Business-as-usual or ongoing disruption? Steady growth or economic slowdown?

With rapid technological advancements and changing geopolitical landscapes, procurement professionals can expect to adapt to new challenges and opportunities in 2025.

Let’s examine the crystal ball and predict some major trends shaping the near future of procurement.

Technology Trends on the Rise

Accelerating AI Adoption

AI and its smooth-talking cousin, GenAI, are together becoming a cornerstone of procurement strategies. We can expect AI to be increasingly integrated into various stages of the procurement process. From predictive analytics that forecast demand to smart algorithms that help negotiate better deals, AI will continue to streamline operations and enhance decision-making. 

According to Airbase, the top uses for AI in procurement are:

  • Market intelligence gathering and analysis (77%).
  • Automated data entry and processing (74%).
  • Predictive analytics (57%).
  • Inventory and supply chain logistics optimization (53%).
  • Supplier risk management (52%).
  • Contract analysis and management (42%).
  • Automated supplier selection and negotiation processes (36%).

One trend we can expect to witness (or not witness) is the “disappearance” of AI. As the technology becomes routine, it will become increasingly integrated as a back-end co-pilot that works invisibly in the architecture. 

Enhanced Supply Chain Visibility

Expect further advancements in technology that provide real-time insights into supply chain operations. This visibility will stem from a combination of fast-proliferating IoT devices, blockchain technology, and advanced analytics.

IoT proliferation allows companies to track goods from the moment they leave the manufacturer to when they reach the consumer. This not only helps in managing inventory but also in identifying potential issues before they escalate. However, organizations have a very long way to go in this respect.

A GEODIS supply chain survey revealed that only 6% of companies have achieved “full” supply chain visibility, despite this being a priority. 

Growing Adoption of Traceability

Traceability is becoming increasingly important, particularly in industries where ethical sourcing is critical. It won’t happen immediately, but the end goal here is to one day ensure every step of the supply chain is transparent. This means consumers can trace the origins of products; a game-changer for brands aiming to build trust.

According to recent research:

  • 94% of consumers are more likely to be loyal to a brand that offers complete supply-chain transparency 
  • 39% say they’re willing to switch to a more transparent brand 
  • Consumers will pay 2% to 10% more for products from companies that provide greater supply chain transparency. 

For procurement teams, this means that sourcing decisions will be increasingly influenced by traceability data. The ability to verify the ethical and environmental impact of suppliers will not only help meet regulatory requirements but also enhance brand reputation.

Skills for the Future

Over the next 12 months, data literacy will become increasingly paramount. Procurement teams must be able to analyze and interpret data to make informed decisions swiftly. This includes understanding analytics tools and being comfortable with data-driven insights.

Additionally, as AI continues to play a significant role, skills like prompt engineering will become increasingly valuable. However, it’s not just about technical skills; human skills will remain crucial. Strong negotiation abilities, emotional intelligence, and relationship-building will be essential at every level of procurement. 

Geopolitical Factors

Economic Slowdown

Looking ahead, the economic outlook for the U.S. suggests a slowdown in growth for 2025 compared to this year. According to the latest report from the OECD, the U.S. economy is projected to taper off to 1.6% in 2025; a downward adjustment from the OECD's earlier forecast of 1.8% growth.

However, the anticipated slowdown is expected to be cushioned by an easing of monetary policy. Interest rates are tipped to decline by an additional 1.5 percentage points by the end of 2025, which could provide some relief for consumers and businesses alike. 

Continued Instability

Continued tension and escalating tariffs with China, will continue to reshape U.S. trade and global supply chains. Geopolitical instability and conflicts in Ukraine, the Middle East may or may not come to a head when a new president takes the reins in January. As always, supply chains remain vulnerable at strategic choke-points including the Red Sea and Panama. 

Procurement teams must remain agile, ready to pivot strategies in response to any sudden shifts in the geopolitical climate. This may involve diversifying suppliers or securing alternative sourcing strategies to mitigate risks and secure strategic supplies such as semiconductors and critical minerals. 

The Rise of India

India is projected to overtake Germany and Japan to become the world’s third-largest economy by 2028. Keep a close eye on India as a potential source for goods and services, particularly as it offers a vast talent pool and competitive manufacturing capabilities.

Reshoring and Nearshoring

In response to the disruptions and federal policy, reshoring and nearshoring will continue to be significant procurement trends. Companies are increasingly bringing manufacturing closer to home, particularly to Mexico. This move not only reduces lead times but also mitigates risks associated with long-distance supply chains.

In 2025, expect to see more businesses re-evaluating their sourcing strategies, focusing on local suppliers and regional partnerships. This shift will create a more resilient supply chain, better equipped to handle future disruptions.

Conclusion

The procurement landscape in 2025 is set to be dynamic, shaped by technological advancements and geopolitical changes. Embracing AI, enhancing supply chain visibility, and focusing on traceability will be critical for success. Stay informed, stay agile, and seize every opportunity thrown your way in the year ahead.

Looking for a true partner in procurement to help you navigate certain procurement trends? The team at Una is ready to help. Contact us to learn more.