Localizing the Supply Chain

Localizing the Supply Chain

March 24, 2022 Blog

­­Multinationals around the world are acquiring customers by developing products and campaigns that appeal to their communities. As the market becomes more global, brands need to consider the logistics of selling their products worldwide. Global success begins and does not end with the number of product variations a company can offer. Rather, it relies on managing the supply chain to provide the right product and customer experience for each market targeted by the brand. Localizing the supply chain ensures creating more authentic experiences to developing products with unique local appeal.

Localizing the supply chain

Currently, consumers expect their orders to be fulfilled at high speed and at low costs. Due to the fierce competition in the market, on-demand delivery has quickly become a differentiator. Same-day delivery was unheard of. Now, it is just one of the “add-ons” many consumers expect today. However, most supply chains struggle to provide even next-day delivery. Therefore, supply chain localization has become very popular in the fast commerce market.

To speed up execution options, you need to move your supply chain to a local level. In the past, inventory and delivery management were local, but today supply chain leaders fulfill orders from local stores. This method has many advantages, including the ability to access local supplies on an as-needed basis.

When and How to Localize?

The right balance is important when considering aspects of the business that need to be localized. We make enough adjustments to appeal to the local market, but not so much that the brand is unrecognizable or costly. It’s important for businesses to know what to aim for when localizing. Localization is not just about changing product offerings. From employee uniforms to store layouts to marketing strategies, you can change everything and make it feel like a place for shoppers to live.

When it comes to supply chains, localization can be placing manufacturing centers and other extended supply chains closer to the target market.

Case in Example:

One of the leading international smartphone brands captured the Indian market by doing just this. When the launch of mobile phones in India was announced in 2015, more than 100,000 people pre-ordered. However, due to the demand-driven manufacturing model, it had only 10,000 units available at the time of its release. When they took advantage of the country’s tech-savvy youth market, they clearly had a major problem to solve. To increase production, the company built a distribution center for e-commerce in Bangalore. The localized distribution strategy finally interrupted other startups in this area and helped to acquire brand recognition. It is now India’s no. 2 smartphone brand.

What are the benefits of Localizing the Supply Chain?

Smaller and Shorter is better! The coronavirus pandemic has changed the world forever – in many ways. How businesses operate and how consumers buy and get the goods and services they need. Around the world, supply chains have been negatively impacted. Factories cannot get the raw materials they need in the time it takes to produce enough goods to meet demand.

Organizations that rejig and reduce geographical space between them and their suppliers are also going to become stronger. Localizing the supply chain does more than help you weather storms like the pandemic. Let’s look at some of the clear benefits.

  • Helpful for the Local market, towards Job creation
  • Predictable Delivery Times
  • Lower Costs- Less Cash tied up in Supply chain
  • Environment Friendly
  • Higher Visibility

Besides Covid Crisis, the current Ukraine-Russia geopolitical face-off is further hampering supply chains. Raw material for Steel along with gas, petroleum, and many agriproducts which we import are affected. Hence it further pushes and supports government initiatives to be Self-dependent (Atmanirbhar) on local supplies instead of global supplies.

-Anil D Yadav

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