Each year KPMG Ireland review the global KPMG Supply Chain Stability Index, in association with the Association of Supply Chain Management index and consider what actions Irish business can take to minimise impacts to their business operations, and wider supply chains.
2025 presents Irish businesses with many challenges that can disrupt their supply chains. From geopolitical tensions to natural disasters, the need for improved operational performance and robust supply chains has never been more critical.
Since the beginning of 2025, there has been uncertainty as to the impact of global tariffs. Ireland’s open economy makes Irish businesses particularly exposed to international fluctuations.
There is immediate groundwork all Irish enterprises can do to improve operational performance and strengthen weakened supply chains. This will ease more significant changes to their supply chains in the coming months and years, which we will continue to provide insights across tax, strategy, operations and economics as a firm.
Key strategies and actions Irish businesses should consider today:
Entering a period of uncertainty, it is critical that Irish businesses are trading efficiently. During rapid expansion organisations endure lower margin revenue lines and develop additional costs as a buffer to enable growth.
Irish businesses should examine revenue lines, their profitability and margin enhancing opportunities, making decisions on poor performing revenue lines evaluate their overall cost base, including indirect costs. Improving operational efficiency, understanding market losses, and scaling successful offerings are key strategies.
Performing this analysis upfront ensures Irish businesses can approach their external supply chain related challenges in a more reasoned manner, balancing organisational efficiency and external commercially focused negotiations.
Regardless of global conditions, it has long been a logical, risk adverse strategy for Irish businesses to diversify their supplier base across different geographical regions, with a particular focus on where end customers are. Tariffs often apply not only to end products, but also components – so it makes sense to orientate your entire supply chain near a customer base.
Equally, it is becoming increasingly important to have multiple geographically spread suppliers companies ensuring a steady flow of materials and components, even if one supplier faces challenges, be they internal (operational, financial or legal) or external (geopolitical or climate change related).
In cases of sole sourcing, building a strong relationship with suppliers (as discussed later) is critical.
Advanced technologies such as artificial intelligence (AI), machine learning, and blockchain can significantly improve operational efficiency, particularly in manufacturing settings. AI and machine learning can not only aid production line efficiency, but can also help predict potential disruptions by analysing vast amounts of data, allowing companies to take proactive measures.
Blockchain technology such as that offered by ubloquity, a Northern Irish company, enhances transparency and traceability, ensuring that all transactions are secure and verifiable, particularly important with the ongoing increase in export related paperwork. Investing in these technologies can lead to more efficient and resilient operations and offer greater visibility to increasingly brittle supply chains.
Industry and government bodies such as Irish Manufacturing Research can also provide valuable support in adopting these technologies.
Combilift, a Monaghan based global exporter of lifting and handling equipment, uses advanced robotics and AI-driven systems to optimise production lines, ensuring high precision and quality in their equipment.
This investment in technology not only boosts their operational robustness but also allows them to offer innovative solutions to their customers.
Maintaining strong relationships with suppliers and partners is crucial. Companies should foster open communication and collaboration, ensuring that all parties are aligned, not just on where they interact (or “nodal points), but also ensuring absolute efficiency in internal operations which avoids unnecessary administration or rework. Regularly reviewing contractual performance and operational KPIs can help address any potential issues before they escalate.
Strong relationships also facilitate quicker responses to disruptions, as suppliers are more likely to prioritise “favoured, good customers”. While tempting to set prices with suppliers now, Irish businesses should carefully balance market pricing on commodities with hedging, especially for materials or components with limited global diversity of supply.
Test these strategies with a limited supplier and customer pool and accurately model impacts on your wider organisation.
While not top of every executive’s agenda, effective risk management is proving increasingly important in day-to-day supply chain management. Companies should conduct regular operational risk assessments and supply chain due diligence exercises, such as those offered by KPMG, or relevant industry associations such as CIPS, to understand vulnerabilities within their supply chains.
Contingency planning is equally important; having backup plans in place ensures that companies can quickly adapt to unforeseen circumstances. This includes having alternative transportation routes (and providers), potential call-off agreements with backup suppliers (depending on criticality of goods/components), and emergency response protocols. These should be reviewed regularly and tested as a paper exercise at least once every three months (or more frequently if a significant risk, or market conditions change).
Confidential Client*, an Irish haulage company, implements a comprehensive Business Continuity Plan (BCP) to ensure operational resilience. They conduct regular drills and simulations to test their response strategies, review and update their BCP periodically, and perform internal audits to maintain compliance.
This proactive approach not only enhances their ability to handle disruptions but also ensures they can continue providing reliable logistic services to their customers.
*Client details kept confidential due to the nature of subject matter.
Incorporating sustainability into operations and supply chain management not only benefits the environment but also enhances resilience. Sustainable practices such as reducing waste, optimising resource use and circularity of materials leads ultimately drives a transformation in operational efficiency, driving more robust manufacturing operations and mitigating some external cost pressures associated with using new materials.
Industry associations and specialised consultancies, including KPMG Sustainable Futures, can provide valuable guidance in integrating sustainability practices, while bodies including Irish Manufacturing Research can assist in developing sustainable, and circular manufacturing processes.
The Irish Government offers significant supports to aid businesses in becoming more sustainable, with a concerted focus on circularity, key resources include Circuléire, Climate Toolkit 4 Business and the EPA’s Circular Economy Programme. Equally the Northern Irish government is exploring the topic too.
Supply chain and operational robustness is not a one-time effort; it requires continuous improvement. Companies should regularly review and update their supply chain and operational strategies, incorporating lessons learned from past disruptions.
Depending on organisational preference this may follow a Lean or Kaizen methodology, externally driven, or may be as simple as an ideas box with an agreed review meeting.
Staying informed about industry trends and emerging risks allows companies to adapt and evolve their supply chains to meet new challenges.
Five-step action plan for business leaders
To ensure your supply chain is robust and resilient, consider the following five-step action plan:
Conduct a comprehensive risk assessment
- Identify potential vulnerabilities in your supply chain and existing operations.
- Understand your underlying cost base, the impact of squeezed margins on each revenue line and key account.
- Understand the risks associated with your suppliers, transportation routes, and geopolitical factors.
Diversify your supplier base
Avoid dependency on a single supplier or region. Establish relationships with multiple suppliers across different geographical areas to mitigate risks. As appropriate, work with suppliers to eliminate waste within their operations too. Working with trade associations or partnering with peers can help access new markets.
Invest in advanced technologies
Leverage AI, machine learning, and blockchain to enhance supply chain visibility, predict disruptions, and improve overall operational efficiency. Industry bodies, government agencies and our automation teams can help.
Foster strong supplier relationships
Build and maintain strong relationships with your suppliers. Open communication and collaboration can lead to quicker responses during disruptions. Moving from transactional to long-term strategic procurement is a key step in this process, as highlighted by CIPS UK.
Implement sustainability to reduce supply risks
Integrate sustainability into your supply chain and operational strategy. Focus on reducing waste, optimising resource use, and developing a resilient circular supply chain. Industry associations as well as specialised consultancies including KPMG Sustainable Futures can help.
By following this action plan, Irish business leaders can create supply chains that are not only robust and resilient but also capable of adapting to the ever-changing global landscape. A resilient supply chain ensures business continuity and enhances competitiveness in the global market.
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