A client’s supplier sourcing had ballooned. Its contingent workforce management needed recalibration.
By Steven C. Hinckley
The client was the largest bank holding company in the United States, with more than $150 billion in revenue. The institution counts more than 6,000 U.S. branches and has operations in more than 150 countries.
A long-time Adecco Solutions managed services program (MSP) client, the customer had undergone a series of mergers and acquisitions that saw the supplier base supporting its technology positions expand to include more than 400 suppliers. The newly acquired companies had disparate and inconsistent practices relating to their supplier sourcing. In many cases, hiring managers needed to engage each supplier individually, leading to process inefficiencies, non-standard deliverables and frustration at having to deal with aggressive sales people from hundreds of companies, each with their own agenda.
Furthermore, the client had limited visibility into the performance of the supplier community, as the acquired organizations and their suppliers did not track comprehensive spend and usage information.
Additionally, the established rate cards were very broad, both in terms of scope and geographic reach. The rate cards had a limited number of “catch all” job titles that were too general to produce the quality and caliber of candidate that was required. They were also organized by large regions wherein supplier rates varied greatly by city and municipality, meaning the rate cards did not accurately reflect high or low-cost locations within a given region.
The client also wanted to ensure the inclusion of Minority and Women owned Business Enterprises (MWBE) with a minimum diversity spend of 18 percent.
Looking to improve the quality, performance, and diversity of the technical supplier community while realizing significant return on investment (ROI), the client turned to the MSP to evaluate and streamline the burgeoning supplier base and seamlessly integrate it into the incumbent MSP/VMS solution.
FIVE-PHASE FIX
In order to optimize the supplier community and the requisition and order process, Adecco Solutions used a five-phase methodology that included the following components:
Defining supplier strategy. Adecco Solutions standardized the rate cards by city, as opposed to region, in order to more accurately reflect the operating environment. Orders were to be placed based on skill specialty, geographical presence, and proven performance. We also established a pipeline for Minority and Women-owned Business Enterprise (MWBE) suppliers and, through communication with the supplier base, Adecco emphasized the need for an approach based on performance and quality, transitioning suppliers from a sales focus to an operational focus.
Identifying business requirements and drivers. Adecco Solutions worked closely with the client to identify the main drivers for consolidation and confirm the overall strategy and approach. Recognizing the MSP’s success hinged on the strength of the relationship between the client and its staffing partners, the expectations for the program were co-delivered by the client and the MSP management team.
Conducting a supplier profile and assessment. The MSP team held supplier meetings in order to ascertain basic company information, contractual obligations, and the geographic and skill capacity of each supplier. This information was then compiled and reviewed in order to establish a plan for going forward.
Completing a supplier gap analysis. This thorough assessment of operations examined volume, spend, and other metrics across all locations and the suppliers supporting them. The results showed that there were too many suppliers, while critical locations were not being serviced adequately. Overall, the analysis emphasized the need to eliminate redundant suppliers across geographies and skills, while maximizing the use of high-performing suppliers.
Establishing the supplier community. Adecco Solutions and the client developed detailed communications strategies and materials for both selected and deselected suppliers. Selected suppliers were advised of next steps for integrating with the MSP, and formal rules of engagement were distributed. Deselected suppliers were allowed to retain their contractors until their assignments were completed, minimizing business disruption for the client.
RETURN ON MSP
The results of Adecco Solutions’ initiatives were many:
• The client successfully rationalized the 400-plus suppliers down to a technical supplier base of only 35;
• The consolidated supplier community successfully supports the staffing of 3,000 contingent workers every day;
• The combination of supplier optimization and rate card management resulted in $1.2 million in overall cost savings;
• The supplier community now has a strong diversity representation with diversity spend exceeding 28 percent (well above the target threshold of 18 percent);
• The program received a quality rating of 3.7 on a 5.0 point scale (a 74 percent approval rating) from the client and a rating of 3.59 out of 5 (72 percent) from the supplier community; and
• The process and methodology used during the supplier consolidation has been recognized as a best practice by Adecco Solutions, and the client and is being used for similar initiatives.
Steven C. Hinckley is president & COO, global MSP solutions for Adecco.
Banking on Workforce Change
