Single vs. Multi-Supplier Staffing Model: Which is Best for Your Operation?
Different operations require different contingent workforce strategies. You can choose to go the single-supplier route and partner with one supplier who will take care of all your staffing needs. You can also opt for a multi-supplier strategy that distributes staffing responsibility across multiple suppliers. While both will provide the workers you need to optimize your operation and accommodate fluctuating demand, one may be better suited for your specific operational needs.
Scalability and efficiency are keys to success for manufacturing, distribution and fulfillment operations. The staffing provider or providers that you choose should have the expertise to implement a workforce management solution that accounts for:
- Accuracy – First and foremost, order fulfillment needs to be accurate. Your customer expects to get exactly what they ordered. Incorrect orders can leave customers dissatisfied and deter them from ordering in the future.
- Speed – Customers want speed. This factor is especially important for fulfillment operations. A Temando survey revealed that 80 percent of surveyed consumers want an item shipped to them within the same day of placing an order.
- Flexibility – Your operation needs flexibility. Demand is constantly fluctuating and you need to be able to fulfill orders while operating efficiently.
It’s also important to determine the type of business partnership you want to establish with your supplier. Let’s explore the attributes of an optimal partnership.
A mutually dependent relationship forms when two parties are equally invested in the same end goal and share similar values. With mutual dependency, there is an equal exchange of ideas and support between partners, resulting in both groups placing a high level of importance on each other.
The figure above from Supply Chain Risk offers a basic understanding of how a mutually dependent relationship works. When the same needs or goals are equally important to, and highly regarded by, both parties, the relationship is considered mutual, but it can become one-sided when only one party sees the importance of a particular goal or need. This creates an unbalanced relationship that is likely to cause frustration because the same level of care is not reciprocated by both sides.
The relationship becomes low dependency when both parties apply a low level of importance to the goal. Neither party is depending much on the other’s support, which weakens the relationship and makes it more likely to end.
Mutual Dependency and Staffing Suppliers
Your relationship with your staffing supplier or suppliers should be high in mutual dependency: all parties should view the end goal with the same level of importance. Whether your goal is to increase efficiency, to allow for greater scalability, or to do both, the staffing supplier or suppliers should work with you to formulate a strategy. Once this strategy is in place, they should work with you to continuously review and improve it.
One concern with a multi-supplier approach is that it becomes increasingly difficult for the same level of high importance to be shared among a larger group, especially when their efforts are in competition with each other. Not only is it harder to pursue a shared goal, but it’s also more challenging to communicate your expectations for accomplishing that goal when more parties are involved. When responsibilities and demands are split up among multiple suppliers, the high mutual dependency that you’re striving for can falter. Risk mitigation also weakens with a multi-supplier approach. Ensuring and enforcing compliancy for four suppliers is much more difficult than overseeing one partner.
If you’re looking for a strategic partner to share in your business goals, then a single-supplier strategy is your best option. Here are three benefits of utilizing a single supplier:
1. One point of contact
There’s only one person you need to direct expectations to when you partner with a single staffing provider. The single contact is easier to manage because you’ll know exactly who to go to when you need support. It saves time and ensures your message is consistent and relayed accurately. Working with one point of contact also allows for trust and reciprocity to be built, thus furthering high mutual dependency.
2. Streamlined reporting and invoicing
Reviewing multiple reports in multiple formats can become onerous. Streamlined reporting will make the review process much more manageable because you’ll be able to access important data and key metrics in one place. Streamlined invoicing is advantageous because it makes it easier to reference and show stakeholders how the money is being spent, and it reduces the likelihood of time-consuming invoice disputes.
3. Single message to the market
Having multiple suppliers recruiting for the same positions can dilute the market. Instead of having your best interest in mind, they will be focused on competing against each other, which can send a confusing message to the recruitment market and potentially hurt your company’s reputation.
The Bottom Line
Enlisting the expertise of a staffing supplier can provide greater efficiency and scalability to your operation than you could achieve alone. When choosing a single-supplier or a multi-supplier model, it’s important to assess the type of relationship that your operation requires.
Mutual dependency occurs when there is an equal exchange of ideas and support between two parties that are working together to reach the same goal. It can be challenging to form a high-level mutually dependent relationship when working with multiple staffing suppliers. Such an arrangement requires you to divide tasks among a competing group and each group’s desire to outperform the others can lead to less focus on your business goals.
Conversely, partnering with a single staffing supplier will yield a higher level of mutual dependency, allowing you to develop, refine and continuously enhance a shared goal.
There are many benefits to choosing a single-supplier approach. Working with one supplier provides you with a single point of contact for all of your staffing needs as well as a streamlined reporting and invoicing process, and the ability to deliver a single, consistent message to the recruitment market.