Lisa Anderson was quoted in an article on the American Express website discussing why local sourcing can help benefit your business in a big way!
As risks multiply on the world stage and with increasing economic and logistical disruptions, a local supply chain will prove critical for most businesses, according to Lisa Anderson, an expert in manufacturing and supply chain management and president of LMA Consulting Group, Inc.
Local supply chain sourcing, she says, improves efficiency and quality control by enabling quicker responses to customer needs, optimizing production processes, reducing waste, and increasing operational efficiencies between manufacturers and distributors. Below are more advantages, with insights from owners of two growing businesses, and ways that sourcing local can help benefit your business in a big way.
1. It Gives You Greater Control Over Your Materials
Through simple local sourcing and networking, Kim Talebi sought out local farms and foragers for ingredients. The Minneapolis-based CEO and owner of Kaskaid Hospitality – which owns and operates The Butcher’s Tale and other restaurants and catering businesses across the U.S. – loves having access to farm-fresh tomatoes and other produce all year long through working with a local greenhouse. “This makes a huge difference versus using mass-produced, under-ripe tomatoes shipped from South America in the wintertime,” she says.
2. It Reduces Minimum Buys
When you have a local supplier, you can reduce minimum buys because you eliminate the need to fill a container ship, train, or truck. Shipping can be less expensive when your product is being delivered from a local source, so you can offer better prices to customers due to minimized transportation costs and optimized production runs.
3. It Allows for More Flexibility
“For my handbags and jewelry, I work with suppliers and manufacturers based in New York City, which is only a two-hour drive from my studio in upstate New York. I can travel to the city as needed to meet with my factory contacts in person, as well as source materials,” says Emily Li Mandri, founder-designer of MLE. The company’s statement accessories have been sold by high-end U.S. retailers and are carried in more than 200 stores worldwide. “I can make the decision to go the same day if I need to; it’s really nice to have that kind of flexibility.”
4. It Reduces the Pressure to Offer Discounts
Since local suppliers can respond to changing conditions more quickly, less inventory may be needed in the end-to-end supply chain. The inventory required to cover for volatility will likely be less if the supplier and manufacturer can work together on win-win solutions to increase agility and flexibility, according to Anderson.
5. It Means a Win-Win for Supplier and Customer
“Local suppliers provide a distinct advantage in getting products to market faster. Product development designs and trials can be done collaboratively for rapid prototyping, testing, and trialing. Additionally, the feedback loop can be direct, speeding up the entire process,” says Anderson. “As problems arise, the appropriate resources can be brought together rapidly to collaborate and overcome bottlenecks. Thus, the new product lifecycle can be dramatically shortened, incorporating additional customer feedback and generating greater growth and a smoother product launch.”
To read more, click here.
Originally published on the American Express website, September 12, 2023