I don’t usually expect to get sage procurement and operations advice from mainstream newspapers. But The Guardian recently published a cheekily titled piece that’s worth reading even for those who are deep into the procurement profession: The sharks and the bees: what nature’s patterns teach us about sourcing.
The author notes that when animals in nature “forage for food, they move in a pattern of short movements in one area combined with a few longer treks to more distant areas,” basing this observation off a recent academic research study. But what’s curious is how this observation holds significance for procurement as well.
Specifically, as the article suggests, “as commerce grows ever more global, it’s clear that – like the long treks embedded in honeybee, shark and Hazda foraging patterns – global cooperation, competition and collaboration will remain key to business. All industries, as well as all biological systems and environmental impacts, are intertwined at this point in world history – with many symbiotic advantages. But for the most part, going local is where it’s at.”
Go local. It’s that simple. And sometimes governments are even requiring it. The piece cites the case of India, which requires that “30% of multibrand retailers’ products be procured from Indian small industries.”
But regulation is not just what will drive a resurgence of supply chain localization. As we’re seeing with re-shoring and near-shoring in domestic (North America) manufacturing supply chains, there is significant advantage from a lead-time, supplier development, and general risk perspective the closer we get our extended supply chains to the customers that will ultimately consume the products produced.
Ultimately, while the author might suggest that “nature means business” in both ecosystems and corporate procurement, I’m inclined to think that it’s not a Darwinian or other evolutionary model pushing us to localize. Rather, it can be better explained by Adam Smith and the Invisible Hand. After all, markets that can exist on their own with minimal interference are likely to gravitate to what is natural and what works for the participants. And in a world where there are both direct (dollar) and indirect (environmental) costs to moving product thousands of miles before it reaches a customer, it’s pretty clear, as long as productivity improvements outpace the race to low-cost labor in cheaper and cheaper countries, that localization will be the preferred model of the future.