Working with multiple staffing suppliers is tough. From different contracts and terms and conditions, to managing all the compliance and legal paperwork, it’s enough to make you consider a new career as a dog walker. But it doesn’t have to be so complicated. Enter the Secondary Supplier program. Keep reading to learn what this is and how it can make a big impact on your workforce program.
A secondary supplier program is a way to vet, process and manage suppliers quickly and consistently, ensuring compliance and elevated performance standards. This frees up time, allowing both MSP and hiring managers to focus on the prime vendors.
One of our customers, a multibillion dollar media company, had hundreds of suppliers. Some were great, some not so much. There were so many that tracking was not only disorganized but virtually impossible. The legal department’s vetting and approval process became a bottleneck, it could take six months or more to process a new supplier. Our customer either had to completely halt production while waiting for legal, or proceed anyway, taking on the risk of a tax/compliance exposure. They couldn’t issue a check for a supplier that legal hadn’t been approved, so some suppliers waited almost a year for payment. (You can image the frustration on the part of the suppliers too.) And since there was no consolidated, streamlined way to vet new suppliers, some were unreliable. Bottom line is it was a mess.
We implemented a secondary supplier program to clean up the supplier messiness. This included:
The transformation of their secondary supplier program was successful because it addressed each problem with one tailor-made solution. Once they handed over the keys, we rehabbed the program like an episode of Fixer Upper (Chip and Jo-Jo would be proud). Here’s how we did it:
We moved major suppliers into the MSP, or through Populus Group. This gave Procurement visibility and consistency. The MSP and Procurement Teams then had full control over suppliers (new and existing) on a go-forward basis.
Our customer’s goal was to cut about 400 suppliers:
We cut suppliers based on the following criteria:
By partnering with PG, a certified Minority Owned Business Enterprise (MBE), our customer also began earning toward their diversity spend goals. Yahoo!
Our customer’s secondary supplier transformation was pretty significant. After we completed our assessment and the implementation of a streamlined secondary supplier program, we were able to create a lot of peace of mind for all parties involved, from the program office to the suppliers and sub vendors in the field. Cycle times decreased, terms and conditions were simplified, and overall everything just made more sense. From tracking to issuing payments, things were easy to find and execute. The customer already had a program in place, which helped the consolidation be smooth as butter.
By creating streamlined processes, we’ve been able to support significant growth of new suppliers and headcount in the program. Take a look:
Year |
# of Suppliers |
Total Headcount |
2016 |
12 |
259 |
2017 |
43 |
268 |
2018 |
110 |
439 |