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Supply chain strategy
Local suppliers can be defined as suppliers that operate near to the location of the organisation's operations or business activities. It can also mean suppliers in the same country. National regulations will often require a certain percentage of "Local Content" in supplier contracts, which means suppliers that have all or a certain percentage of their footprint in the same country as the organisation. There are certain business benefits to sourcing from local suppliers, such as strengthening relationships with local communities, reducing the distance between business and suppliers and thereby transport costs and time, and contributing to local economic growth and upskilling. These factors can strengthen business resilience and reduce risks associated with global supply chain disruptions.  A general supply chain strategy can also focus on building the capacity of all suppliers, regardless of proximity to the organisation. Depending on the nature of the supply chain, an organisation can invest in business partnerships with suppliers to expand their footprint and competency, offer training directly to suppliers to build their capacity, or offer preferential terms in line with a vision for improved ESG performance and positive social and environmental impact.
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ESG Tracker Knowledge Base | 2024