Why a local sourcing strategy can help boost the economy

You can read this article in 6 minutes

Why a local sourcing strategy can help boost the economy

As a result of the pandemic, the world is experiencing a recession affecting most countries. There is a tendency to “buying local” or local sourcing, designed to set in motion the Economy after the prolonged-lockdowns, the stop of many operations, the falling of employments and much more, a significant per cent willing to buy products whatever the cost. All businesses are coming together in a time of adversity.

An analysis of this new perspective

·       “Made local” approach represents currently numerous manufacturing companies. According to many businesses, they are focusing mainly on the positive contribution their purchasing decisions have on the environment.

·        Businesses believed that buying and producing local could help tackle climate change.

·       Almost eight in ten businesses said they would like to buy more local products than they already do.

·       A number of our industries have transformed product lines to support coronavirus efforts.

·       Manufacturers must boost products made-locally by making it simple to buy, either for consumers or companies.

For instance, a top car manufacturer suggested changing their sourcing strategies to focus on local Supply Chains (SCs) gradually. The carmaker mentioned that its main component-suppliers plan to do the same: to increase their investment in the coming years and augment the resource of local components for current models and future vehicles. Manufacturers intend to contract global SC to fortify its strong points and enhance environmental and financial sustainability simultaneously. International suppliers currently represent more than half of the SC purchasing resources.

What to do? 

·       Analyse your current components which could be supplied from your country in the mid-term.

·       You will need everyone’s collaboration to succeed.

·       Carmakers and suppliers must invest in edge-technologies to improve competitiveness and adapt to Industry 4.0, electrification and the connected car.

·       They must develop into more competitive-renovated car industry so to remain a local and global automotive driving force.

·       Tackle this transformation towards electric vehicles, forcing manufacturers and suppliers to restructure operations and strategies.

·       Be aware of new players in the automotive industry with lower wage-costs, who are intensifying competition in the marketplace.

·       Analyse which technologies your SC requires to manufacture connected-electric cars successfully.

·       Sustainability Rating (S-Rating) tool weighs up and supports the commitment of its suppliers towards sustainability.

·       Companies must demand their entire supplier’s network to make further commitments to corporate social responsibility and to renovate or extend existing contracts to achieve S-Rating skills.

How are consumer preferences and purchasing behaviour influencing local economies?

Buying local has numerous tangible-measurable outcomes, as this approach does improve economies with long-lasting benefits on businesses and people’s welfare, and by all means, it feels better! The long-term vision is to achieve the most satisfactory level of traceability in terms of sustainability and performance throughout SC.

When talking about the food industry, shopping local has become a catchword; it means more than simple marketing for groceries. Several top retailers have included local products to gain marketing reliability. Local sourcing always looks for carrying in as many local brands as thinkable to stock stores; it is an increasing trend now boosting the local and world Economy. This approach has a multiple-effects significantly impacting money-gains. Statistics show that when you purchase locally, and not from big market chains, the money paid, most of the times stay in your local community.

Our spending behaviour has a positive/negative impact. 

·       Big chains like Wal-Mart, gave out many knockouts to small-family shops, forcing many to close.

·       A chain-company takes orders typically from corporate, and hire store-managers and employees that are not genuinely engaged in the community.

·       Corporate brands give the feeling of not knowing what community you are when shopping.

·       It keeps money flowing within the Local Economy.

·       Buying local keeps local businesses afloat.

·       Studies show that shopping local builds-up independent businesses and creates jobs, as they generate around two-thirds of private-sector jobs.

·       Local-small businesses create much more jobs than major automated-multinational companies.

·       Employment at local businesses shown to keep more people embedded in their communities; when shopping at local establishments, you are putting money into the pockets of local workers who might be your neighbours or even family.

·       Those earnings will possibly be spent in town, making it a chain model.

·       It has a positive civic impact and creates a sense of community, strengthening it.

·       Over-all, local-store owners have enormous motivations to support other local commerce and suppliers.

·        When shopping for food, buying local according to season is more eco-friendly.

·       Local grocery stores are most likely to offer groceries with very short SCs, from the source to the marketplace, avoiding the environmental footprinting.

·       Many of these items are one-of-a-kind product you cannot find anywhere else. They tie individuals to the community and give character to a shopping district.

·       The visual feeling of a community is very significant. With the booming of local businesses, the impression will be one of energetical prosperity, a creative-positive atmosphere for the whole community.

·       Most small businesses offer an identity as a community and an exceptional sense of belonging. Local involvement is part of a good neighbourhood guiding-principle. 

CONCLUSIONS: our industries are into a global economic crisis, so, local resourcing needs to move forwards. Have you thought on this local buying/sourcing alternative?

David Food is the Strategy Director of Prophetic Technology. He brings a significant breadth of skill, innovation and capability in the use of software and technology to improve supply chains, develop marketing and unlock business potential, whether globally or locally, with collaborative or enterprise-wide solutions.

Photo by Tom Grünbauer on Unsplash

Trending articles
Trending articles