Retail giant Shein & Co. setting prices, yet some corporations persist in relying on domestic manufacturers
In the rapidly evolving world of business, companies are increasingly turning to local sourcing as a strategic advantage. This trend is particularly prominent in Europe, where the economic benefits go beyond just production costs.
The European Union's stringent guidelines ensure a significantly lower liability risk for manufacturers, making the continent a reliable choice for many businesses. This is according to Margot Königshofer, the founder and CEO of Procfit GmbH, a company specialising in building and optimising supply chains for startups, young entrepreneurs, and online retailers. Procfit GmbH has successfully managed over 800 projects and boasts a network of 70,000 suppliers.
One area where Europe outshines Asia is in the cost of producing a fitness product's packaging. The cost, including transportation, is lower in Europe (8.38 euros) compared to Asia (9.91 euros). This cost-saving, coupled with the environmental benefits of reduced transportation distances, aligns with companies' sustainability goals.
Local sourcing offers several strategic advantages. Faster lead times and agility, thanks to local suppliers, are crucial for agile industries like fast fashion or custom manufacturing. A lower logistics and carbon footprint, better supplier communication and transparency, cultural and time-zone alignment, support for local economies, and enhanced brand reputation and consumer loyalty are other key benefits.
The shift towards local sourcing is driven by factors such as supply reliability, image, and control over one's own value chain. Industries such as food, cosmetics, furniture, textiles, packaging, and plastic parts are increasingly focusing on production in Europe due to competitive prices and high quality standards. Companies in Europe offer stable business relationships and traceable processes compared to Asian producers.
Customers often receive their goods within a few days due to short delivery times in Europe. This speed, combined with the strategic advantages mentioned above, makes local sourcing an attractive option for companies seeking to enhance their supply chain resilience and brand reputation.
However, for many companies, a hybrid sourcing strategy (combining local and global procurement) is becoming more common. This approach leverages the cost benefits of global sourcing while maintaining the reliability and agility of local suppliers.
The shift towards local sourcing is influenced by the Overton window, a model from political analysis, which is now shaping the economy by shifting the boundaries of what is considered sensible and justifiable in production and supply chains.
For more information about Procfit GmbH and their comprehensive service package for procurement and supply chain setup for businesses, visit their website at [https://www.procfit.at/](https://www.procfit.at/). Margot Königshofer can be contacted via email at [[email protected]](mailto:[email protected]).
References:
[1] Procfit GmbH. (n.d.). Advantages of local sourcing. Retrieved from [https://www.procfit.at/en/advantages-of-local-sourcing/](https://www.procfit.at/en/advantages-of-local-sourcing/)
[2] Procfit GmbH. (n.d.). Why local sourcing is becoming popular. Retrieved from [https://www.procfit.at/en/why-local-sourcing-is-becoming-popular/](https://www.procfit.at/en/why-local-sourcing-is-becoming-popular/)
[3] news aktuell. (2022, March 1). Procfit GmbH: Local sourcing offers strategic advantages. Retrieved from [https://www.news-aktuell.de/wirtschaft/procfit-gmbh-local-sourcing-bietet-strategische-vorteile-41007856](https://www.news-aktuell.de/wirtschaft/procfit-gmbh-local-sourcing-bietet-strategische-vorteile-41007856)
The lower cost of producing fitness product packaging in Europe, compared to Asia, aligns with companies' sustainability goals in the finance sector. Euope's reliable business relationships and traceable processes in manufacturing make it an attractive choice for businesses in the sports industry.
