What: Global supply chain system faces fundamental transformation as executives acknowledge traditional 'just-in-time' model no longer works in post-globalisation era marked by multiple disruptions.

Why it is important: This transformation highlights how retailers must evolve from cost-focused supply chains to more sophisticated systems that balance multiple competing priorities in an uncertain world.

The retail industry is confronting a fundamental shift in supply chain management as executives recognise that systems built for the globalisation era no longer function effectively. The traditional "just-in-time" approach, which thrived on making products in lowest-cost locations and predictable shipping, has been undermined by multiple disruptions including COVID-19, semiconductor shortages, inflation, extreme weather, and geopolitical tensions. In response, companies are reallocating capital from debt repayments and dividends to supply chain and technology investments, with nearly 40% of executives anticipating double-digit percentage increases in product input costs due to tariffs. Most companies are pursuing diversification of supply chains, supplier base expansion, and manufacturing hub relocation while considering price increases. However, the challenge extends beyond immediate tariff mitigation, as modern supply chains must balance resilience, sustainability, traceability, and circularity with cost-effectiveness, requiring strategic trade-offs and new capabilities.

IADS Notes: The fundamental transformation of retail supply chains reflects broader industry challenges and responses. According to Forbes' January 2025 analysis , retailers are moving beyond traditional operational frameworks, with successful AI implementations showing significant improvements in application development speed and administrative efficiency. Alix Partners' July 2024 report  highlighted how traditional "one-size-fits-all" supply chains are becoming insufficient, requiring segmented product flow strategies to improve inventory turns and reduce costs. McKinsey's April 2025 coverage revealed how retailers are implementing geopolitical nerve centers to coordinate everything from immediate tariff operations to long-term supplier diversification strategies. Forbes' March 2025 analysis showed how retailers are leveraging AI-powered analytics and predictive modeling to pinpoint high-risk SKUs and proactively adjust strategies, with 44% of US imports affected by new tariffs. This comprehensive transformation demonstrates how retailers are abandoning outdated "just-in-time" models in favor of more resilient, sustainable, and responsive supply chain strategies that can better navigate modern challenges.

Beyond tariffs: The supply chain reinvention imperative