Written by Erik Sorensen Ruiz
Why buy locally?
Nine benefits of local procurement.
SUSTAINABILITY | 12.14.20
During the pandemic, consumers have tried to find new ways to purchase whilst businesses are adjusting to the new normal. Manufacturers are working hard to support and strengthen their supply chains, and companies who previously preferred to source internationally to save on costs, are now looking for other cost-effective solutions.
To mitigate the effects of Coivd-19, businesses are generally prioritising local procurement. This is a strategy that has helped many to stay in business during the pandemic as supply chains have been disrupted. Yet, the benefits of sourcing locally have only been revealed by the pandemic, which has exposed the fragility of our global supply chains. In fact, the way a company selects its suppliers and sources its raw materials has a strong impact on the environment and the surrounding community.
When it comes to Modulex, local procurement is a top priority in the way we conduct business. At Modulex Billund, we source 80% of our raw materials in Denmark and 97% within the EU. Buying locally helps us lower our carbon footprint, whilst gaining more control and flexibility in the way we engage with our suppliers.
This article would like to share 9 benefits of sourcing locally:
Good for the environment.
- Manufacturing domestically and procuring raw materials locally diminishes the volume of fossil fuels used in shipping and transportation and helps cut down greenhouse gas emissions. This is a tactic to reduce the carbon footprint of each manufactured unit without a need to modify product design.
- By working closely to our suppliers, we are able to purchase raw materials in bespoke sizes and quantities rather than standard ones which helps us to reduce our overall waste.
Support the local economy.
- Local procurement supports local suppliers by giving them means to rehire employees and create new jobs. On top of this, skills and expertise acquired from working with different buyers and projects, helps suppliers become more competitive in bidding for future contracts.
- Buying locally not only contributes to the development of suppliers, but to every other business involved in the supply chain and helps the local economy stay healthy.
Greater control, autonomy, and flexibility.
- We cannot foresee when an opportunity or a challenge will arise. Manufacturers prefer knowing what the growth pattern and availability of a product is before partnering a supplier. If a producer receives a lucrative offer from an existing customer, they will need a quick delivery to ramp up the demand. Local suppliers are more reactive than those who are far away and will be much quicker to deliver, as it is easier to ship regionally than internationally.
- Similarly, the more far away are from elements of their supply chain, the less control manufacturers have over them and the harder it is to do business. Face-to-face visits will make it easier to interact with suppliers and avoid “getting lost in translation” among big teams of people from different departments.
- Closeness to suppliers will reduce reaction times and coordinate responses when facing challenges such as the Covid-19 pandemic; this might help both companies to stay in business.
Corporate values and higher quality.
- Local sourcing will help companies cut down their supply chain ad logistics costs – these savings will translate in products of a higher quality and better design, which will in turn last longer than those manufactured overseas at a lower cost.
- By buying locally companies are able to work closely together with their suppliers making sure they hold similar environmental and social values whilst making it easier to trace the source of the raw materials.