How Companies Can Manage Supply Chains During Inflation

Key Takeaways:

• Artificial Intelligence and digital tools are enabling predictive supply chain management and supplier risk management, helping midsize businesses reduce disruptions and improve decision-making.
• Strategic partnerships, especially with 3PL providers, offer scalable logistics solutions that cut costs and enhance service quality.
• Sustainability initiatives, including circular supply chain models, help mitigate climate-related risks and align with evolving consumer and regulatory expectations.
• Proactive risk management is essential for building long-term resilience in a volatile market.

The call for resilient supply chains

As inflation, geopolitical tensions, cybersecurity concerns and consumer expectations continue to evolve, midsize businesses continue to grapple with a turbulent supply chain landscape. In contrast to large enterprises, these companies often lack the cushion of vertical integration or deep inventory reserves, exposing them to an increased risk of disruption and volatility.

The 2025 WTW Global supply chain risk report further illustrates this vulnerability, sharing that only 8% of businesses feel they have full control over their supply chain risks, while 63% report higher-than-expected losses due to disruptions. These statistics underscore the dire need for more resilient supply chain strategies.

In response, many organizations are seeking agile solutions that fuse digital innovation, strategic partnerships and proactive risk management. By implementing innovative strategies like AI-powered forecasting, strategic outsourcing and sustainability-driven supply chain design, midsize firms are transforming their supply chain processes to more effectively navigate uncertainty and build long-term resilience.

Supply chain management operational agility with AI

Recent advancements in artificial intelligence (AI) allow organizations to shift from reactive crisis management to predictive intelligence. From forecasting and tracking inventory levels to predicting potential threats, AI helps organizations to optimize decision-making, reduce operational disruptions and proactively adapt to shifts in the market before they escalate into expensive concerns.

Consulting firm Ernst & Young also discusses the power of AI when it comes to unified data models. Whereas legacy systems often produce fragmented, siloed data, artificial intelligence allows organizations to look at information from multiple sources in real time, all in one place. Improved, real-time visibility to things like weather-related delays at ports and supplier bottlenecks allows organizations to proactively reroute shipments, adjust production schedules, minimize costly disruptions and overall, foster a culture of continuous improvement.

Additionally, AI plays a significant role in addressing persistent labor shortages by automating repetitive, manual tasks such as inventory tracking, order processing and vendor communication. This allows existing team members to focus on higher-value activities and is especially helpful for smaller companies who are already pressed to retain staff and cover costs.

Emy Ruiz, Fifth Third’s head of global transaction banking, shares that "in today’s volatile global landscape, small and medium enterprises must embrace a blend of AI, digital transformation, and financial tools like supply chain finance to stay competitive. These integrated solutions empower smarter decision-making, enhance agility, and lay the groundwork for sustainable growth across international trade operations."

As supply chains become more complex and unpredictable in the current geopolitical and economic environment, integrating artificial intelligence into supply chain management will continue to be a strategic imperative. For midsize businesses especially, AI offers a path to greater resilience, efficiency and adaptability.

Outsourcing logistics through strategic partnerships

When building a resilient supply chain strategy, solutions for outsourcing and warehousing have become increasingly important. Many midsize firms are turning to partnerships with third-party logistics (3PL) providers that allow them to leverage cutting-edge automation, sustainability-focused strategies and more. These strategic alliances help organizations to improve customer service, cut costs and increase and scale efficiency while maintaining control over service quality and customer experience.

The impact of these partnerships is both measurable and meaningful. According to NTT Data’s 2024 Third Party Logistics Study, 89% of shippers reported that 3PL partnerships helped to improve service. Furthermore, 80% saw a reduction in the cost of logistics. These findings emphasize the tangible value of outsourcing logistics, positioning midsize companies to compete more effectively with larger enterprises by leveraging external capabilities without sacrificing control.

To successfully integrate partnerships and other outsourcing solutions into a broader supply chain strategy, organizations must carefully consider cultural alignment, operational transparency and clear performance metrics. To do so, companies can implement strategic frameworks to assess, design and embed logistics transformations.

By approaching outsourcing as a strategic extension of a larger supply chain strategy, middle market businesses can boost their flexibility and resilience. When these partnerships align with broader operational goals, they become powerful resources for confronting an uncertain market.

Supply chain forecasting and planning: building resilience through sustainability

Climate-related disruptions also pose a significant risk to the global supply chain landscape. Flooding, extreme temperatures, wildfires and other recent environmental disasters can have a substantial impact on transportation networks, production timelines and supplier reliability. As regulatory pressures and consumer demand for ethical sourcing increase in tandem, sustainability initiatives are paramount to the overall success of supply chain strategies.

In an effort to both prioritize waste reduction and mitigate the risks associated with resource scarcity and volatile raw material prices, organizations are increasingly adopting circular supply chain models. These efforts allow companies to prioritize the use of recycled resources and keep materials in circulation for longer periods of time through closed loop systems. By implementing this model, organizations are better suited to cut costs, ensure access to materials when resources are scarce, fulfill requirements of new governmental regulations while aligning with growing consumer expectations for environmentally responsible practices.

By embedding sustainability into supply chain strategy, organizations can future-proof their operations, fulfill stakeholder expectations and contribute to a more resilient global economy.

A look ahead

Given the current volatility of the market, risk mitigation strategies will continue to play a vital role in supply chain planning. In addition to proactively implementing innovative resources like AI, strategic partnerships and sustainable infrastructure, midsize businesses can leverage tools like contingent business interruption insurance or supply chain coverage as a financial buffer.

As sourcing becomes more unpredictable, companies may also need to reevaluate their product or service offerings, simplifying portfolios to focus on core items that drive the most value. By combining operational agility with proactive risk management, midsize firms can better position themselves to weather disruption and maintain long term competitiveness.

"Resilience in today’s supply chains demands more than contingency planning, it must be woven into the very fabric of a company’s strategy," says Fifth Third’s Ruiz. "By integrating diversified support channels, advanced analytics, and AI capabilities, businesses can minimize disruptions and build sustainable, future-ready operations. This isn’t just a competitive advantage, it’s a necessity."

Navigating the intricacies of the international and regional financial landscape demands the strategic insight of a trusted partner. With decades of experience and an unwavering commitment to client success, Fifth Third is uniquely positioned to deliver innovative solutions that drive long-term value.

To explore offerings tailored to meet your distinct financial needs, find a relationship manager or visit our global trade and supply chain finance pages.