New challenges and opportunities demand a new way of thinking about supply chains. Efficiency is still a vital goal, but resilience and sustainability are more important than ever in the current environment of unprecedented volatility, while fast-changing artificial intelligence (AI) tools are opening new possibilities.

This anthology from SAP Insights brings together articles that delve into these developing dynamics, offering strategies and insights to help organizations stay ahead in the face of uncertainty.

Key lessons include:

• Reshoring and nearshoring can improve efficiency—but require careful consideration of switching costs, volatile trade agreements, and more.
• Scenario modeling and planning are ever more vital for increasing supply chain hardiness and flexibility.
• Leading companies demonstrate it, and research confirms it: Sustainability yields increased profitability. Think beyond carbon emissions to get the full returns.
• Staying ahead of supply chain theft requires a refined mix of visibility, analytics, and partnerships, plus cybersecurity measures to boot.
• Generative AI is refining operations already, and agentic AI promises even more flexible, intelligent process automation.

Read on for more about durability, sustainability, loss prevention, flexibility through supplier diversity, and much more.

Increase supply chain resilience

Resilience is core to supply chain planning and management. To avoid shortages and disruptions, organizations are embedding a broader variety of contingency plans and more accurate forecasting data into their processes.

Calculate nearshoring costs carefully. Observers have long recognized that companies can respond more quickly to customer needs by shifting some aspects of their global supply chain closer to those markets. Now, companies are rethinking the balance of global vs. local and lean vs. flexible to better prepare for unexpected risks. However, the calculus of nearshoring is complex, including factors like switching costs, digital integration, and supply chain segmentation—determining which products or components truly benefit from being produced closer.

Explore the potential benefits of local partners in “For resilient supply chains, think local.”

Understand the decision factors in “Evaluating nearshoring? Here are five realities.”

Model everything (repeatedly). In case you’ve missed it: Traditional supply chain planning, with its reliance on historical data, is out. While companies successfully weathered previous supply chain disruptions (a tsunami in Japan, flooding in Thailand, a volcanic eruption in Iceland), those breakdowns were localized, temporary, and ultimately fixable. Longer-lasting global supply chain hits, such as climate change, pandemics, and wars can affect demand in more fundamental ways, and require a different demand planning approach—one that is rooted in current realities and uses more flexible and iterative predictive modeling. Iterative modeling will be more vital than ever as volatility and uncertainty continue to increase.

Find new strategies in “The new era of demand planning.”

Change metrics as well as methods. The disruptions of the COVID-19 pandemic may seem almost quaint, given the variety of chaotic changes that have arisen since then. But the pandemic changed our understanding of high risks in lean, cost-focused supply chain models—with automakers serving as a leading example. As a result, companies are implementing five key shifts: focusing on total cost over just production cost, looking beyond tier-one suppliers for risk management, sourcing more locally to increase resilience, using real-time data instead of historical data for planning, and expanding distribution options beyond traditional pallet-load methods.

Learn more in “5 supply chain truths for a post-COVID-19 world.”

Up your loss prevention game... In response to rising cargo theft, organizations are implementing four main strategies to boost security and head off the scourge of supply chain crime. First, they’re expanding risk assessments to include more supply chain partners, ensuring vulnerabilities are addressed collaboratively. Second, companies are prioritizing education for both employees and partners, emphasizing pragmatic measures and ethical practices to prevent insider threats. Third, they’re gathering more intelligence not only on the location of goods but also on criminal patterns, using data to identify high-risk areas and times. Finally, businesses are enhancing cybersecurity measures, protecting sensitive information to prevent criminals from exploiting delivery schedules and access points.

Discover more in “What to do about supply chain crime.”

…and your climate contingency planning. In 2022, Europe faced its worst drought in 500 years, causing the Danube and Rhine rivers to drop to critically low levels and interrupting supply chains reliant on these waterways. This calamity pushed companies to rethink maritime and inland water transport logistics. Researchers suggest companies create contingency plans, such as diversifying transport modes and investing in supply chain visibility, to anticipate similar issues. This shift involves planning for seasonal low water levels, optimizing transport loads, and including sustainability considerations.

Find more strategies in “What to do when the river doesn’t flow.”

Do better with product recalls. Product recalls place a unique type of strain on supply chains and your relationships with partners (not to mention your customers). Strategies like real-time data collection, smart sourcing, proactive communication, and dedicated recall management teams can help companies act swiftly and responsibly. Practicing “mock recalls” allows organizations to refine their response plans, ensuring they’re better prepared for potential issues. By handling recalls transparently, companies can protect their reputation, maintain consumer trust, and ultimately turn challenging moments into opportunities for stronger customer relationships.

Get the rundown in “On the path to better product recalls.”

Sustainability, circularity, and profitability

Less wasted material and transport means less wasted money—that’s common sense. However, with multiple studies from SAP, Bain, and others finding sustainability strongly correlated to overall profitability, there’s little excuse for foot-dragging. Indeed, some companies have shifted beyond sustainability—reducing negative effects on the environment—to “regeneration,” in which materials and operations go beyond mere carbon neutrality to positive effects, helping strengthen and heal natural ecosystems. It’s undeniably a huge challenge in the supply chain context, with its focus on movement rather than the creation of goods. Here are practical strategies in action.

