The Benefits of Local Sourcing: Supply Chain Control (2/5)
In the first of our series of blog posts highlighting the advantages of regional sourci...
In the first of our series of blog posts highlighting the advantages of regional sourcing, we will explore how localization gives businesses a greater degree of control over their supply chains. We specifically want to examine how a greater degree of control ties into our vision of a circular economic model, and how this can also be a competitive advantage.
While global supply chains can provide low-cost alternatives for raw materials and production, they can also be very inefficient when it comes to implementing sustainability measures. Companies that utilize global supply chains made up of multiple tiers of suppliers and manufacturers can become so disconnected that they do not know who their specific suppliers are or where they are located. Businesses need to recognize that they can have a much greater influence within their local communities compared to a supplier halfway around the world.
This raises an important question for businesses to consider when establishing a supplier network, because if you don’t know exactly who your suppliers are or where they are located, how can you be sure they are practicing the same sustainability measures that are true to your company and community’s values? After asking ourselves similar questions, we have concluded that if a company is truly concerned about sustainability and striving for circularity, it is increasingly crucial that they utilize regional suppliers and distributors as much as possible. The further away a business is from its suppliers and community, the less likely they are to make enforcing sustainability practices a priority because it often does not hit close enough to home.
The ability of a business to have influence within their network of suppliers, manufacturers, and distributors ties directly into the concept of a circular economic model. We discussed how people care more when the issues are closer to home, and it is the same phenomenon with business partners as well. If the impact of a supplier’s actions is felt locally, their conduct becomes much more important to the business that utilizes that supplier, and the community the business operates in. It creates a chain reaction up and down the supply chain in which company policies and conduct suddenly matter much more because there is a tangible impact that all invested parties recognize.
The ability to influence supplier policy has also become more important as sustainability has risen to prominence because consumers are beginning to hold companies responsible for the conduct of their entire supply chain. Apple, for example, received a significant amount of bad press when reports came out regarding inhumane treatment of factory workers in China. Consumers responded very negatively when a watchdog went public with reports of issues at Apple factories that included accusations of forced labor, exposure to chemicals, and the general exploitation of labor laws.
Creating a regional supply chain doesn’t guarantee that a company won’t have to deal with ethical issues regarding suppliers. However, we believe that having a significantly closer relationship and ability to work with our suppliers helps us to ensure that sustainable practices are being implemented, which ties into our overall vision of a circular economic model. Localization and utilizing regional suppliers and manufacturers as much as possible is critically important to this vision because we have seen that the closer a company is in proximity and values to its network of suppliers, manufacturers, and distributors, the greater level of awareness there generally is. At Sana Packaging, for example, we have tried to keep these principles in mind and have been very intentional when creating our network. We have made it a priority to ensure that our supply chain, in addition to our products, represents our company values of sustainability and circularity.
Written by: Galen Kuney, Sana Packaging Intern