Manufacturing supply chains, 2026 and beyond: turning volatility into long-term resilience

With market volatility now the norm, manufacturers are rethinking supply chains from the ground up. That means embracing regionalisation, digital tools and strategic collaboration to stay resilient in an increasingly complex global landscape. Andy Reid, Head of Product Marketing for ERP at Sage, speaks to The Manufacturer.

We often hear manufacturers say that the only constant within the sector right now is change. And with uncertainty and disruption impacting current trends across geopolitical conflicts, energy costs, tariffs and supply chains, this perception has never resonated more for manufacturers than it does right now.

The term does suggest a certain circulatory: trends are situations that manifest, travel through a certain cycle and then disperse. However, Andy said the status of the trends we’re currently experiencing in the sector have an air of permanency about them.

He has a point. Are we really looking at the high cost of energy as a temporary tempest that we simply have to weather, until we see the sight of more sunlit uplands? Or are we more inclined to simply accept our high energy costs as a consequence of living in the modern world?

“The floor has been raised in terms of the expectations around costs,” Andy said. “Rising energy prices, the variability in the economic environment, and the higher costs for labour, insurance and transportation that have come about as a result, are all starting from a higher base point than ever before.

“Our customers, and manufacturers in general, are much more aware of that, and they now have to spend more time, effort and resources into building businesses that can handle it.”

We feel a heavy responsibility – particularly within the UK as our home market – to support business growth and the people who work in those businesses. And, as we bring new technologies to market, we’re very focused on providing solutions and support for all our customers in a way that they can trust.

We’re always introducing technology that we genuinely believe is going to help our customers grow, in a way that is responsible, ethical and removes obstacles so everyone can thrive.
Andy Reid, Head of Product Marketing for ERP at Sage

There are a variety of ways in which manufacturers are doing this, whether it be through resilience, optimisation, visibility or a combination of all three. But whatever the plan of attack, there does seem to be an acceptance that these extra costs and disruptions are all part and parcel or being a manufacturer in 2026.

Of course, doubt and uncertainty have presided over manufacturing for quite some time and VUCA is a term we’re all familiar with by now. However, the recent eruption of conflict in Iran has seen huge pressures emerge on the demand side as well.

For example, a 25% increase in the cost of products such as polyester and fertiliser are impacting the apparel and food manufacturing sectors respectively, while all businesses are experiencing huge increases in packaging costs. And let’s not forget, while prices can and do rise quickly, it inevitably takes time for them to come back down – if they do at all.

Baking resilience into manufacturing supply chains

To counter the current climate and to safeguard themselves, Andy explained that many Sage customers are changing the way they resource materials and supplies. Not only are they looking at the current landscape through a more local lens, they’re also spreading the net to avoid creating single points of failure. “Where customers in the past may have been buying low-cost products from a single source, they’re now looking at multiple locations, and are diversifying their avenues of supply.”

However, while reshoring, nearshoring and friendshoring are undoubted trends across manufacturing supply chains, Andy was quick to point out the importance of existing partnerships. He highlighted that many Sage customers are doubling down on the trusted relationships that already exist in order to strengthen their positions. Not only that but the nature of these partnerships is becoming far more strategic to ensure all parties support each other, keep costs down and retain trust.

Andy said: “There’s certainly some tension in the sector as manufacturers put in the effort to make sure they have diversified supply chains, while at the same time are creating strong strategic relationships with existing partners.”

Having spoken about the hardships around uncertainty and constant change within the sector, this piece of the puzzle is easier than ever. Far greater levels of disintermediation across the supply chain mean that businesses can work together more seamlessly.

Andy added: “It may have been tempting in the past to conveniently bucket businesses into the ones that make, the ones that move, the ones that sell, etc. However, the reality is very different. There are distribution organisations that incorporate elements of assembly manufacturing, for example, and there is a closeness where our customers are merging the work they do together to increase resilience across the supply chain.”

The simple fact is that if a manufacturer knows its business, it can react faster. And fundamentally, that knowledge depends on the data at the heart of the organisation. Agility starts with the solid foundation of data visibility – and that has to be the priority for any manufacturer.

The role of data visibility in improving supply chain resilience

Data, of course, has a key role to play here. And the utopian view is that if a business is furnished with all the necessary information, there is no problem that data can’t solve. The optimal scenario is a single source of data (or truth), which offers one trusted view of an organisation.

This provides complete visibility across the business so if any changes occur, there’s an understanding around the impact that has on the cost, delivery time and quality of what’s being produced. This single view of the truth also means that data analytics become very powerful and can enable manufacturers to run what-if scenarios and models that plan for the future.

“The issue is that many manufacturers, particularly SMEs, don’t have the time or resources to spend on what-if scenarios and finance modelling,” Andy added. “They might do it a few times a year at best.”

However, help is at hand and this is where AI can play a key role. With the right tools in place, manufacturers can start operating in a more agented way.

“If you can get to that utopian view, manufacturers can achieve a level of automation where they need less humans in the loop, which means that the people within the business are freed up to create strategy around how to grow the business,” Andy added.

It’s worth pointing out that, as software vendors, Sage wants to believe that every business is driving for growth. However, as Andy added, the reality is that the current conversations being had with some customers is more around survival. “In the current climate, with this raising cost floor and demand pressures, often staying flat represents success.”

When discussing the deployment of AI, there is also a very important five letter word: ‘trust’. Cynicism still exists, primarily due to the fact that, in the grand scheme of things, AI is still in its infancy, particularly when discussing the technology in a manufacturing context.

“In reality, AI is a newborn baby but as a business, we recognise the level of trust that hundreds of thousands of organisations across the country put in us already. So as we introduce AI, we’re doing so from a glass box perspective as opposed to a black box. Our customers need to be able to see what’s inside and trust that the information it’s giving is accurate.”

A truly resilient, future-ready supply chain in practice

Resilient supply chains depend on complete visibility across all the players involved. And the way to bring down costs overall is through partnerships, the exchange of information and manufacturers working with distributors and retailers – creating a flow of information that takes away the cost of silos or restrictive views.

Any basic economic theory will state that perfect information is the most efficient market. Although manufacturing is closer to this goal than ever before, it’s still some way off. Manufacturers are still awash with data around people, product and finance, and not much of that is currently shared up and down the supply chain.

The answer to truly resilient supply chains in the future is going to be a much freer flow of information throughout. That can’t be achieved without control and in order to share and collaborate, a business will need to have that visibility of what’s within the business.

“We feel a heavy responsibility – particularly within the UK as our home market – to support business growth and the people who work in those businesses,” added Andy. “And, as we bring new technologies to market, we’re very focused on providing solutions and support for all our customers in a way that they can trust.

“We’re always introducing technology that we genuinely believe is going to help our customers grow, in a way that is responsible, ethical and removes obstacles so everyone can thrive.”

In a manufacturing landscape, where disruption is no longer temporary but structural, resilience has become a core business imperative rather than a strategic option. As costs rise and uncertainty persists, manufacturers need to adapt their supply chains through stronger partnerships and diversification – all fuelled by greater data visibility.

Those that can harness trusted data, embrace digital tools such as AI and collaborate more openly across the supply chain will be best positioned not just to survive but to build sustainable, future-ready operations in an increasingly complex world.