RELEX Report: Economic Pressures Force Supply Chain Reality Check - 60% of Companies Investing in AI, But Nearly Half Face Talent Constraints

RELEX’s second annual State of the Supply Chain report reveals widening gap between AI ambitions and execution as inflation drives retailers to private label expansion

ATLANTA--(BUSINESS WIRE)--Companies are aggressively investing in AI across supply chains to counter inflation and trade volatility, but a growing execution gap threatens to derail these efforts, according to the second annual State of Supply Chain 2025: Balancing Inflation, Investment & Innovation report from RELEX Solutions.

While 60% of surveyed companies are prioritizing AI and automation investments, nearly half (44%) can't find the specialized talent needed to implement these technologies. Companies also struggle with budget constraints that limit their ability to scale AI initiatives (43%) as well as poor data quality (39%).

The comprehensive study surveyed 500+ retail, CPG manufacturing, and wholesale professionals across seven countries, revealing how economic headwinds are simultaneously driving technology investment and forcing strategic pivots:

• Inflation is reshaping retail strategies – 31% of retailers are optimizing operations and 31% are adjusting pricing to stay competitive
• Private label expansion has become mainstream – 59% of retailers are growing own-brand portfolios as consumers seek value
• Food and beverage manufacturers face margin pressure – 70% have increased discounting aggressively, while 40% have introduced value-tier products

These findings expand on the early released findings of the report showing 60% of companies fundamentally restructuring their supply chains, with 52% citing demand volatility as their primary challenge and 47% concerned about tariff uncertainty and trade disruptions.

"Today's supply chain leaders face a dual challenge – they must innovate through technology while adapting to economic pressures," said Dr. Madhav Durbha, Group Vice President of Manufacturing Industry Strategy at RELEX Solutions. "The gap between AI's potential and its practical implementation represents both the greatest risk and opportunity in supply chain transformation today."

The report also identifies Generative AI (59%), Predictive AI (43%), and Cloud-native solutions (34%) as the top technology investment priorities, with most companies allocating between 5-20% of their technology budgets to AI-driven solutions despite market volatility.

“As businesses navigate economic volatility and evolving consumer behaviors, the report underscores the importance of flexible supply chain strategies that combine technology investment with operational agility,” said Durbha. “Organizations that can bridge the gap between AI’s potential and practical implementation will gain a competitive edge, while those that lag behind may struggle to keep pace.”

Methodology

The RELEX State of Supply Chain 2025: Balancing Inflation, Investment & Innovation report provides deeper insights into the challenges, investment priorities, and strategies shaping supply chains over the next 3-5 years. The report was conducted by Researchscape, surveying 519 retail, CPG manufacturing, and wholesale leaders globally in January 2025.

For more insights, download the complete report here.

About RELEX

RELEX Solutions provides a unified supply chain and retail planning platform that aligns and optimizes demand, merchandising, supply chain, operations and production planning across the end-to-end value chain. We help retailers, manufacturers, and consumer goods companies like ADUSA, AutoZone, Coles, Dollar Tree and Family Dollar, M&S Food, PetSmart, and The Home Depot drive profitable growth across all sales and distribution channels, leading to higher product availability, increased sales, and improved sustainability. Learn more at: https://www.relexsolutions.com/customers/