One of the new buzzwords that many people are talking about is Impact Sourcing. It is about looking at ways business decisions can help to alleviate worldwide poverty.
Impact Sourcing is part of the Business Process of outsourcing; it looks at how a company can employ socially economically disadvantaged employees as their principal workers. Impact sourcing is about companies actively looking at making a difference or impact to help alleviate poverty.
An advantage of Impact Sourcing is that vulnerable employees can usually earn more than they would in their present job; this extra income impacts their families and livelihood.
What is Impact Sourcing?
Impact sourcing is also also known as socially responsible outsourcing. Impact sourcing refers to the part of the business process outsourcing (BPO) that employs socially economically disadvantaged people as principal workers within the business process.
For example, at Mondoro, we seek to work with companies that employ women or are owned or operated by women. We also seek to find people as our stakeholders who are smaller-scale businesses.
We do this as we feel this can significantly impact our sourcing, development, and our business model.
Impact sourcing is about companies finding workers from poor, vulnerable, or underutilized communities and having them perform lower or moderate skilled work. This can include essential office work such as scanning documents, data entry, or other office work.
But it can also include seeking out and working with communities, countries, and companies that can help you have a global impact.
Impact sourcing has broad support among many people as they see this as a way to help alleviate poverty and help with the worldwide gap between the rich and poor. Impact sourcing is about how to help support core activities that will further support a reasonable, sustainable livelihood among poor and vulnerable populations of the world.
This is not just helping people who are living overseas or in another country, but it can also be about employing vulnerable people in your community.
Impact Sourcing and Poverty Alleviation
Impact sourcing is seen as one of the tools to help with poverty alleviation. It is shown to have the potential of creating billions of jobs for the young, vulnerable, and those living in poverty.
It is a relatively new way of thinking about poverty alleviation, so there have not been that many studies that have taken place about the effects of Impact Sourcing. But what many have seen is that Impact sourcing has had a positive impact on many aspects of the well-being of workers and their families.
A recent study has indicated that with proper Impact sourcing, many employees in this lower and vulnerable class have seen an income increase anywhere from 40 to 200%. This, of course, has had a massive impact on their families and their daily life.
For many of these families, it has been the difference between whether or not they can eat, have a place to live, and send their children to school. As I have said many times, many poor and vulnerable parents want their children to go to school; they realize that education is the way their children can get out of poverty. But for many of these same families, when they live below the poverty line, they need their children to help work and earn an income.
Impact sourcing can help with this since if the parents can receive some training and get a higher-paid job, they can also help support their families better. Their children can also continue to attend school and fget an education.
One of the aspects of Impact sourcing is that companies look at alternative areas for their sourcing. In other words, maybe they find workers or products in a smaller city or rural towns. Often, this gives them a new pool of affordable and qualified workers than what they find in the major cities.
Impact sourcing is not just about finding workers in major cities, but also about finding qualified workers in smaller cities and towns. It may mean that a company may need to set up its operations in a smaller city or town than a larger one.
Challenges of Impact Sourcing
There are still a lot of challenges with Impact Sourcing. The most obvious is whether or not these vulnerable and poor communities can perform the task as well as in other parts of the world.
In other words, a company may end up having to pay more for less work getting done. This, of course, cut to the company’s bottom line and overall productivity and efficiency.
A company may not find the skills they need to locate in a smaller or a rural community. They may find that they need to import workers, and many of the workers they need to import may not want to live in those communities. This, of course, is a reality of Impact Sourcing.
From a product sourcing aspect, manufacturing and producing products in some rural areas may cost you more than making them where you presently are. It may cost you more to get in the raw materials, supplies, and other things that you need to effectively and efficiently produce your products.
Things as shipping costs or transportation costs can also make the product less competitive even if you can produce a cheaper product; if your transportation cost is more, it may end up being more expensive than if you produce it where you presently are.
Impact sourcing needs to make sense for the company. It will become an issue of cost, quality, and even the quantity they can receive. In the supply chain, especially those in the global supply chain, there are so many variables that can make a difference in whether Impact sourcing is worthwhile.
At Mondoro, we believe that every company should be socially responsible and look for ways to make a difference in the lives of the less fortunate. We strive to ensure that wherever it makes sense that we do it with Impact sourcing in mind.
If you are interested in seeing how Mondoro can help you – we would love to talk to you to see how we can help you.
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What Are The Major Benefits Of Strategic Sourcing?
Never underestimate the proper use of the strategic sourcing process in your supply chain. Strategic sourcing is a significant benefit to all stakeholders within the supply chain. Strategic sourcing forces all stakeholders to look at the supply chain strategy in detail. Strategic sourcing helps to eliminate any potential risks or problems.
You can discover more by reading What Are The Major Benefits Of Strategic Sourcing? by clicking here.
Seven-Step Strategic Sourcing Process Explained
A seven-step strategic sourcing strategy process will help companies be successful when looking to procure a product or a commodity. If companies take the time to go through each of the seven steps, this will help them to ensure they are successful with their sourcing needs.
You can learn more by reading the Seven-Step Strategic Sourcing Process Explained by clicking here.