There’s a great advantage to sourcing locally for any Original Equipment Manufacturer (OEM) or company, especially in the United States today. But it remains an overshadowed alternative against international sourcing, the industry’s sure and trusted route for past decades.
Many OEMs maintain international supply chains for valid reasons, such as cheaper labor, unique craftsmanship, cheaper raw materials and more.
A reckoning is starting to take shape, as issues such as lower quality of products and increased reports of child labor in foreign supply favorites like China and India continue to surface. More and more OEMs are starting to consider sourcing their products locally.
Below here are the various advantages of sourcing locally for companies.
Improved Public Relations and Community Engagement
Any expert would agree that any company looking to boost public relations would benefit greatly from moving some of its international business back home.
There are many benefits for both the company and the immediate community that gets involved in the local supply chain. For the former, better control of the business and lower expenses are just the tip of the iceberg.
For the latter, there’s an increased prospect of jobs within the supply chain, right from the local manufacturers/producers to the warehouse service providers.
Workers for the company can always invest back into the community too, in addition to spreading word-of-mouth about their company to other citizens and occasionally when asked to, the press.
Sourcing locally helps you have better control over one major aspect of your enterprise: the supply chain. The ideal supply chain is one where all items ordered are provided by the manufacturer as required standard and quality-wise, and on time.
But the ideal supply chain is not always achievable, because there’s often a delay here and an error in the design there.
Experts recommend that the best way to be on top of one’s supply chain is to be in control of it, mostly by knowing what’s happening where and why. This naturally requires close proximity with manufacturers and service providers, or at least easy access through communication.
And that’s where sourcing internationally becomes difficult. Because manufacturers and service providers tend to be thousands of miles away, regular access to them is difficult. Monitoring the production process regularly is virtually impossible or just too expensive.
Unless you can afford a regional representative, you might never know if your order is being worked on last or if you’re items are being stored haphazardly. Plus there’s always room for misunderstanding as more often than not, international components of the supply chain tend to use languages other than English.
Sourcing locally becomes, therein, a simpler, better alternative. With a more localized supply chain, monitoring the whole supply process becomes less expensive and achievable, so you can always make sure your order is being worked on.
You can always have site visits with manufacturers and dispel confusion with in-person explanations. And of course, you can monitor the transportation of your items easier in real-time when they’re locally sourced.
If there is one reason any company should consider sourcing mostly locally, it is cost. Sourcing internationally remains attractive in its own right, because of the variety and craftsmanship different corners of the world have to offer.
But in exchange for variety, companies always find themselves with astronomical costs resulting from mostly the logistics of the entire process.
Shipping internationally is no easy process. There’s all manner of costs and risks, stretching from international taxes to currency exchange fees to shipping fees, and all the way to accidents, storage fees and delivery delays.
Sometimes, expensive lawyers have to be hired. Even existing trade agreements between the US and its trade partners are facing uncertainty these days, a major cause for worry among international traders.
All these combined are guaranteed to expand the already high cost of doing business internationally, which is never great news for the bottom line.
That’s where sourcing locally becomes just as attractive an alternative. When suppliers are close by, say within the same city or the same country, there’s no international rules to abide and taxes to shell out, and definitely less storage fees to incur or delivery delays to fight through.
In other words, the supply chain costs are greatly lowered and manufacturers can afford to make budget forecasts that are closer to reality. Companies looking to start sourcing locally can get ahead of their competitors by identifying worthy local suppliers and creating trade relationships that can work to their advantage.
Improve Environmental Impact
In more ways than one, manufacturers sourcing locally also helps the environment, both around them and around the world.
The vast processes involved in the shipping and processing of parts from all over the world are highly detrimental to the environment, right from the use of non-biodegradable materials in some packaging products to the dangerous emissions emitted by every transport alternative used to transfer the materials as they cross borders.
The sheer fact that these processes take not just a day but several weeks to complete means there’s extended damage to the environment. This also means that a slight delay or change in plans in the packaging, storage or transporting process (which experts say is always a possibility) only worsens things.
It’s therefore not unrealistic to assume that the manufacturing industry contributes just as much to environmental destruction, climate change and all their negative effects as the worst of them.
Sourcing locally, on the other hand, lowers the emissions released by transportation during packaging and the fossil fuels (petrol, diesel et al.) employed in the process, thanks to the close proximity of maker and user.
It also cuts out delays in the delivery of items, which can only be positive for the environment. Besides, there are less expenses associated with sourcing locally, which is always good for the bottom line of any manufacturer.
It’s no surprise, therefore that many companies and manufacturers looking to contribute to environmental protection by lowering their carbon footprint choose to substitute their international providers for local alternatives.