The advantages of local suppliers have always appealed to manufacturers that care about their communities, their sustainability, and their role in building networks that support small and local businesses.
Pandemic-induced bottlenecks and other disruptions revealed global supply chain vulnerabilities that point to the potential benefits of a local sourcing strategy.
At the same, many original equipment manufacturers (OEMs) in the United States face barriers to securing local suppliers. It’s not as easy as walking over to a nearby vendor and asking for a handful of mechanical components or raw materials. In fact, a lack of local options is one reason many OEMs maintain complex global supply chains.
And yes, cheaper pricing of offshore goods drives international sourcing, too.
But the recent resurgence of U.S. manufacturing is prompting many OEMs to take a second look. Manufacturers point to volatile prices, disappointing quality, and unreliable delivery from offshore suppliers among reasons for reshoring supply chains.
According to Thomasnet, 83% of manufacturers said they intend to find North American suppliers in 2021 — up from 54% before the coronavirus lockdowns of 2020.
This is great news for regional suppliers that may struggle to attract the attention of OEMs. If you’re using inbound marketing to attract marketing- and sales-qualified leads, you’ll want to highlight the benefits of local sourcing in your content, including blogs, emails, white papers, infographics, video, and throughout your website.
Remind OEM prospects of the following ways you can add value to their supply chain:
Local Sourcing Can Improve OEM Speed to Market
In the manufacturing world, time is money. It often takes a minimum of two weeks to ship parts from foreign countries, assuming there are no delays in ports or customs on either end. Recent events made clear that anything from a viral pandemic to a stuck cargo ship can cause major trouble.
Language barriers can also be an issue in some cases, leading to misunderstandings and delays. As a local supplier, you’re strategically positioned — geographically and operationally — to help OEMs launch products faster, improve their speed to market and maintain a competitive edge. You can help customers trim lead time, shorten delivery times, and improve the bottom line.
OEMs Get Greater Control With Local Suppliers
When a supplier is relatively nearby, it’s easy for buyers to stop in for a site visit to monitor quality assurance programs and process controls, or to evaluate a production facility firsthand. This level of access and oversight can give manufacturers greater confidence and peace of mind, and can help keep those geographically close suppliers top-of-mind.
Maintaining Ethical Integrity
The cost of labor in many foreign countries can be cheap — at least in terms of dollars — but those savings come at a price. Poor labor practices, low standards for environmental protection, organized crime, and corruption are all concerns that demand ethical scrutiny when selecting suppliers. Manufacturers should consider how their sourcing decisions align with their culture, mission, and brand.
Accurate Budget Forecasting
Price-driven outsourcing can have unanticipated costs that chew away at profit margins. Countless administrative, regulatory and international legal considerations including currency exchange rates, tax implications, shipping and fuel surcharges, lawyer fees, travel expenses, and more can fluctuate wildly.
The effects of tariffs can also be unpredictable. Uncertainty surrounding renegotiations of trade agreements adds to the possibility of future price increases and raw materials volatility. Manufacturers are smart to establish relationships with local suppliers in anticipation of changes — and your marketing content can provide information to help them recognize the issues and build robust and responsive supply chains.
Reputation-Building and Public Relations Opportunities
When a manufacturer supports jobs in a community by using a local supplier, it’s a major benefit for workers and families living in the area, and it can boost the economy. That creates local PR opportunities for both supplier and manufacturer, and can even have recruiting value for your companies.
Depending on the size of the company and the market, it’s not unusual to make the local TV news or grab front page headlines of the regional newspaper. Investing in local communities is always a win. When there are jobs tied to that investment, the benefits are far-reaching. That can get people talking in a positive way about your business.
A Local Source Can Be a True OEM Partner
Most local suppliers have a pulse on the manufacturing market in their region and can better anticipate customers’ needs.
Position yourself as more than an order taker; make sure you demonstrate the value of being a trusted partner and working together to get the results the OEM is looking for.
This is especially important as you address the perceived disadvantages of local sourcing — in particular, the expectation of higher costs, but also concerns about how quickly your company can scale up production if needed. Delivering value to your OEM customer is more important than ever.
Does your company’s design or engineering expertise improve quality to help customers gain a competitive advantage? Can you play an integral role in research and development? Can your suppliers offer reliability and quality assurances that overseas competitors can’t provide?
Maybe you can arrange smaller production runs to accommodate changing needs and improve speed to market. Can you deliver warehouse components and materials more frequently to free up OEM floor space and help with customers’ inventory control?
Aside from operational details, consider ways your business can partner with customers to align your missions and cultures, and collaborate on events and initiatives that have a positive effect on local communities.
Demonstrating your company’s value needs to take the focus beyond price to overcome assumptions about disadvantages of local suppliers. If your company is essential to local supply chains, you need a robust inbound program to attract world-class manufacturers and demonstrate your company is capable, professional and competitive.
From product development and operations to logistics and collaborative marketing, you have a deep well of potential topics to leverage in your inbound efforts and fill your editorial calendar with rich content.
Whether you’re a supplier or an OEM looking to strengthen and grow your business using an inbound approach, our Ultimate Content Creation Guide puts all the checklists and templates you need right at your fingertips. Develop buyer personas and create content that speaks to their concerns, from emails and infographics to sales enablement tools like case studies. Just click the link below to download your copy.