Change management: An existential supply chain capability?
As technology advances and disruptions multiply, third-party logistics providers and shippers must continue to work together to respond and adapt to change.
C. John Langley Jr., Ph.D. (jlangley@psu.edu) is Professor of Supply Chain Management at Penn State University’s Smeal College of Business and the Department of Supply Chain and Information Systems, and Founder of the “Annual Third-Party Logistics Study.”
Supply chains are subjected to constant change, and the most recent five years have forced supply chain professionals to navigate unprecedented issues, adapt to shifting demand patterns, and deal with unanticipated volatility and, to some extent, “black swan” events.
As a result, change management has become an essential capability to help improve supply chain operations, support collaboration both internally and with external partners, deploy new technology, and adapt to sometimes continually changing market pressures. Recognizing this importance, the 2025 Annual Third-Party Logistics Study (www.3PLStudy.com) took an in-depth look at change management. The majority of respondents to the study’s global survey—61% of shippers and 73% of 3PLs—reported that the need for supply chain change management is either critical or significant.
Shippers says that the biggest drivers of change in their supply chain organizations are customer demands, economic factors, and technological advancements.
2025 Annual Third-Party Logistics Study
Figure 1 above focuses on several factors that were identified as likely drivers of change in supply chains. Among shippers, the biggest drivers of change in their supply chain organizations included customer demands, economic factors, and technological advancements. Other factors included supplier considerations, societal shifts, and labor restraints. 3PL responses were similar to shippers’ except 3PLs ranked labor restraints as the fourth most important driver of change.
The study also asked respondents to identify areas in need of change. The most-identified area was supply chain visibility, cited by 69% of shippers and 68% of 3PLs. Technology, planning, and relationships also ranked highly.
Respondents also reported varying degrees of receptivity to change. About one-fourth of shippers and 3PLs said they are extremely receptive to change, while 45% of shippers and 53% of 3PLs said their organizations are moderately receptive to change.
AI underscores need for change management
Most supply chain professionals agree that the need to embrace change is likely to continue to increase. Technology is advancing rapidly, and artificial intelligence (AI) and machine learning are creating new opportunities to increase efficiency, improve decision-making, and optimize operations within the supply chain.
Among the many pertinent messages that received attention at the 2024 CSCMP EDGE Supply Chain Conference and Exhibition was that nearly every aspect of the supply chain will be involved with or impacted by AI. Example areas where significant improvements and results may be achieved include demand forecasting, inventory management, warehouse operations, predictive equipment maintenance, supplier relationship management, and more. As a result, AI may bring change to nearly every aspect of supply chain management and every level of employee.
This year’s 3PL study also focused on the growing role of AI in supply chains. Shippers and 3PLs are aligned on the top use cases for AI, with supply and demand forecasting and transportation and route optimization ranking at the top. Order management also ranked highly for both groups, while 3PLs see a slightly higher use case for warehouse automation than do shippers.
Both groups are also aligned on their view of AI as a tool that can automate data analysis, identify patterns, solve problems, and automate repetitive and mundane tasks. The hope is that AI will help companies better use their data to make improved and informed decisions. AI can process data and identify patterns and repetitive operational issues faster than a human can, which can improve forecasting, uncover inefficiencies, optimize processes, make predictions, and increase resiliency. Machine learning, a subset of AI, is expected to be especially useful for solving complex logistics problems by refining its predictions and recommendations over time to create more efficient operations.
Shippers and 3PLs agree that the greatest return on investment from AI will come from service-level improvements—cited by 40% of shippers and 37% of 3PLs—as well as data accuracy, cited by 34% of shippers and 39% of 3PLs.
Given the potential benefits of AI, shippers will increasingly be looking for 3PLs that offer AI solutions that they can use to achieve reliable results and gain a competitive advantage. Nearly three-quarters of shippers said 3PLs’ use of AI would influence their choice of a 3PL partner. On a more granular basis, 13% of shippers reported that they are very likely to switch 3PL providers based on their AI capabilities, 29% said they are likely, and 32% said they are somewhat likely to switch 3PL providers based on their AI capabilities. As demand for AI-based solutions increases, 3PL offerings will evolve, further exacerbating the change that supply chain organizations are experiencing.
Realizing benefits from change management
While the ability to manage change is critical to survival, so too is the ability to determine when change may be needed. To determine whether they need to change, companies should start by assessing their current state and opportunities for improvement. Next, they need to identify the desired state and benefits of change. To help drive success, the change management strategy should create a vision, identify solutions, and develop a plan for change.
For successful change to occur, stakeholders must work together to operate as a systematic supply chain rather than working as individuals with departmental goals that may not align. It is also critical to gain support for the change initiative among those who may be involved. Educating stakeholders about the need for change, creating a clear vision of what the change will accomplish, and outlining the benefits can help build support.
