Consumer landscapes are evolving at a rapid pace, while companies adapt to the new standard. Around the world, manufacturers and industrial firms are working hard to sustain and improve their supply chains. Companies that previously relied on foreign sourcing to save money are now looking for more cost-effective alternatives.
Procurement practitioners are increasingly relying on local sourcing. During the COVID-19 pandemic, as other businesses’ supply chains were disrupted, this approach helped many manufacturers maintain business continuity.
You never know when an opportunity or a challenge will present itself. For example, a great customer might offer you a highly lucrative deal, or a current client may require you to scale up to meet demand. Are you prepared?
If you source locally, the answer is almost certainly yes. This is because local suppliers are usually more sensitive than suppliers who are located farther away where it is much easier for a retailer to organize a shipment across the street than it is to coordinate a shipment across the globe.
You have less leverage over elements of your supply chain the farther you are away from them. Suppliers will claim to treat all customers and purchase orders fairly, but if they expect a site visit or a drop-in meeting from you, they are likely to remember you.
Face-to-face meetings will allow you to discuss any questions you may have and ensure that all items meet your expectations. There is also a smaller risk of something being “lost in translation,” which is normal when dealing with large numbers of people, many of whom are not on the floor and handling the items.
If you are trying to save money, you can also think about tightening the supply chain. Companies invest a staggering amount of money on logistics per year, with North American companies investing over $1 billion annually.
Localizing the supply chain will help you save money on a lot of these expenses. Additionally, since less money is spent on logistics, the bottom line will suffer less.
Local sourcing can not only help you save money, but it can also help you make more. Since your efforts to maintain a tight and fast-paced supply chain can impress local businesses, which can help you attract new customers.
Make your dedication to local sourcing a part of your marketing and sales plan. Consider incorporating it into your one-of-a-kind selling proposition.
It stands to reason that if sourcing locally boosts your bottom line, it will do the same for other local suppliers and producers, which can be a huge win for your community’s economy and residents.
Employees who are happy and well-compensated are more likely to invest in local businesses. Furthermore, well-known, and affluent organizations can give back to their communities by fundraising, volunteering, incentives, and sponsored events.
Localizing the supply chain is a brilliant way to contribute to environmental sustainability. When you cut down on transport and storage, you cut down on pollution and energy consumption. Local sourcing not only helps you support green production but also helps you create customer confidence.
Locally sourced employment benefits from partnering with businesses in the same time zone, which makes contact simpler and faster. You will be able to solve issues quicker and launch goods in response to spikes in market demand.
Consumer expectations for companies to improve their transparency around ethical supply chains and corporate social responsibility are at an all-time high. Manufacturers should carefully evaluate their third-party vendor risks and supply chain now.
Local sourcing will help the company become more versatile and agile, allowing it to respond to changing market demands and challenges while saving money and improving service levels.
Transportation carriers, warehousing firms, freight forwarders, and third-party logistics service providers are among the local networks of businesses that offer a wide range of logistics services. Retailers, suppliers (for both new products and aftermarket parts), and distributors all have distribution operations.
Bottom line, businesses that rely heavily on logistics as part of their service offering or as a significant part of their overall costs need the support of local networks to help them grow and contribute to economic development.