In 2025 and 2026, Chief Operating Officers (COOs) across Asia find themselves navigating a turbulent global landscape marked by geopolitical tensions, inflationary pressures, and rapid technological change. The overarching strategic imperative for these leaders is clear: enhancing supply chain resilience is no longer a mere risk mitigation exercise but a vital driver of long-term competitiveness.
As outlined by the OECD’s recent Economic Outlook for Asia-Pacific, effective risk management, strategic diversification, and digital transformation stand as pillars underpinning successful supply chain strategies in this era of uncertainty. The OECD further warns that while efforts to bolster supply chains are essential, aggressive reshoring could paradoxically weaken global trade and economic growth, underscoring the need for nuanced regional integration rather than wholesale retrenchment.
Within this context, industry leaders in Southeast Asia are adopting a “War Room” strategy, championed by experts such as Atul Chandna, EY’s Asia-Pacific supply chain leader. Central to this approach is diversification: to reduce vulnerability from overreliance on single countries, many companies are embracing “China+1” models, shifting production and sourcing to Southeast Asian neighbours like Indonesia and Malaysia, while leveraging Singapore’s extensive logistics network as a dual sourcing hub. Initiatives like the Regional Comprehensive Economic Partnership (RCEP) and ASEAN integration facilitate this regional realignment, streamlining trade flows and enabling more agile supplier networks.
Chandna highlights that effective diversification includes sourcing across low-risk jurisdictions, developing multi-route shipping options, and employing digital geopolitical risk dashboards to maintain real-time awareness of global developments. Such visibility beyond first-tier suppliers is critical, given that many supply chain failures originate further down the line. Digital twins—virtual replicas of supply chains capable of simulating and predicting disruptions—are being deployed to provide decision-makers with real-time insights and allow more responsive, data-driven management.
Digital transformation emerges as a cornerstone of modern supply chain resilience. Companies are transitioning from pilot programmes to fully integrated control towers and scalable cloud-native platforms that utilise artificial intelligence and machine learning for demand forecasting, scenario planning, and automated operations. These technological advances are helping firms reduce stockouts, avoid overstocks, and improve operational efficiency through robotic process automation and Internet of Things-enabled warehouse robotics.
Moreover, resilience is increasingly seen not as a cost burden but as a value multiplier, delivering tangible business outcomes. Data reveals that firms investing in resilient supply chains enjoy higher revenue growth, on average 5.2% better, alongside a significant reduction in stockouts. This shift in mindset is crucial for COOs seeking boardroom endorsement of resilience investments, reinforcing its role as a strategic lever rather than just insurance.
Sustainability is another integral dimension. What was once primarily a brand risk or compliance issue is now central to operational strategy, driven by regulatory trends such as the EU’s Carbon Border Adjustment Mechanism (CBAM) and Thailand’s Plastic Waste Action Plan. These frameworks compel companies to adopt extended producer responsibility (EPR) schemes and incentivise the tracking and reduction of Scope 3 emissions through deeper supplier engagement. Supply chain sustainability directly affects cost structures, market access, and corporate reputation, marking it as a board-level priority.
Economic and trade uncertainties further complicate the landscape. US-China tensions, tariff volatility, and regulatory fragmentation pose serious risks to Asian economies deeply entwined in global supply chains. Temporary export spikes due to front-loading have not altered the projection of modest trade growth in the medium term, and rising inflation—particularly in service sectors in Australia, Indonesia, and beyond—adds to cost pressures. Labour market tightness, exemplified by wage inflation in Vietnam’s expanding export sectors, pushes companies toward automation and workforce upskilling as levers to maintain productivity.
Climate risks, including Indonesia’s monsoon variability and Iceland’s volcanic disruptions, highlight the need for climate-informed supply chain planning and resilient infrastructure investment. These factors combine with geopolitical and economic pressures to push COOs towards integrated, cross-functional “War Room” approaches where procurement, logistics, finance, and risk teams collaborate closely.
Regionalisation and nearshoring continue to gain traction. Companies look beyond global supply chains towards ASEAN integration and India’s manufacturing growth, creating more geopolitically neutral, diversified supply nodes in places like Vietnam, Indonesia, Poland, and Mexico. These “connector” economies offer not only risk mitigation but also strategic agility amid complexity.
In summary, Asia’s C-suite leaders are embracing a new playbook for supply chain management in 2025–2026. By embedding agility, sustainability, and digital capabilities within supply chains, they aim to turn volatility into opportunity. As Chandna concludes, success will belong to those who build resilient, transparent, and collaborative supply networks that can withstand shocks, respond swiftly, and meet the shifting demands of the global market. Only through such integrated, forward-looking strategies will businesses secure their competitive edge in an unpredictable world.
Source: Noah Wire Services