Many companies have found that using a structured change management process can reduce resistance to change, improve communication, and increase the likelihood of success. In the study, 58% of shippers and 76% of 3PLs reported using a change management framework. The two most frequently cited frameworks used by both shippers and 3PLs were the McKinsey 7-S (which identifies seven factors that influence an organization’s ability to change) and the ADKAR change management model (awareness, desire, knowledge, ability, and reinforcement). Use of an in-house proprietary system was cited by 36% of shippers and 29% of 3PLs.
The good news for those in supply chain is that key stakeholders are dedicated to minimizing disruptions, enhancing agility, and ensuring long-term success. In this year’s study, 89% of shippers reported that they are committed to the success of the broader, end-to-end (E2E) supply chain. It is clear that shippers sense a deep commitment to the broader concept of supply chain management and recognize the need to align themselves with multiple supply chain participants to create value for their end-user customers and consumers. What’s more, 64% of shippers reported that their 3PLs share this commitment to the E2E concept, and 69% indicated that some of their 3PLs are involved with their change management processes. Also encouraging is that 77% of shippers agree that their 3PLs are enthusiastic about joint efforts relating to change management.
In the complex and ever-evolving world of supply chains, change is inevitable. With effective change management practices in place, shippers and 3PLs can navigate these changes with greater confidence and turn them into opportunities for growth and improvement.
The launch is based on “Amazon Nova,” the company’s new generation of foundation models, the company said in a blog post. Data scientists use foundation models (FMs) to develop machine learning (ML) platforms more quickly than starting from scratch, allowing them to create artificial intelligence applications capable of performing a wide variety of general tasks, since they were trained on a broad spectrum of generalized data, Amazon says.
The new models are integrated with Amazon Bedrock, a managed service that makes FMs from AI companies and Amazon available for use through a single API. Using Amazon Bedrock, customers can experiment with and evaluate Amazon Nova models, as well as other FMs, to determine the best model for an application.
Calling the launch “the next step in our AI journey,” the company says Amazon Nova has the ability to process text, image, and video as prompts, so customers can use Amazon Nova-powered generative AI applications to understand videos, charts, and documents, or to generate videos and other multimedia content.
“Inside Amazon, we have about 1,000 Gen AI applications in motion, and we’ve had a bird’s-eye view of what application builders are still grappling with,” Rohit Prasad, SVP of Amazon Artificial General Intelligence, said in a release. “Our new Amazon Nova models are intended to help with these challenges for internal and external builders, and provide compelling intelligence and content generation while also delivering meaningful progress on latency, cost-effectiveness, customization, information grounding, and agentic capabilities.”
The new Amazon Nova models available in Amazon Bedrock include:
Amazon Nova Micro, a text-only model that delivers the lowest latency responses at very low cost.
Amazon Nova Lite, a very low-cost multimodal model that is lightning fast for processing image, video, and text inputs.
Amazon Nova Pro, a highly capable multimodal model with the best combination of accuracy, speed, and cost for a wide range of tasks.
Amazon Nova Premier, the most capable of Amazon’s multimodal models for complex reasoning tasks and for use as the best teacher for distilling custom models
Amazon Nova Canvas, a state-of-the-art image generation model.
Amazon Nova Reel, a state-of-the-art video generation model that can transform a single image input into a brief video with the prompt: dolly forward.
Economic activity in the logistics industry expanded in November, continuing a steady growth pattern that began earlier this year and signaling a return to seasonality after several years of fluctuating conditions, according to the latest Logistics Managers’ Index report (LMI), released today.
The November LMI registered 58.4, down slightly from October’s reading of 58.9, which was the highest level in two years. The LMI is a monthly gauge of business conditions across warehousing and logistics markets; a reading above 50 indicates growth and a reading below 50 indicates contraction.
“The overall index has been very consistent in the past three months, with readings of 58.6, 58.9, and 58.4,” LMI analyst Zac Rogers, associate professor of supply chain management at Colorado State University, wrote in the November LMI report. “This plateau is slightly higher than a similar plateau of consistency earlier in the year when May to August saw four readings between 55.3 and 56.4. Seasonally speaking, it is consistent that this later year run of readings would be the highest all year.”
Separately, Rogers said the end-of-year growth reflects the return to a healthy holiday peak, which started when inventory levels expanded in late summer and early fall as retailers began stocking up to meet consumer demand. Pandemic-driven shifts in consumer buying behavior, inflation, and economic uncertainty contributed to volatile peak season conditions over the past four years, with the LMI swinging from record-high growth in late 2020 and 2021 to slower growth in 2022 and contraction in 2023.
“The LMI contracted at this time a year ago, so basically [there was] no peak season,” Rogers said, citing inflation as a drag on demand. “To have a normal November … [really] for the first time in five years, justifies what we’ve seen all these companies doing—building up inventory in a sustainable, seasonal way.
“Based on what we’re seeing, a lot of supply chains called it right and were ready for healthy holiday season, so far.”
