The year ahead is expected to be largely unpredictable for supply chains as more economic uncertainty, geopolitical conflicts, and the sweeping changes set to be implemented during President-elect Donald Trump’s second term in the White House take hold.
In terms of vendor management, it seems as though businesses can barely catch a break in a decade that’s been heavily punctuated by the COVID-19 pandemic and market volatility throughout recent years.
The resounding US Presidential election win for Donald Trump has brought to light fresh implications for international vendors as the prospect of 20% international tariffs on trade and a concerning 60% tariff on China are set to create a resounding impact on global supply chains.
While a collection of more than 50 economists surveyed by Reuters suggested that a median estimate of 38% on tariffs both inside and outside mainland China is more likely than the full 60% pledged, the President-elect is likely to ring in the changes soon after taking office in early 2025.
For businesses seeking to optimize their vendor management over the year ahead, it’s likely that most firms will focus their efforts towards out-innovating the challenges that are set to punctuate 2025. Fortunately, the emergence of artificial intelligence and automation tools can help to mitigate the problems of tomorrow today. Let’s take a deeper look at some of the innovations that are set to improve global vendor management over the next year and beyond:
The year ahead will see more widespread adoption of automated vendor onboarding tools. This can help to pave the way for businesses to maintain closer relationships with suppliers, a benefit that could nurture more efficient supply chains during periods of geopolitical uncertainty over the months ahead.
The process utilizes software to simplify and accelerate the steps required to bring a new vendor into an organization’s network. For instance, if a company needs a vendor quickly to overcome unforeseen inefficiencies among existing suppliers, automation tools can speed up processes that would traditionally involve many emails, paperwork, and manual compliance checks at scale.
Automated onboarding systems can handle vendor details, contracts, and compliance documents digitally, with the tools capable of vetting prospective vendors and curating applicable options for procurement managers.
The software can also add a new level of transparency and visibility to the onboarding status of vendors to ensure that supply chains remain robust and well-supervised.
The challenges facing vendor management in 2025 will also see more businesses seek to adopt more personalized analytics and reporting tools for stronger actionable insights.
With the prospect of trade becoming more expensive, and uncertainty threatening existing supply chains, possessing the ability to sift through masses of structured and unstructured data with the help of artificial intelligence will help more decision-makers refine their budgets and optimize their cash flow.
With the help of automation tools to allow vendors to view payment histories, invoices, and financial trends, more businesses can undertake strategic planning within dedicated portals to improve the efficiency of vendor management.
These tailored insights could even work with businesses and their vendors to optimize the vendor payouts process. Should currency exchanges incur too many inefficiencies and conversion costs, automation technology can recommend payouts in a low-cost currency. If agreed by vendors, it’s even possible to leverage crypto payouts if the associated transaction costs are more competitive.
The necessity of AI-powered vendor management is set to increase in 2025 owing to the unpredictability of trade relations on an international scale.
We can expect a higher emphasis on diversification across the supply chain for businesses impacted by the President-elect, Donald Trump’s expected imposition of tariffs on international trade.
With the prospect of tariffs as high as 60% impacting trade with China, access to a diversified pool of vendors is essential for the sustainability of some endeavors.
Artificial intelligence tools can build a more holistic picture for your vendors, creating bespoke profiles focusing on identification, collection, aggregation, and presentation of the vendor profile based on performance and market data.
These tools can also aggregate vendors based on efficiency, cost, and risk and compile them into bespoke scorecards to aid the curation process.
With firms like Traeger already seeking to add more manufacturing capacity in Vietnam in response to the prospect of higher tariffs in China, along with many other businesses dependent on cost-effective supply chains, we can expect more vendor management processes to take the curation process into deeper consideration.
There will be new challenges throughout the vendor management landscape in 2025, but with an adaptable outlook and a commitment to use innovation to continue optimizing supply chains beyond the unpredictability of the months ahead, businesses can turn hurdles into opportunities to outperform competitors.
The future for supply chains in 2025 is uncertain, but automation and AI can help to pave the way for a year ahead that’s full of potential for vendors and clients alike.