Concerns Arise Among Supply Chain Managers Regarding Their Vendor Reliability
The latest Lehigh Business Supply Chain Risk Management Index (LRMI) for the second quarter of 2025 reveals a somewhat improved supply chain landscape, yet persistent challenges remain, particularly in the area of Supplier Risk.
According to the LRMI, eight out of ten risk categories have shown a decline, indicating a general improvement in supply chain stability. However, Supplier Risk has been identified as the top concern, with issues such as overdependence on single sources, geographic concentration, quality control problems, and price volatility within supplier networks continuing to pose significant challenges to supply chain professionals.
The LRMI, launched in 2020, ranks 10 broad categories of supply chain risks, including cybersecurity and data, customer, economic, environmental, government intervention, operational, quality, supplier, technological, and transportation disruption. The index is published every quarter in March, June, September, and December.
One of the most striking findings in the Q2 2025 LRMI is the rise in Government Intervention Risk, suggesting ongoing concern over new regulations, tariffs, and trade restrictions. This increased risk has contributed to the LRMI showing that supply chain risk is currently at its highest level since its inception in 2020.
Another notable development is the decrease in the percentage of products obtained from China. Due to tariffs and geopolitical issues, the percentage has dropped from 60% four years ago to less than 5% by the end of 2025.
The Center for Supply Chain Research at Lehigh, which leverages faculty, students, alumni, and industry partners for research and best practices, aims to bridge theory and practice in supply chain management. The centre's mission aligns with that of CSCMP, which is to connect, educate, and develop supply chain management professionals throughout their careers.
In the USA, there is a perceived need for incentives for reshoring, as economic risk showed the largest quarter-over-quarter increase, rising over 16.5 points. Dropping regulations is considered beneficial for operating more unencumbered, while cybersecurity risk dropped to the fourth highest risk, marking a shift as it held the top spot in four of the past five quarters. The cybersecurity risk is perceived to increase with the evolution of Artificial Intelligence.
As the supply chain landscape continues to evolve, the LRMI serves as a valuable tool for supply chain professionals to understand and manage risks effectively. The next LRMI survey for the next quarter can be taken by visiting business.lehigh.edu/LRMI.
- Alumni from the Center for Supply Chain Research at Lehigh University, who have been educated in supply chain management, might find the latest Lehigh Business Supply Chain Risk Management Index a useful resource in their roles as supply chain professionals.
- Faculty at the Center for Supply Chain Research are conducting research in the area of supplier risk, aiming to develop strategies for mitigating persistent challenges such as overdependence on single sources, quality control problems, and price volatility within supplier networks.
- Businesses could seek to collaborate with the Center for Supply Chain Research in their efforts to manage risks in the supply chain, particularly in light of the rising concerns over Government Intervention Risk and the need for incentives for reshoring.
