Go Local – Go Wansbeck

by Brian Smith OBE, Managing Director of LDR Squared Ltd. and Chair of the Wansbeck Local Enterprise Growth Initiative

At a time of uncertainty I believe that there are even more good reasons to look after local suppliers but it makes good business sense too.  I am not arguing that you should go local just because you can and no business should expect a customer to place business with them because they are where they are.

What I am saying is that we need to challenge and learn from any decision when people choose to not buy local.  If the local business needs to improve then let them know so they can access support to do that.

I believe that the business case can be made to Go Local if you are prepared to think outside the box!

I have traded with businesses of all sizes across the world but often find that people fall into the trap of thinking that big is best too easily.  If you are prepared to consider the total cost of doing business when making your decisions I believe there is a strong case for buying local.

‘Cash is King’ is a term that is attributed to the very business sector that today is in turmoil.  In essence it says that it is important to have enough cash for short term purchases to allow you to run your business.  The Government has just given £50 Billion to the banks to assist them with that problem.

So how does buying local help?

Well it is estimated that we throw away £20 Billion worth of food every year in the UK.  That is 40% of the cash the Treasury has just made available in capital to help the banks. 

The average family throws away £420 worth of food that could have been eaten.  “Waste not want not”.  We all have food in the fridge or freezer just in case we need it.  We can now buy from stores at the end of the street or who are open 24 hours.

The best performing businesses carry low levels of inventory or stock.  What is the point of having stores full of materials you are not going to use for weeks or months ahead? 

If you have a local supplier who understands your requirements they can deliver when you need it not when you think you might need it. 

Paying them on time or even early has other real benefits. 

To start with no supplier worth their salt will want to throw away that kind of relationship.  As a result you can be assured the shortest lead time, the best quality, good after sales support and a positive attitude to change when you want to introduce new products or services.  Internally, your employees are not fielding calls from people who have not been paid, morale improves and they can turn their efforts to things that add value to your business.

Businesses in China are throwing products away because they have gone out of fashion or there is a downturn in demand.  We have seen what can happen if it is necessary to recall products from the shelves if there is a problem.  It can be much easier to manage in smaller quantities with local suppliers if you look at the total cost of doing business.

Introducing new products or services to test the market is easier and faster if you have a partnership with your suppliers.