Analyst Insight: As global risks escalate in 2025, business leaders must rethink supply chain governance to ensure resilience. Here are three key principles for building adaptable, sustainable and robust supply chain strategies.

While cost optimization remains important, companies must rethink supply chain governance to create frameworks that ensure long-term resilience and adaptability. 

Strengthening Risk Oversight

A resilient supply chain starts with visibility and accountability. Many companies struggle to track emissions, risks, and gaps in compliance beyond their immediate suppliers. Regulations in the EU and beyond are raising the bar for disclosing Scope 3 emissions in supply chains, and for responsible supply chain management.

Governance structures must emphasize data integrity and supplier accountability, ensuring that businesses actively monitor risks throughout the value chain. This means shifting from voluntary sustainability initiatives to legally enforceable commitments. For example, companies can no longer ignore emissions from upstream suppliers and downstream product use, which collectively represent over 85% of global corporate carbon footprints.

Mitigating Dependency Risks

To reduce exposure to shocks, companies should prioritize multi-sourcing and regionalization. Rather than simply adding more suppliers, a good diversification strategy requires a thorough assessment of “value at risk," a measure to assess potential financial losses, and a way to ensure redundancy without excessive inefficiencies.

A China+1 strategy –– where companies maintain operations in China while expanding to a location such as Vietnam, India, or Mexico –– is one such approach. Similarly, nearshoring and reshoring initiatives can help businesses reduce logistics vulnerabilities and enhance responsiveness to demand fluctuations.

Leveraging AI for Real-Time Resilience

Artificial intelligence (AI)-powered analytics, blockchain-based tracking and predictive modeling are transforming how companies identify risks and respond to disruptions.

Governance structures must integrate real-time data intelligence into supply chain decision-making. Companies that lack transparency beyond their immediate suppliers face heightened risks, as disruptions anywhere in the chain can create cascading failures. Machine learning algorithms can detect anomalies in supplier performance, enabling businesses to mitigate disruptions before they escalate.

Additionally, automated risk dashboards and digital twins, which create virtual simulations of supply chains, allow companies to model the impact of different risk scenarios and develop contingency strategies in advance. Blockchain technology further enhances traceability, ensuring compliance with evolving regulatory requirements and preventing fraud in supplier networks. Companies should in these processes be mindful of data protection laws in different countries.

A Governance-Driven Approach

Companies must redefine governance frameworks to incorporate risk visibility, regulatory compliance and technology-driven decision-making. Boards and senior executives must actively oversee supply chain resilience efforts, ensuring that the organization is not just reacting to disruptions but anticipating them.

With regulatory scrutiny increasing and supply chain disruptions becoming more frequent, companies that prioritize transparency, diversification and digital innovation will be better equipped to navigate the complexities of global trade.