Supply Chains, 2026: Less Globalization, More AI

Can AI Help Alleviate Supply Chain Disruptions?

Supply chains are intricate networks that span the globe, but their complexity also makes them vulnerable to disruptions. From economic instability and extreme weather events to energy shortages, tariffs, cyberattacks, and conflicts, the risks to supply chains are numerous and ever-present. As companies seek to mitigate these risks, many are turning to artificial intelligence (AI) as a potential solution. By leveraging AI, businesses hope to create more resilient and responsive supply chains that can adapt to the challenges of a rapidly changing world.

A recent survey of 1,800 global executives conducted by Prologis and The Harris Poll reveals a significant shift towards localized production. A majority of respondents (58%) predict that supply chains will become more localized by 2030, with only 31% expecting continued globalization. This shift reflects a fundamental change in business strategy, from prioritizing cost optimization to focusing on risk mitigation. As the report’s authors note, “proximity and control outweigh traditional cost advantages” in a post-globalization era, where strategic planning must balance higher operational costs with reduced risk exposure and improved operational reliability.

Drivers of Localized Supply Chains

The survey found that more than three-quarters of companies have already implemented or are actively building regional networks, particularly around consumption centers. The primary drivers of these decisions are energy reliability (40%) and labor costs (36%). By dispersing their operations and establishing regional networks, companies can reduce their exposure to risks associated with fragile global networks. However, risks will always be present, and executives must prioritize strategies to mitigate them.

The top risks facing supply chains in 2026 include economic volatility (55%), tariff increases and trade barriers (48%), geographic instability (38%), and cybersecurity threats (38%). To address these challenges, executives are increasingly turning to AI as a key component of their risk mitigation strategies. Seven in 10 executives report that they are well advanced in applying AI to their supply chains, with a focus on quality control, inspection, and risk identification.

The Role of AI in Supply Chain Management

AI is poised to play a critical role in supply chain management, with 75% of companies citing it as a top capital investment priority for 2026. Leaders who have invested in AI report seeing a significant return on investment (77%) within 12 months. Moreover, a majority of these leaders (63%) expect AI to be making decisions across all major functions of their supply chains within the next five years. The survey’s findings suggest that the supply chain industry has crossed the AI adoption threshold, positioning it at the forefront of AI commercialization.

As AI becomes increasingly integral to supply chain management, companies that fail to adopt AI-driven decision-making risk competitive obsolescence. The top investment priorities for supply chains in 2026 include AI (75%), supplier investments and relationships (38%), automation and robotics (37%), energy efficiency (36%), and talent development and workforce scaling (31%). By investing in these areas and leveraging AI, companies can create more resilient, responsive, and adaptive supply chains that are better equipped to navigate the complexities of a rapidly changing world.