What keeps sourcing and supply chain executives up at night? A lot.
From tariffs and global conflicts to talent shortages and political uncertainty, executive leaders face significant challenges as the industry looks ahead to 2027, according to the results of Sourcing Journal’s Executive Sentiment Survey.
Despite the macroeconomic hurdles, most industry executives have a somewhat positive attitude. When asked what their overall business outlook for their supply chain operations is heading into 2027, 46.7 percent said they are cautiously optimistic, while 34.3 percent said they are neutral. Just over 12 percent said they are cautiously pessimistic. And just 6.7 percent said they are “highly optimistic.”
When asked how they expect their total volume of sourced goods to change in 2027 versus this year, 47.6 percent of respondents expect a moderate 1 to 10 percent increase, while 32.4 percent said it will be flat/stable. Of those polled, 11.4 percent expect a significant increase (greater than 10 percent).
This sentiment comes at a time when global sourcing volumes are experiencing a state of resilient restructuring, which is being characterized by high baseline freight and ocean trade volumes, paired with a structural shift toward multi-hub, regionalized networks. According to industry analysts, overall sourcing throughput has hit record levels while diversifying rapidly away from single-source dependencies.
Data from iContainer.com shows record ocean throughput. Global ocean container volumes reached record highs of 192.9 million TEUs this year. High baseline volumes tend to reflect inventory replenishment and front-loading strategies to hedge against tariff shifts as well as sustained consumer demand in key markets. Detours are also having an impact. Rerouting around key trade corridors, such as long-term Cape of Good Hope diversions around the Red Sea, has absorbed excess vessel capacity and even extended transit times, which is prompting buyers to maintain higher volume buffers in their pipelines. And then there are nearshoring initiatives in the works.
When asked about other macroeconomic challenges, respondents weren’t shy in their response. They cited climate change and ongoing environmental issues. Many complained about tariffs and forced labor investigations and EPR. “The ongoing cost of regulations at the state level under EPR [is a challenge],” one respondent wrote. “These are a different kind of tariff/tax that companies will be required to pay to the states. Many of the associated costs have not yet been clearly defined. These too are fees that will pass on to the consumer, ultimately.”
Other top concerns included “chronic talent shortages and labor disputes across manufacturing or logistics.” One executive said it’s in “doing business with the U.S. government; there’s no forecasting or planning, which is disruptive to the supply chain.” The frustrations clearly run deep. When asked to characterize the impact of current geopolitical conditions (e.g., trade tensions, regional conflicts, regulatory shifts) on their supply chain stability, 52.4 percent described it as moderately disruptive, while 34.3 percent said it was extremely disruptive. Just 8.6 percent said it was manageable.
Looking ahead to 2027, the most significant macroeconomic challenges are fluctuations in consumer demand and spending power, with 37.1 percent, and persistent inflationary pressures on raw materials and labor. The responses are interesting because these are issues that are upstream and downstream. Just over 13 percent cited rising energy and transportation costs. When asked about the one thing that “keeps you up at night,” 56.2 percent of those polled said it was escalating trade wars, sudden tariff implementations or sweeping sanctions. Higher operating costs came in with 28.6 percent, while severe climate events or natural disasters shuttering key manufacturing hubs garnered just 2.9 percent—the same percentage of respondents who cited unexpected supplier insolvencies.
When polled about the primary friction points in the supply chain that executives are currently dealing with, inaccurate demand forecasting topped the list at 41.9 percent. It was followed by regulatory and compliance enforcement overhead (e.g., ESG, Digital Product Passports) with 33.3 percent. Overstocks and stockouts came in third with 32.4 percent, while supplier capacity restraints clocked in with 23.8 percent—the same percentage for port congestion and maritime shipping delays. Lack of sub-tier supplier visibility (Tier 2 and beyond) garnered 20 percent, while quality control issues at source factories had 19 percent.
Regarding compliance, Digital Product Passports (DPPs) are set for a mandatory phase-in for apparel and footwear in late 2027. Complete Life Cycle Assessment (LCA) data and carbon/water footprint data across all production stages will be mandatory around 2030. But are supply chain and sourcing leaders prepared?
When asked if to rate their companies’ current readiness to comply with upcoming global sustainability and supply chain transparency regulations, such as EU Corporate Sustainability Due Diligence Directive and DPPs, 38.1 percent of those polled said they were moderately prepared with systems that are being built out. Nearly 30 percent said they rate readiness at neutral and said they understand the landscape, but “face implementation hurdles.” Just over 18 percent of those polled said they were fully prepared and already compliant.
Amid these challenges, many leaders are considering shifting their manufacturing footprints. Over 37 percent of those polled said they are moderately shifting and/or diversifying their locations. When asked what the most critical factor is driving their new sourcing destination, total landed cost optimization such as labor, duties and freight topped the list with 43.5 percent.
Regarding which countries they are increasing sourcing allocations to, the top ones confirmed what reporters and editors at Sourcing Journal have been hearing in the market. Vietnam topped the list at 29.5 percent and was followed by India (28.6 percent), Bangladesh (20 percent), China (19 percent) and Indonesia (14.3 percent). The U.S. had 13.3 percent, which was the same percentage at those respondents who said they were not increasing sourcing allocations.
When it comes to technology, especially AI, one would think, based on all the headlines, that investments and deployment would be intense. But that’s not the case, according to the responses.
When asked about the current maturity level with agentic and generative AI in their business, 52.4 percent said they are experimenting and running small-scale pilot programs. And 26.7 percent said, “AI is currently not a priority for our supply chain strategy.” Nineteen percent said they have moved past pilots and are now scaling the AI tools across their business.
Regarding the areas of their supply chain that technology, including AI, analytics and automation, would deliver the highest ROI by 2027, 54.5 percent said it would be in demand forecasting and inventory management. Nearly 43 percent of respondents said it would be in end-to-end logistics tracking and real-time visibility. And when asked where they plan to allocate most of their capital expenditure in the next year or so, 41 percent said it would be in upgrading their core enterprise technology. More than 40 percent said it would be in deploying advanced analytics, AI and machine learning platforms. And 40 percent said it would be in sustainability initiatives (such as circular design, green logistics and renewable energy).
What the survey ultimately reveals, is that supply chain and sourcing executives navigating toward 2027 are balancing cautious optimism with intense operational pressure. They are prioritizing resilience amid geopolitical volatility, regulatory demands and volatile consumer demand.
To manage trade policy shifts and rising compliance burdens such as DPPs and demand forecasting friction, industry leaders are hedging risk through regionalized multi-hub sourcing—favoring growth in markets like Vietnam and India. And they are pursuing total landed cost optimization.
While wide-scale agentic AI adoption remains in its experimental phase for most of the executives polled, strategic capital is clearly shifting toward core enterprise upgrades and advanced analytics, as well as sustainability initiatives.
All of which suggest that long-term competitive advantage will rely on building agile, transparent and technology-backed supply networks.
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