Report: Supply Chain Costs Soon to Exceed Inflation by 7%

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Editor’s Note

This article highlights a critical forecast from Kearney’s “Supply Chain Navigator” report, indicating a significant acceleration in supply chain cost pressures. Businesses should prepare for these rising costs, which are projected to outpace general inflation by a widening margin.

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Report: Supply Chain Costs Soon to Exceed Inflation by 7%

Global supply chain costs are set to rise up to 7% above inflation by Q4 2025, compared to just 2% in the previous year, according to the most recent “Supply Chain Navigator” report from management consulting firm Kearney. The report, released August 26, projects that inventories stockpiled ahead of tariff deadlines are now being depleted, forcing companies to restock at higher prices.

“This is an early signal that the cost of goods and materials is rising before they reach store shelves, creating intensifying margin pressure,” warns Kearney partner Suketu Gandhi. “For retailers, the choice is price stability or margin: should they defend the customer by not raising prices to match their costs, or should they protect their margins? With volatility now the new default setting, this quarter could mean a big reset.”

“Volatility is no longer a disruptor; it’s the default setting,” the report begins.

Advice for Mitigating Volatility

Advice for mitigating the effects of volatility includes making adaptability a supply chain design principle, building out scenario planning as an enterprise-wide capability, and pairing it with multi-node, tech-enabled networks that adjust quickly when disruption strikes. Kearney also advises designing business processes for AI-led business reengineering, not just AI-enabled tasks.

“Supply chains that thrive won’t be those that resist disruption best, but those designed to expect it,” said Rupal Deshmukh, Partner, Kearney Supply Chain Institute.
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⏰ Published on: August 28, 2025