Manufacturers Confront Upstream Supply Disruptions, Changing Consumer Demand: RELEX Report

89% of manufacturers report material impact from tariffs and trade policy changes, according to RELEX Solutions’ 2026 State of the Supply Chain report. 57% of manufacturers surveyed say the supply of raw materials and components is the supply chain area most affected by recent disruptions.

“Unlike retailers who can pivot inventory across products, manufacturers face longer lead times and more rigid supply commitments, making supplier disruption particularly consequential,” the report says.

On the consumer side, 40% of manufacturers say they are experiencing demand fluctuations, and 21% are noting a shift in consumer preferences and habits.

In response to these disruptions, 49% of manufacturers surveyed have made minor sourcing or supplier adjustments. 46% report raising consumer prices to make up for higher costs, and 30% say they have absorbed costs internally.

Other strategic responses to trade volatility include:

• 34% pursued geographic diversification in sourcing
• 26% canceled or delayed product launches
• 21% pursued significant restructuring or delayed investments

“The high rate of supplier adjustments (49%) combined with geographic sourcing shifts (34%) suggests manufacturing supply chains remain dynamic and adaptive, though the cost of this flexibility in terms of delayed innovation (26%) and foregone investments (21%) may have longer-term competitive implications,” the report says.

Manufacturers are also changing product strategies to mitigate the negative impacts of disruptions and changing consumer behavior. 43% report adjusting pack sizes, SKUs and promotions as consumers make the switch to cheaper alternatives.

34% of manufacturers say demand volatility is complicating production planning, and 31% report using generative AI for supply chain planning, product innovation and marketing content.

“AI is becoming part of everyday supply chain decision-making,” says RELEX Solutions Group Vice President of Manufacturing Industry Strategy Madhav Durbha. “As volatility persists, companies are investing in AI-driven forecasting, optimization and decision support to respond faster and operate with greater confidence, even when conditions change quickly.”