
Proportion of local suppliers
Proportion of a company's suppliers that are based locally.
Praxisbeispiel
A retailer tracks this KPI to assess its support of the local economy.
Proportion of a company's suppliers that are based locally.
A retailer tracks this KPI to assess its support of the local economy.
The proportion of local suppliers is not only a key figure for analyzing a company's own sources of supply, but also reflects its commitment to the regional economy. A high proportion of local suppliers can be seen as an indicator of support for local jobs and the promotion of regional infrastructure. Companies that give preference to local suppliers can also benefit from shorter transportation routes and the associated cost and time savings.
There are several benefits to choosing to work with local suppliers. Firstly, companies promote the local economy, which also leads to a positive reputation in the community. In addition, being close to suppliers often results in a faster flow of communication and easier adjustments to requests or special requirements. Ultimately, this can also increase flexibility in procurement and offer the opportunity to check the quality of products directly on site.
When companies support local suppliers, they not only strengthen the economic basis, but also contribute to improving the quality of life in the region. Local suppliers are often more integrated into the community and are more involved in social projects. This commitment can have positive repercussions for the company itself, for example through an improved corporate image and greater customer loyalty.
Sourcing from local suppliers also has a significant environmental impact. Less transportation means not only lower transport costs, but also a reduced carbon footprint. Companies that rely on local suppliers help to reduce their environmental impact by minimizing the number of transport trips. In addition, local products are often fresher and more environmentally friendly, which also benefits the end consumer at the end of the value chain.
Another important aspect is the shortening of delivery times. Local suppliers are able to respond more quickly to demand as they are geographically closer. This is particularly advantageous in dynamic markets where quick adjustments are required. Reducing waiting times can also improve the efficiency of a company's internal processes and therefore increase customer satisfaction.
Despite the many benefits, there are also challenges when integrating local suppliers. They often do not have the same capacities or resources as larger, international suppliers. Companies must therefore carefully consider the options available and, if necessary, invest in collaboration to achieve the necessary standards. This can take additional time and effort, but is often a worthwhile investment for long-term partnerships.
A key aspect of success when working with local suppliers is building long-term partnerships. This requires investment in maintaining relationships and a willingness to work together to find solutions. Close collaboration can not only improve the quality of the goods supplied, but also encourage innovation that benefits both parties.
Pricing is another relevant factor to consider when deciding on local suppliers. While local products may seem more expensive, the total cost across the entire supply chain should be considered. Often, savings on transportation costs, warehousing and even possible returns can offset the higher prices and ultimately provide a financial advantage.
Companies that buy locally can emphasize this in their marketing. Supporting the local economy can be used as part of the brand identity and attract consumers who value sustainability and regionality. This aspect can contribute significantly to a company's visibility and increase customer engagement. Clear communication of commitment to local suppliers can be used effectively via social media and other channels.
The tendency to favor local suppliers is expected to increase in the coming years. Sustainability, environmental awareness and social responsibility are gaining in importance, which is why companies are increasingly aiming to make their value chains more regional. This development not only offers opportunities for local suppliers, but is also forcing traditional companies to rethink their strategies and adapt to the new market requirements.
In summary, it can be said that the proportion of local suppliers plays a central role in corporate sustainability. The benefits of working with regional suppliers - whether environmental, economic or social - are manifold and cannot be ignored. Companies that integrate these aspects into their supplier strategies not only advance themselves, but also their entire region and lay the foundation for a sustainable future.
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