Global supply chains are being reshaped by a convergence of forces: geopolitical volatility, tightening regulations, resource constraints and escalating cyberthreats. For manufacturers and industrial firms around the world, this turbulence has transformed the supply chain from a back-office function into a strategic operation.
According to Indranil Sircar, chief technology officer of manufacturing and mobility industry at Microsoft, this new reality demands not just incremental improvement but a rethinking of how supply chains operate, collaborate and adapt. “Geopolitical shifts – such as tariffs and export controls – have become daily realities, forcing us and our peers in manufacturing to rethink sourcing strategies and regional footprints,” he says.
Indranil Sircar, chief technology officer of manufacturing and mobility industry at Microsoft
At the same time, regulatory frameworks like the Corporate Sustainability Reporting Directive and EU Deforestation Regulation are elevating compliance from a reporting activity to an operational discipline, requiring auditable, multi-tier data across global value chains.
Resource shortages and cyber risks are adding further strain, where maintaining expectations for uptime and resilience leads to compressed margins. In this constantly shifting environment, manufacturers are moving decisively away from reactive firefighting. Instead, they are deploying control towers for early warning detection, embedding scenario planning into everyday workflows and treating compliance as a core business function.
“These changes are altering how industrials operate, driving a need for agility, transparency and proactive risk mitigation,” says Sircar. “In short, the supply chain has become a strategic channel for continuity, compliance and competitiveness – not just a back-office cost centre.”
Microsoft’s work with manufacturers, partners and its own internal supply chain has led to the identification of five essential capabilities for resilience and sustainability: visibility and risk orchestration; AI-driven planning and adaptation; compliance and resource efficiency; cyber-resilient operations; and workforce enablement.
“Our approach is grounded in our direct experience solving real-world challenges,” says Sircar. “At Microsoft, our role is to make the supply chain ecosystem work together.” That means unifying data foundations, applying Copilot and agentic AI to augment planners and operators, and offering a secure, composable platform for data, AI and agentic orchestration.
A key part of this strategy is enabling customers and partners to interoperate through open standards and flexible architectures. When specialised capabilities are needed, organisations can pilot governed agents in Azure AI Foundry, connecting external and internal tools through the model context protocol and enabling agent-to-agent collaboration across the ecosystem.
AI-driven scenario modelling is emerging as one of the most transformative capabilities in modern supply chains. Solutions like Blue Yonder’s agentic AI on Microsoft Azure and o9’s Digital Brain with Azure OpenAI enable planners to run ‘what-if’ analyses for disruptions such as tariffs, demand shifts or logistics constraints. These capabilities allow organisations to quickly evaluate alternatives, re-source components and adjust routes, turning planning from a static process into a dynamic, data-driven discipline.
Microsoft applies these same principles internally. “By leveraging real-time disruption sensing, predictive analytics and AI-assisted planning on a connected data backbone, our teams simulate alternatives, align decisions quickly and coordinate execution across suppliers,” says Sircar. “This operating model – documented in Microsoft’s supply-chain resilience guidance – shifts planning from reactive to proactive, data-driven decisioning.” Microsoft’s leadership in this space was recognised by Gartner, ranking ninth in its 2025 Global Supply Chain Top 25 for advancing autonomous operations through demand-sensing and generative AI, democratising decision-making, and championing sustainability initiatives such as reducing greenhouse gas emissions and adopting sustainable aviation fuel.
The measurable gains achieved by organisations adopting this approach are compelling. Grupo Bimbo – one of the world’s largest baking companies – for example, has used Microsoft Power Platform to deliver tens of millions of dollars in annual savings while empowering thousands of employees to automate processes.
While technology is critical, Sircar stresses workforce enablement and ecosystem collaboration are equally central to the future of supply chains. Companies that invest in role-based academies, digital assistants and automation often realise productivity gains of 20 to 30 per cent, maintaining throughput even during labour shortages.
