As globalisation accelerates, technological innovation surges and the world continues to shift politically and economically, procurement professionals face a growing list of challenges. While we can’t eliminate every risk, awareness and preparation remain critical. Frameworks such as SWOT, STEEPLED, and TEMPLES help assess and respond to these evolving pressures. Here are some of the current challenges in procurement and supply chains in 2025:
Geopolitical Instability
Political unrest, trade wars and shifting alliances can wreak havoc on supply chains. . In April 2025 the key factor in geopolitical instability is the American Government with their aim to become a self-sufficient nation and their policy to put high levels of income tariffs on items coming into their country. Procurement professionals must plan for pricing volatility and demand fluctuations linked to geopolitical change.
Rising Costs and Inflation
Increased costs of raw materials, transportation and labour, coupled with inflation, can erode profit margins and make it difficult to maintain supply chain competitiveness. As procurement professionals we have to ensure we are looking to drive down cost (not just price) at all opportunities to achieve value and strive for competitive advantage.
Cybersecurity Risks
Supply chains are increasingly vulnerable to cyberattacks, which can disrupt operations, compromise data, and lead to financial losses. Working cross functionally with the IT department to ensure processes and protection are in place throughout the supply chain will help to mitigate against these potentially debilitating acts of cyber crime.
Environmental Concerns
Growing pressure to reduce carbon emissions and environmental impact requires procurement and supply chain professionals to source materials and products sustainably. We should be aiming to work with suppliers that are ethical and practice good ESG. Procuring single use items should be something we are looking to phase out in place of recyclability, reusability and developing a circular economy.
Ethical Sourcing
Ensuring fair labour practices, human rights, and responsible sourcing practices throughout the supply chain is becoming increasingly important. Consumers are now looking for goods and services whereby the supply chain is transparent – strong due diligence and supplier evaluation (Carter’s 10 Cs) will aid in keeping the supply chain ethical.
AI and Automation
Integrating AI and automation into procurement and supply chain processes can improve efficiency, reduce costs, and enhance decision-making, but requires the addressing of skills gaps and ensuring data security. AI and automation is moving forward rapidly so it is imperative that procurement teams are upskilled to allow us take advantage of it.
Evolving Customer Expectations
Customers are increasingly demanding faster delivery times, greater transparency, and personalised experiences, requiring supply chains to adapt and become more agile. An agile approach will help to meet these customer expectations but at what affect? An organisation that prides itself on a LEAN approach will find it difficult to adapt and change yet this is what consumers want.
The points here are but a few that we have to consider in the world of procurement and supply but demonstrate that the profession never stands still and to be cost effective has to be constantly aware of the changes demands and react to them in the most suitable way for the business.
This blog was written by Katie Jarvis-Grove, Procurement Trainer at Oxford College of Procurement and Supply. Explore our CIPS qualifications and take the next step towards becoming a more strategic, informed and agile professional.