Global disruptions and increasing trade tensions from tariffs and conflict have made resilience the new priority for supply chains across a variety of sectors.
According to Rafa Mercado, vice president, consumer and travel market leader at Kyndryl, “supply chains once optimised purely for cost and speed are now being redesigned for flexibility and security, balancing efficiency with risk management amid sanctions, cyberthreats and political instability.”
As part of this new era of supply chain transformation, AI-powered tools are helping businesses to automate operations.
“AI-driven analytics predict demand and optimise inventory with greater accuracy, augmenting human decision-making at scale,” says Mercado. “Meanwhile, agentic AI systems can dynamically reroute shipments or adjust orders with minimal human intervention, enabling businesses to inch towards a ‘self-healing’ supply chain that adapts in real time.”
Organisations should consider three key steps when developing an intelligent supply chain, starting with a clear digital strategy.
“A transformation must be anchored to business goals from day one,” says Mercado. “It’s critical to define what value a new supply chain model should deliver and get input across the organisation. This vision guides all other decisions and prevents aimless technology experimentation.”
Second, firms need to unify their data to ensure that any intelligent solutions can operate efficiently.
“Siloed projects and poor data governance are common stumbling blocks in supply chain overhauls,” says Mercado. “Adopting flexible, cloud-based architectures such as a hybrid Microsoft Azure setup that spans cloud and local sites can help unify data across channels and geographies, enabling real-time visibility.”
Then, as organisations progress through the transformation process, it is vital that they maintain the human-technology balance.
“Keeping a human in the loop is critical as AI is adopted,” says Mercado. “While AI can automate and accelerate processes, humans provide judgement, intuition and ethical oversight. In fact, experts emphasise that humans act as a safety net, catching issues or anomalies that algorithms might miss and ensuring AI outcomes align with business values.
“Furthermore, maintaining a human-technology balance also contributes to workforce engagement and trust. Involving employees in the AI rollout helps to demystify the technology and reduce fears. This collaborative mindset ultimately yields a more innovative and adaptive organisation.”
Kyndryl and Microsoft are currently working together to accelerate digital transformation for enterprises by enabling hybrid cloud models.
“Kyndryl has expanded its distributed cloud services to leverage Microsoft’s Azure Arc and Azure Local platforms, which bridge on-premises environments with the Azure public cloud,” says Mercado. “This means organisations can run their applications and data wherever it makes most sense.
“The Kyndryl-Microsoft team helps set up this hybrid cloud fabric so that supply chain applications can move fluidly between edge computing environments and the cloud, improving interoperability along with the return on investment.”
Mercado’s advice for organisations looking to transform their models and create customisable value chains is to build an adaptive technology foundation and start by ensuring the infrastructure is agile.
“Embracing a hybrid cloud strategy, for example using Microsoft’s adaptive cloud approach with Azure Arc and Azure Local, can give you the flexibility to run processes wherever they operate best,” he says. “Such a setup lets you reconfigure parts of your value chain quickly in response to market changes.”
Once this foundation has been established, organisations can leverage advanced analytics to further drive customisation.
“Tools like demand sensing and digital twin simulation allow you to anticipate shifts and test ‘what if’ scenarios in a risk-free way,” explains Mercado. “For instance, you can model how a spike in fuel prices or a sudden change in consumer preferences would impact your network, then prepare accordingly.”
Finally, organisations should treat the transformation process as a team sport and collaborate with strategic partners to accelerate the journey.
“This could mean collaborating with technology providers or consulting firms,” says Mercado. “A partner like Kyndryl, working closely with Microsoft, can bring in specialised expertise, ready-made solution frameworks and even co-innovation opportunities. Tapping into an ecosystem ensures you’re using best of breed tools and knowledge, and it can help to bridge any skill or resource gaps your organisation might have.
“True transformation lies not in the technology itself, but in how we wield it, blending data, insight and human courage to turn challenge into advantage. As AI and agentic systems emerge, managing platforms and infrastructure will only grow more complex, making purposeful leadership, adaptability and trusted partnerships more essential than ever.”
Discover more insights like this in the Summer 2025 issue of Technology Record. Don’t miss out – subscribe for free today and get future issues delivered straight to your inbox.