The LMI has remained in the mid to high 50s range since January—with the exception of April, when the index dipped to 52.9—signaling strong and consistent demand for warehousing and transportation services.
The LMI is a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
Specifically, 48% of respondents identified rising tariffs and trade barriers as their top concern, followed by supply chain disruptions at 45% and geopolitical instability at 41%. Moreover, tariffs and trade barriers ranked as the priority issue regardless of company size, as respondents at companies with less than 250 employees, 251-500, 501-1,000, 1,001-50,000 and 50,000+ employees all cited it as the most significant issue they are currently facing.
“Evolving tariffs and trade policies are one of a number of complex issues requiring organizations to build more resilience into their supply chains through compliance, technology and strategic planning,” Jackson Wood, Director, Industry Strategy at Descartes, said in a release. “With the potential for the incoming U.S. administration to impose new and additional tariffs on a wide variety of goods and countries of origin, U.S. importers may need to significantly re-engineer their sourcing strategies to mitigate potentially higher costs.”
Grocers and retailers are struggling to get their systems back online just before the winter holiday peak, following a software hack that hit the supply chain software provider Blue Yonder this week.
The ransomware attack is snarling inventory distribution patterns because of its impact on systems such as the employee scheduling system for coffee stalwart Starbucks, according to a published report. Scottsdale, Arizona-based Blue Yonder provides a wide range of supply chain software, including warehouse management system (WMS), transportation management system (TMS), order management and commerce, network and control tower, returns management, and others.
Blue Yonder today acknowledged the disruptions, saying they were the result of a ransomware incident affecting its managed services hosted environment. The company has established a dedicated cybersecurity incident update webpage to communicate its recovery progress, but it had not been updated for nearly two days as of Tuesday afternoon. “Since learning of the incident, the Blue Yonder team has been working diligently together with external cybersecurity firms to make progress in their recovery process. We have implemented several defensive and forensic protocols,” a Blue Yonder spokesperson said in an email.
The timing of the attack suggests that hackers may have targeted Blue Yonder in a calculated attack based on the upcoming Thanksgiving break, since many U.S. organizations downsize their security staffing on holidays and weekends, according to a statement from Dan Lattimer, VP of Semperis, a New Jersey-based computer and network security firm.
“While details on the specifics of the Blue Yonder attack are scant, it is yet another reminder how damaging supply chain disruptions become when suppliers are taken offline. Kudos to Blue Yonder for dealing with this cyberattack head on but we still don’t know how far reaching the business disruptions will be in the UK, U.S. and other countries,” Lattimer said. “Now is time for organizations to fight back against threat actors. Deciding whether or not to pay a ransom is a personal decision that each company has to make, but paying emboldens threat actors and throws more fuel onto an already burning inferno. Simply, it doesn’t pay-to-pay,” he said.
The incident closely followed an unrelated cybersecurity issue at the grocery giant Ahold Delhaize, which has been recovering from impacts to the Stop & Shop chain that it across the U.S. Northeast region. In a statement apologizing to customers for the inconvenience of the cybersecurity issue, Netherlands-based Ahold Delhaize said its top priority is the security of its customers, associates and partners, and that the company’s internal IT security staff was working with external cybersecurity experts and law enforcement to speed recovery. “Our teams are taking steps to assess and mitigate the issue. This includes taking some systems offline to help protect them. This issue and subsequent mitigating actions have affected certain Ahold Delhaize USA brands and services including a number of pharmacies and certain e-commerce operations,” the company said.
Editor's note:This article was revised on November 27 to indicate that the cybersecurity issue at Ahold Delhaize was unrelated to the Blue Yonder hack.
The new funding brings Amazon's total investment in Anthropic to $8 billion, while maintaining the e-commerce giant’s position as a minority investor, according to Anthropic. The partnership was launched in 2023, when Amazon invested its first $4 billion round in the firm.
Anthropic’s “Claude” family of AI assistant models is available on AWS’s Amazon Bedrock, which is a cloud-based managed service that lets companies build specialized generative AI applications by choosing from an array of foundation models (FMs) developed by AI providers like AI21 Labs, Anthropic, Cohere, Meta, Mistral AI, Stability AI, and Amazon itself.
According to Amazon, tens of thousands of customers, from startups to enterprises and government institutions, are currently running their generative AI workloads using Anthropic’s models in the AWS cloud. Those GenAI tools are powering tasks such as customer service chatbots, coding assistants, translation applications, drug discovery, engineering design, and complex business processes.
"The response from AWS customers who are developing generative AI applications powered by Anthropic in Amazon Bedrock has been remarkable," Matt Garman, AWS CEO, said in a release. "By continuing to deploy Anthropic models in Amazon Bedrock and collaborating with Anthropic on the development of our custom Trainium chips, we’ll keep pushing the boundaries of what customers can achieve with generative AI technologies. We’ve been impressed by Anthropic’s pace of innovation and commitment to responsible development of generative AI, and look forward to deepening our collaboration."