Reduce scope two and scope three emissions. By tracking emissions not only from their own operations but also from suppliers and energy providers, companies such as General Motors are working toward decarbonization across their entire value chains. New tools and frameworks help businesses gather the data necessary to manage emissions effectively, allowing them to meet sustainability targets and enhance flexibility. In this way, companies can move beyond regulatory compliance and contribute to a more sustainable global economy.

Discover more emissions-busting tactics.

Apply technologies to make logistics more sustainable. Delivery and logistics are obvious paths to implement green measures. A mix of technologies used in combination—solar panels on refrigerated trucks, paperless warehouses, real-time data, and routing software to minimize fuel consumption on delivery routes—can make this element of the supply chain less carbon-intensive.

Take a deep dive in “Sustainable logistics on the move.”

Create once, use many times. Like the manufacturers that are pursuing service-first business models, several companies are taking the idea of reusing as much as possible, including in their supply chain operations, to reduce waste and make the best use of raw materials and assets. Circular business models lead to profits that are sustainable in the long term.

See how leading companies do this in “Circular economy: The path to sustainable profitability.”

Explore new regenerative materials. By replacing traditional materials like plastics and concrete with biodegradable and renewable alternatives, such as bio-based "hempcrete" and self-repairing “living” materials, businesses in industries ranging from automotive and aerospace to construction and textiles can create products that nourish the environment instead of depleting it. From construction to fashion, new materials like cellulose insulation, carbon-capturing fabrics, and algae-based packaging hold promise for supply chains that not only meet current demands but also regenerate natural resources, paving the way for “net positive” business of the future in which materials improve the planet rather than harm it.

Find examples of reversing the overuse of materials.

See how regenerative practices build toward a circular economy.

Build the factory of the future. Using nature as a model, manufacturers like Interface are exploring processes that not only reduce emissions and recycle resources but also sequester carbon and purify local water sources. Explore ideas from digital twins and low-waste 3D printing to blue roofs and renewable energy sources like green hydrogen.

Learn how factories can be forces for sustainability and regeneration.

Find business value in “waste.” Rethinking the worth of everything, from underused and excess assets to materials discarded as waste, can lead to sustainable innovations—this practice is called capacity capture. Examples include a brewery that uses spent grain to generate energy for its plant, and a European automaker that reuses old car batteries as energy storage for wind or solar power.

Discover new ways of thinking about waste.

Advanced technology moves supply chains forward

Advanced technologies are helping to make supply chains more efficient and adaptable. With tools like machine learning, artificial intelligence (including generative AI), Internet of Things (IoT) sensors, and cloud-based data sharing, companies can track goods in real time, anticipate disruptions, and manage inventory with precision.

Improve planning with GenAI. Generative AI (GenAI) holds massive potential for supply chain management, helping companies make sense of complex data for better planning and durability. Initially, GenAI chatbots allow planners to quickly retrieve information, replacing the need for complex dashboards. As the technology matures and agentic AI takes off, observers expect agents to serve as a bridge between existing AI models and human decision makers, helping people make sense of complex insights and giving pointers on how to optimize supply chain operations.

See GenAI’s promise for supply chain planners.

Focus innovation efforts on partnerships. The tech project was promising, but the results were underwhelming—heard that story before? Many companies struggle to see returns on their tech investments. SAP’s Richard Howell hosts a panel discussion on why trust, collaboration, and data sharing between partners make all the difference. Companies that focus on breaking down silos and building partnerships are the ones seeing the best results.

Read more in “Supply chain innovation: What’s next.”

Use digital twins to find efficiencies. Digital twins—virtual replicas of physical objects—can identify ways to improve how a factory process works or when it’s time to fix a machine before it breaks down. Digitally enabling supply chains holds the potential for creating more efficient, adaptable, and sustainable trade. A digital twin can be used to spot and solve many “what-if” scenarios, facilitating better decision-making.

Learn how digital twins improve analytics.

Explore eight real-world examples, from factories to municipal water systems to wind farms.

Staffing and skills for complex supply chains

Modern supply chains require a wide range of technical, analytical, and interpersonal skills—everything from data analytics to project management to cross-boundary collaboration.

Start by upskilling production logistics workers. As the movement of goods within factories becomes more automated, workers will need new skills to manage this increasingly digital environment. Traditional roles on the shop floor are changing, with production planners, line leaders, and machine operators now expected to use predictive analytics, monitor intelligent dashboards, and oversee connected systems. Workers who can adapt quickly, solve complex problems, and integrate technical skills with creativity and business acumen will keep the goods flowing.

Explore modern factory skill sets in “Advanced manufacturing skills workers will need.”

Learn four strategies for recruiting in a competitive talent pool.

Build your supply chain skills base, too. Four essential moves to attract and upskill the supply chain professionals of tomorrow: Define new role descriptions and career paths to support growing needs. Align training programs with emerging technologies—AI in particular—to help current employees keep pace. Rebrand supply chain roles as tech-driven opportunities to appeal to a broader talent pool. Finally, flexible work options are more feasible in supply chain planning than in factory work; use that fact to expand your recruiting options.

Dig into the supply chain talent playbook.

Reconsider your value proposition

Map your value chain. Wardley maps are a tool for understanding value chains by visualizing the relationship between suppliers, consumers, and the components needed to meet user needs. Unlike traditional supply chain charts, Wardley maps capture spatial relationships and change over time, illustrating the dynamic markets today’s businesses operate in. As creator Simon Wardley tells SAP Insights, they also provide a great basis for challenging assumptions and spotting where future value will lie.

Learn more in “A landscape view into value chain relationships.”

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