sweeping tariff plan on all imported goods upended traditional supply chains and accelerated efforts to reshore production. What had once been an aspiration, rebuilding supply chains rooted in free trade, quickly became an imperative for many organizations.

But rethinking and, in many cases, reversing longstanding logistics practices is no easy task; indeed, it can seem impossible. And, according to University of Virginia Darden School of Business professors Doug Thomas and Vidya Mani, the complicated issues at the heart of the latest supply chain tumult won’t get any easier.  

Thomas and Mani, who are experts in operations, believe we have now entered a window in which organizations can expect greater changes in global supply chains than at any time in the past 30 years. 

The rapidly shifting terrain can lead to decision paralysis; but forward-thinking organizations are moving ahead despite the uncertainty and ambiguity. The Darden professors’ research suggests organizations can remain future-ready by fully understanding the factors driving the supply chain changes and, once the landscape is deeply understood, committing to key elements in organizational transformation.  

The Four Key Factors Driving Supply Chain Change 

While tariffs and shifts in global economic policy attract outsized attention in the current supply chain discussion, trade is just one of the four key factors that make the current moment more dynamic than at any time in the past 30 years. Also driving shifts: consumer and investor preferences, emerging technology and building resilience.  

Before making strategic decisions or revamping an organization for the future, leaders must be aware of the forces buffeting their industries:  

Economic Policy 

Economic policies are created by countries that protect their national interests and reflect the relative bargaining power in the global supply chain. These include trade agreements, import/export controls, subsidies, sanctions, etc. These policies are unprecedented in their scale, scope and intricate details, with complex rules related to products, components, and manufacturing and labor practices. While specific tariff pressures are still in flux, it is clear we have entered a new era of uncertainty, with highly detailed policies that will continue to lead to a tactical reshaping of supply chains. 

Consumer and Investor Preferences 

There is an increase in consumer concern for fair trade and ethical sourcing, which can be seen in purchasing decisions when the economy is considered strong, while affordability concerns dominate during inflationary and recessionary periods. Evolving consumer preferences and continued capital flows into environmental, social and governance, or ESG, funds suggest transparency in supply chains and sourcing will continue to be a major factor. 

Emerging Technology 

Increased automation and the advent of advances such as artificial intelligence, blockchain and 3-D printing, are lessening the importance of inexpensive labor and potentially making it more economical to manufacture closer to points of consumption. Also, the ability to capture more data than ever has a range of implications for potential enhancement. 

The Push to Instill Resilience 

Resilience has long been a popular and elusive goal for those working in supply chains. Shocks to the system are routinely deemed to be a “wake-up call” that will lead to diversified, resilient supply chains, only for organizations to fall back on the familiar. Given the unprecedented shifts taking place in the preceding three factors, true resilience has never been more urgent, and the organizations that will succeed increasingly understand that resilience is a strategy, not a contingency. 

Recommendations for Future-Ready Organizations 

Once fully conversant in the forces buffeting global supply chains, leaders can turn toward ensuring long-term competitiveness. According to Thomas and Mani, future-ready organizations interested in leading on supply chains should commit to the following four principles: 

1. Commit Your Organization to Operational Excellence: Every organization aspires to peak operational performance, but how is that defined? Are leaders laser-focused on operational excellence, or is the door open to inertia? Perhaps more importantly, how is operational excellence measured? Organizations prepared for rapidly shifting production terrain create key performance indicators and organizational structures with end-to-end views.  

2. Elevate Talent and Develop a Learning Mindset: Business fundamentals still apply, and that means retaining and promoting good people. Organizations with the desire to lead must prioritize talent development, and end-to-end coordination must be ensured through roles and structures. There are likely opportunities to use AI to automate simple tasks, opening new windows for the best employees. While processes and roles are formalized, they are not rigid, and resilient organizations have learned to inculcate a mindset that encourages an ethos of experimentation and even risk-taking. Instilling this mindset allows a team to find opportunities and solve messy problems, particularly around segmentation and end-to-end analysis. 

3. Replace Assumptions with Data and Use AI: New technologies and data capabilities have opened pathways for enterprising organizations. Data-driven inventory planning has changed many previously standardized practices; organizations embracing data capabilities have new opportunities to set safety stock levels, and can use bootstrapping techniques — essentially resampling from historical data — to anticipate complex demand patterns. Organizations embracing these techniques are gaining supply chain flexibility and accuracy not available to many of their peers.

4. Invest in Scenario Planning and Stress Test Supply Chains: What if, instead of waiting for the next manufacturing crisis, organizations effectively stress-tested their supply chains to ensure readiness? While large financial institutions must show evidence of adequate liquidity and ability to manage through a crisis, no such imperative exists for supply chains. In the absence of industry-wide measures intended to protect vulnerable supply chains, savvy organizations can consider their sourcing capabilities through a heightened strategic lens, working through the needs of today while anticipating challenges of tomorrow. With awareness of vulnerabilities and chokepoints, the stress-testing may ultimately lead some toward significant revamping; other organizations may proceed with a clearer map of the road ahead. 

The road ahead is not necessarily clear, but organizations taking the time to learn how to act strategically in the new landscape have a map, and do not let ambiguity lead to paralysis.  

While the challenges are immense, they are not insurmountable, and solutions are available for those willing to put in the time and effort to learn the landscape and make strategic and sustainable sourcing, production and distribution decisions across the supply chain.