Relocating and re-industrialising

What responsibility does the Purchasing function have?

At a time when France's trade balance has never been so unbalanced, threatening national sovereignty, and in the face of the climate emergency, it is now the responsibility of companies to ask themselves the question of relocation. At the heart of these concerns, the Purchasing function must use these issues as an opportunity to rethink its business model and transform itself for the long term.

Relocation, reindustrialization: what are the realities behind these terms?

By relocation, we mean the fact of repatriating in France or in Europe, a production or purchases yesterday delocalized. It is therefore a question of stopping or limiting production and purchases abroad when the equivalent can be found on the spot. Finally, relocation involves defining the production that will be relocated in a sustainable way, and that will not be relocated again in the future. Thus, relocation is intimately linked to reindustrialization.

In 2020, PwC and the NAC identified 58 product categories that are suitable for relocation. Out of 250 billion euros of goods imported outside the European Union, nearly 115 billion euros could be the subject of industrial relocation, in critical purchasing families and with high economic development stakes (health, agri-food, electronics, etc.). Through its France Relance or France 2030 funding programs, the French government supports the reindustrialization of French companies through the relocation of strategic activities.

CSR, the key to relocation

Yesterday, encouraged by consumer demand for more responsible consumption, it is now the search for greater sovereignty and the climate emergency that precipitate the movement. While the inflationary context and supply shortages have complicated the day-to-day life of the Purchasing function, CSR issues are becoming a strong marker that accelerates the phenomenon of relocation and guides decision-making. With it, CSR tackles issues of reputation, ethics, environment, and the function is permanently transformed in its approach. CSR has become a real driver of business transformation and the Purchasing function is no exception: proof of this is the growing number of companies that are committed to a responsible purchasing approach. While the search for performance remains the number one element that must guide the purchasing policy, the corporate social and environmental responsibility becomes a must have and not a nice-to-have.

The Purchasing function, the engine of change

In essence, the Purchasing function plays an essential role in the company’s external commitments, through relationships with suppliers and partners. However, the ecosystem initiated by the Purchasing function must now be evaluated in terms of the partners' CSR commitments, these commitments must be valued and perceived as a guarantee of performance. The increasing number of CSR regulations and incentives (Loi Sapin II, ISO standards, Taxonomy, etc.) engage companies in this virtuous approach, but the Purchasing function plays a key role in the dynamics.

At a time when CSR is becoming predominant, relocation and reindustrialization are two major challenges for companies. The Purchasing function must take its responsibilities in the process, in particular by engaging in intra-sector collaborations with its partners.

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