MSP Supply Base Rationalization

MSP Supply Base Rationalization

How to Create a Career Map (1)

As organizations grow, they tend to use more suppliers. Eventually, the result is an overburdened contingent worker (CW) program and a tedious cycle of eliminating non-preferred suppliers.  Effective management of your vendor base requires resources proportional to the size of the supply base. The more suppliers, the more costs you incur. According to The Hackett Group, “It costs roughly $700-1,400 in internal costs (i.e., labor, outsourcing, technology and related overhead) to source each supplier, set it up in an internal system, transact with it, and manage the relationship on an ongoing basis.”

When you work with an overburdened CW program, you don’t get clear reporting. That makes it tough to track quality and delivery performance.

Organizations are increasingly utilizing flexible resource as a way of delivering their strategic objectives. This trend is set to continue with many analysts indicating that as much as 50% of a company’s workforce will be non-employees by 2025. An organization’s ability to scale its workforce and secure specialized talent when and where needed is critical in the ever-evolving skills market. But of course, this is easier said than done.

Here are a few of the common challenges we hear from HR directors, procurement managers and executives:

  • Managers from across the business are hiring contingent workers directly or through local suppliers – They have little visibility to ensure supplier pricing and contractor pay is consistent.
  • There are no consistent processes or systems across their organization which creates inefficiency and puts them at risk of non-compliance.
  • There is a lack of visibility and control over the quality, utilization, or cost of their contingent workforce.
  • They have problems with their supplier relationships and retention of contingent workers.
  • Understanding that contractors are crucial to the success of their business, but they struggle to attract the volume and quality of contractors that are required.

If these problems sound familiar, you are not alone, and the good news is, we can help. We can provide solutions which are tailored to the challenges your organization faces which will help you to gain control and create efficiency and visibility.

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