How one workforce was optimized, diversified, and economized.
By Bruce Morton
Our customer, one of the world’s largest automakers, traces its roots back to 1908 and employs 235,000 people, with thousands of contingent workers providing services at hundreds of facilities across the United States on any given day. Using nearly 100 suppliers to support these vast contingent workforce needs, the customer’s objectives are several-fold for a workforce management solution:
• To gain awareness of contingent
workforce usage, fluctuations,
and spend and to use such information to make strategic business decisions;
• To obtain control over contingency
spend and maximize the investment of those dollars;
• To improve the quality of staffing
supply chain performance; and
• To mitigate risks associated with the
use of contingent workers.
In 2002, Allegis Group Services (AGS) was awarded a master vendor contract with responsibility for administering the procurement and management of contract workers for our customer’s U.S. operations. In late December 2006, AGS’ strong relationship with the customer was again reaffirmed with the awarding of a five-year contract extension to continue as their managed contract services provider. In 2009, AGS was awarded an expansion opportunity with the customer‘s business in Canada.
AGS’ customized and comprehensive workforce management solution includes various components:
• Customized, integrated web application (Allegis System) for streamlined automation of all staffing requests and systems integration;
• Dedicated, experienced program office to serve as single point-of-contact for customer and staffing supply chain, and program, user, contractor, and supply chain support;
• Policy and procedure standardization;
• Standardized job descriptions, bill rate structure and management;
• User and supplier training;
• Contract employee on-boarding and off-boarding;
• Candidate screening, drug screening and background checks;
• Supply chain management (vetting, agreements, compliance, and quality performance management);
• Program performance tracking and reporting;
• Performance-based service level agreements;
• Minority supplier development and mentoring program; and
• No-cost program model.
Through the Allegis System, an automated and integrated online workforce management tool, our customer is able to analyze which areas of the business use contingent workers, when, and for what purpose. They can also provide accurate contingent workforce usage and spending reports to management. In-depth reporting enables the customer to make intelligent use decisions, forecasts, and contingent workforce plans.
The dedicated AGS program office facilitates all processes associated with the supply chain including supplier vetting, agreement management, compliance and insurance auditing, and performance management. The program office continually monitors supplier performance, reviews performance levels with them, and works with suppliers to increase the quality of their services.
In 2007, AGS worked with our customer to implement a supplier optimization program in an effort to improve cost savings and overall efficiency. The optimization of suppliers resulted in:
• Increased minority-owned supplier spend by $6.2 million annually;
• Five of the top eight suppliers in the program are minority-owned;
• Optimized 85 suppliers;
• Transitioned 607 contract workers;
• Estimated yearly cost savings of $1.1 million;
• Higher quality supply base;
• Cost avoidance / cost savings;
• Improved contract worker quality and retention;
• Avoidance of long-term contract worker disruption;
• Flexible supply base; and
• Total project timeline of eight weeks.
Supply chain optimization is a contributing factor to the program’s higher-level performance. Through ongoing performance management, AGS has been able to identify the top performing suppliers and maximize supply chain operations.
PERFORMANCE AND SAVINGS
Guaranteed performance levels have continually improved in the program. Over the life of the program, the following performance has been achieved:
• Saved more than $21.5 million since 2003;
• Successfully filled nearly 7,000 positions;
• Kept failure-to-start rate at less than 3.3 percent;
• Screened out 333 candidates due to drug or background failures;
• Screened out more than 10,000 candidates who did not meet client criteria for placement;
• Kept first-time quality rating consistently above 98 percent;
• Reduced cycle time to .58 days;
• Increased minority market share 5.6 percent in four years; and
• Consistently maintained “overall manager satisfaction” ratings above 4.5 (out of possible 5).
Beyond performance gains, AGS’ program realizes significant cost savings enterprise-wide. Direct savings from bill rate management have cumulatively saved our customer $21.5 million. Valuable indirect savings have also been realized in the form of process automation and efficiencies, program support, and quality as a result of continual supply chain performance improvement. The value of the program’s cost savings are magnified when put in perspective of the no-cost program model that required no investment on the customer’s behalf to develop, implement, and support.
Risk was likewise reduced. By successfully screening out 333 candidates due to drug and background check failures and more than 10,000 candidates who did not meet client-specific placement criteria, the work environment and intellectual property remain safe and secure.
Finally, on the diversity front, AGS uses a mentoring approach to minority-owned supply chain management, whereby we strive to assist the supplier with process, procedure, and operations performance improvement. Minority market share has continued to improve. Our year-to-date minority market share is 19.1 percent.