4 supply chain trends for COOs in 2026

1. AI for decision-making

AI is moving beyond test projects to being embedded in tools that help supply chain leaders make decisions.

2024 saw an explosion of generative AI pilots, but most did not deliver ROI, according to Ketul Patel, president and managing partner of OMIIA Consulting, an operations consulting company located in Vadodara, Gujarat, India.

"Companies realized that large models weren't practical, but small, targeted AI agents were," Patel said.

Over the last couple of years, vendors have added AI capabilities to the systems that companies use for the supply chain, such as ERP, TMS (transport management system) and WMS (warehouse management software), Patel said.

"AI became native to operations rather than bolted on," he said.

Vendors have released AI-driven tools that help supply chain leaders make decisions, with these tools' capabilities including lead-time forecasting and order allocation, Patel said.

2. Nearshoring

The trend of nearshoring will continue to be a major topic for COOs and other supply chain executives in 2026.

Companies are done with absorbing the cost of uncertainty, said Adam Beckerman, manufacturing and distribution leader at Aprio, a business advisory, tax and accounting firm located in Atlanta.

Supply chain executives want their operations close by so their company can adapt to change in real time, he said. That desire will accelerate nearshoring.

3. Multi-country sourcing

Supplier diversification is essential for many companies to ensure protection against volatility. That search for backup options will lead to an expansion of multi-country sourcing in 2026.

The strategy known as "China+1" – organizations avoiding relying on China for supply chain operations to attempt to reduce their risk – has now led to what Patel calls "China+2+Nearshore" – having multiple backups for China and following the nearshoring model.

"[This new approach is] driven by geopolitical uncertainty, rising labor costs and supply chain risk," Patel said.

Continued uncertainty will also mean that suppliers companies have categorized as "tier 3" during supplier segmentation will become more important, Patel said.

4. Machine-to-machine interactions

AI use in the supply chain will continue to grow.

In 2026, AI use for demand and capacity planning will continue, which will help improve forecasts, reduce error tolerance and improve efficiency across the value chain, said Joe Gordon, chief supply chain and technology officer at Krispy Krunchy Foods, LLC. Customer service will also continue to be affected by AI.

Customer service AI use is moving toward machine-to-machine interactions, Gordon said. Human employees will need to upskill to ensure they are up to date on AI technology.

Executive takeaway

In 2026, embedded AI will continue to take on tasks such as order allocation, while approaches such as nearshoring and multi-country sourcing models will attempt to bring about supply chain resilience. Also, machine-to-machine interactions in customer service will become standard.

Pam Baker is a freelance journalist and the author of books including ChatGPT For Dummies and Generative AI For Dummies. Baker is also an instructor on AI topics for LinkedIn Learning and a member of the National Press Club, the Society of Professional Journalists and the Internet Press Guild.