Switching to a local procurement strategy requires commitment, time and a thorough consideration of business objectives. Mark Daniels, Company Director at Social Procurement Australasia, discusses key considerations, benefits and how to create a ‘buy local’ procurement agenda.
Mark has extensive experience working in social enterprises, creating life-changing opportunities for communities. He has spent the last 15 years leading and developing the social procurement sector in Australia and New Zealand. He currently works at Social Procurement Australasia where he is building a better functioning social procurement sector.
What is a buy local procurement agenda?
“A ‘buy local’ agenda means you’re preferencing local businesses and jobs and making a conscious decision to buy differently. It is a different mindset because while it still seeks to achieve the savings and risk management it also seeks to deliver something back to the broader community,” explains Mark.
“By doing this, you help create greater employment opportunities for businesses in our local supply chain and support the Australian economy by keeping money onshore,” he adds.
Why should businesses have a buy-local plan?
Buying local creates a positive ripple effect through your entire organisation. From shorter supply chains to strengthening business reputation to attracting more talent, there are many reasons why you should support local.
“As a result of the pandemic, many businesses have had to endure transportation issues and delays, and this has opened their eyes to potential vulnerabilities in their supply chains. As a result, organisations are starting to see the benefits of having onshore suppliers. Ease of access is just one. Fewer carbon emissions from freight and shipping is another,” says Mark.
“On top of that, employees are becoming more selective about who they work for. Being an employer of choice means doing good for the community. Customers are also choosing to support businesses based on their social and environmental impact.”
“Awarding contracts to local business multiplies the power of your spend in that local community. Additionally, every state has an ‘Industry Participation Policy’ which outlines state government policies to increase spend with local SMEs. They often have priority targets in contracts for local spend and set up systems that support suppliers to buy locally,” explains Mark. These policies mandate that local SMEs are provided with a fair opportunity to compete for government contracts.
How to create a ‘buy local’ procurement agenda
There are five key steps in creating a successful local procurement policy for your business.
1. Complete a supplier audit and opportunity analysis
An audit of your current business processes is a great way to gauge how many local suppliers your organisation currently supports and your level of commitment.
“Look at your major procurements and contracts that need renewal and find areas you can prioritise to increase your percentage of locally made goods,” says Mark. Tap into workplace solutions specialists like Winc who can help you identify opportunities for improvement and connect you with local suppliers. Ubiquitous office supplies like copy paper are an easy place to start. Switching to an Australian Made brand like Reflex, Mandura or Winc branded copy paper is a simple way to kick start any buy local agenda.
2. Develop a business case
After completing an audit and determining opportunities, develop a business case that outlines local procurement targets to receive support from leaders and decision-makers in your organisation. This will help build momentum.
“If your leaders are not on board, you’ll find it very difficult to implement a plan. Many organisations will have strategic objectives that relate to social and local community outcomes. If you can link your organisation’s objectives and core business goals with the development of a ‘buy local’ policy, you’ll be able to create a stronger case,” informs Mark.
“It could be linked to reducing your organisation’s environmental footprint, supporting SMEs or increasing your organisation’s contribution to local job creation. These are all social agendas which can be supported by buying locally,” Mark adds.
3. Communicate your plans
Once you have gained support from your leaders and developed a plan, communicate this both internally and externally. Ensure there’s training across the organisation so a cultural shift can occur.
“Share information to your workplace solutions provider and other suppliers about the direction your organisation has decided to take with local procurement as well as advice on how they can support these procurement goals,” says Mark.
4. Define policies and processes
“Rules are fundamentally about certain behaviours. If your policy doesn’t outline a preference for local, people won’t change the way they buy,” says Mark. By changing your policies, you can ensure certain requirements and processes are adhered to.
“For example, consider your tender documentation. You may have to change this to highlight your preference for local businesses and provide incentives.
“There are also institutional changes that can support organisations to buy locally. Including local procurement strategies which ripple through to team KPIs, performance plans, position descriptions and so on will help achieve these outcomes,” says Mark.
5. Measure and report your progress
Ensure you record your progress and achievements through measurement and reporting. “You can use ABNs and run through your finance systems to identify local businesses in your supply chain or ask your workplace solutions provider to provide this level of reporting to you. Over time you will be able to see if more money is going to local businesses and if you are creating more local jobs and other impacts in your supply chains,” says Mark.
Social impact statements are also a great way to quantify progress. These statements typically cover things such as your environmental, community and economic contributions over time as a result of your support or procurement spend.
These metrics will provide you with quantifiable results that indicate whether you are reaching the goals set out and can aid in the improvement of future processes.
Kickstart your ‘buy local’ plan by switching to Australian made alternatives for your organisation. Browse our specially curated list of Australian made products or get in touch with our team of experts to understand how we can help you create your own local procurement strategy.
Mark Daniels, Company Director at Social Procurement Australasia
