As we move through 2026, some major developments will shape supply chains, and they're really a continuation of existing trends: geopolitical instability and the need to be agile. But the consequences of these mean organizations need to rethink how they approach supply chain risk management.
Here are the five trends that will define the year ahead.
1. Geopolitical instability continues
If you've been waiting for geopolitics to settle down, it's time to adjust expectations. New issues will likely come up that we're not even thinking about yet, but there are obvious places to focus. Will tensions continue to increase with China? What will happen with the war in Ukraine?
Takeaway: We can’t plan for the predictable world that once existed. So, periodically review risk across your entire supply chain, not just the areas where there have been issues before.
2. A premium on agility
The consequences that come out of continued geopolitical instability include an increased pressure on agility, not just nearshoring or regionalization (though those are two big developments we'll see). Above all that, there will be a premium on agility: the ability to quickly change or shift your supply chain based on whatever geopolitical event happens.
This will prove easier in industries like apparel and consumer products and far more challenging in electronics, especially semiconductors.
Takeaway: Organizations need to think about what agility means to their supply chains. Which parts can quickly shift, and which are more cemented in place?
3. New sourcing destinations
The “China Plus One” strategy that began in 2015 has evolved into an all-out diversification imperative. Tariffs have accelerated the shift from cost-based to risk-based sourcing decisions, and organizations are looking at a range of new locations, each with distinct advantages and challenges. These include:
- Vietnam: Well-developed supply chain infrastructure makes it a top choice for immediate diversification.
- India: Growing capacity with less mature infrastructure but significant potential.
- Mexico: Proximity to the US is attractive but requires sophisticated risk management strategies due to higher day-to-day volatility.
- East and West Africa: Longer-term prospects (five to ten years out) with large workforces but minimal infrastructure currently.
Takeaway: Each location brings unique risk profiles. What worked in China won't necessarily work elsewhere, and you may be exposing your organization to new risks.
4. Deeper supplier relationships
For industries like semiconductors and electronics where relocating is difficult (or impossible), the goal is to deepen relationships instead. Building stronger, more effective supplier relationships will help offset the costs of geopolitical volatility.
This requires a better understanding of suppliers' current practices, capacity-building initiatives, and tighter communication loops for rapid adaptation. It means collaborative problem-solving, like asking, “Can we change product composition due to tariffs on raw material X?” The hands-off approach of treating supplier challenges as “their problem to handle” simply doesn't work anymore.
Takeaway: View your suppliers as strategic partners, not interchangeable vendors.
5. AI enablement over experimentation
After years of “blue sky” AI thinking, 2026 marks the shift to concrete, practical applications.
Whether you're sourcing from new locations or deepening existing supplier relationships, you'll be drowning in data. AI and machine learning help separate signal from noise.The data comes from everywhere: internal Extended Producer Responsibility (ERP) systems, external risk and threat intelligence, supplier information on part numbers and composition, and multiple data providers.
To succeed with AI, you need to be specific about what you want to achieve and understand how AI integrates with partner relationships. Clean data on the front end is essential as is structuring your ecosystem properly.
Takeaway: You, your suppliers, and your data providers all need to be aligned.
These five trends are connected. Geopolitical instability drives the need for agility, which requires either new sourcing locations or deeper supplier relationships, both of which generate massive amounts of data that AI helps manage effectively. The organizations that thrive in 2026 will be those that see these connections and build integrated strategies rather than treating each trend as a separate initiative.
Learn more about managing risk in your downstream supply chain.