“At Microsoft, we support workforce enablement through Copilot, digital work instructions and collaborative solutions like Teams and Viva, helping employees adapt to new systems and processes,” says Sircar. “We also foster ecosystem collaboration by providing a secure, composable platform that connects partners, suppliers and customers in real time. This approach accelerates innovation, drives adoption and builds resilience across the entire value chain. As supply chains become more autonomous and interconnected, we believe that investing in people and partnerships will be the defining factor for success. Equally important, our adoption programmes and change management patterns help organisations overcome cultural and social barriers to AI adoption, so workforce transformation sticks.”
Generative AI, Copilot, agentic AI, digital twins and robotics are becoming essential to executing modern supply chain strategies. Copilot summarises control tower signals and automates routine communication. Agentic AI runs rolling scenarios, recommends trade-offs and pushes approved changes into execution systems. Digital twins validate changes before deployment, while robotics and vision AI address labour constraints and enhance throughput and quality. Looking ahead, capabilities such as agentic AI governed via Agent 365 and semantic reasoning through Fabric IQ – currently available for pilot and early adoption – will enable agents to recommend trade-offs and execute approved changes under enterprise policy, integrated securely via Foundry IQ and Model Context Protocol as these technologies mature.
Microsoft brings these capabilities into daily operational flow by connecting data, people and partners across Microsoft 365 and Copilot. Customers such as Grupo Bimbo and tyre manufacturer Bridgestone have already seen marked improvements in productivity, inventory optimisation and operational agility.
For organisations at the start of their transformation, Sircar emphasises an outcome-first approach.
“Start with an outcome backlog, not a tool list,” he says. Companies should identify two or three measurable challenges – whether reducing expedite spend or improving forecast accuracy – and tie them to clear KPIs. From there, they can create a simple first version of a supply chain control tower within a few weeks, pilot AI-assisted planning on a single product family, embed compliance from day one and invest in their people and security posture. Grounded in real deployments, the five-pillar roadmap offers a clear, practical framework for building sustainable, resilient supply chains,” says Sircar.
Next, Sircar anticipates regionalisation and dual-sourcing becoming standard practice, with policy-aware planning and role-based copilots institutionalised across the industry. “Evidence-ready compliance will shift from quarterly projects to platform services, and agentic orchestration – where agents securely negotiate, simulate and execute bounded decisions – is expected to gain traction as organisations mature their digital capabilities,” he says.
Microsoft is investing in this future by leading with Copilot and agents, building the governed data backbone and enabling the ecosystem’s transition to agentic operations through open patterns and frameworks.
“This is our north star,” Sircar says. “The frontier firm will be increasingly shaped by agentic technologies and ecosystem orchestration, empowering the workforce and achieving autonomous, resilient and sustainable operations. That’s the vision we’re building toward – and we’re excited to help our customers and partners realise it.”
Partner perspectives
We asked selected Microsoft partners how they are using Microsoft technologies to ensure the manufacturing supply chain operates smoothly, with resilience and sustainability
“Decision Intelligence has reached an inflection point – its value is proven,” says Matthew Bunce, decision intelligence engagement principal at Aera Technology. “And with partners like Microsoft, an expanding ecosystem is enabling enterprises to reduce waste, improve working capital and revenue growth and enhance customer service. This is the full potential of agentic decision-making at scale.”
“Businesses today need agile, real-time planning and forecasting solutions to maintain operational flexibility in volatile, disruptive climates,” says Emily Nicholls, vice president of applications and supply chains at Anaplan. “Our AI-driven scenario planning and analysis platform enables a seamless connection between supply chain strategy and execution, with collaborative forecasting affording enterprises the dynamism needed to keep pace with unexpected developments.”
“IBM Consulting brings three capabilities to manufacturing supply chains: deep industry patterns, resilient operating playbooks and interoperable technology on Microsoft cloud,” says Miha Kralj, global senior partner for hybrid cloud services at IBM. “Our approach is designed to support clients in working towards steadier throughput, improved recovery times and measurable ESG outcomes across manufacturing IT and OT environments.”
“At Synergy Technical, we help manufacturers strengthen and streamline their supply chains using Microsoft Cloud for Manufacturing and Azure AI,” says Chris Weinfurt, Microsoft alliance manager at Synergy Technical. “By connecting data across production, logistics and suppliers, we deliver real-time visibility that improves forecasting and reduces disruption.”
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