Case study: Supplier optimization in financial services industry

The story: Helping a large American wealth management firm streamline their supplier management.  

• When we took over their plan, they were struggling to coordinate with 34 suppliers, some of which had not been approved to their standards and unfit to fill their requested roles in financial services, IT, project management, and administration.  
• We implemented a new system to improve supplier engagement, increase the competition, set metric improvement goals, and record metrics on each supplier and their submittal ratios.

The challenge: The amount of suppliers made it difficult to fill openings with quality candidates.

• The number of requests per candidate submitted (Response Ratio) was low for certain suppliers along with the quality of candidates submitted (Submit to Hire Ratio) which resulted in an unpredictable and cloudy supplier base.
• The client’s 18 preferred suppliers and 15 approved suppliers struggled to fill a limited number of openings. Due to the excess number of suppliers pushing for their candidates, the clients response and submit-to-hire ratios fell to 45% and 9% respectively.
• Additionally, the speed-to-candidate was 3.5 days, further slowing the hiring process.

The solution: We focused mainly on supplier quantity, expectations, and up-to-date metrics.

• We started by reducing the number of preferred suppliers from 18 to 13, removing companies that had low response and submit-to-hire ratios. Many suppliers did not bring sufficient expertise to the fields that they operated in, and this was reflected in the client’s metrics. We replaced those suppliers with a single trusted partner that has previously given consistent results.  
• Additionally, we helped set specific targets that preferred suppliers needed to hit to maintain their preferred status. Hiring managers also had to follow new guidelines on which suppliers they should be working with for specific roles.  
• Installed new scoring system: we implemented a scorecard for managers to utilize that gives up-to-date metrics and fuels competition and engagement. This provides insight into program performance and allows for optimization.

The results:

• By reducing total suppliers and optimizing supplier focus, the requisition response ratio increased to 79% and submit to hire ratio increased to 10%, as suppliers are more experienced on the roles they fill and more motivated to compete.
• We reduced their speed-to-candidate to 2 days, as candidates spend less time interviewing and suppliers have an easier time submitting candidates to the VMS.
• The client has full control of the process and can add or eliminate suppliers based on agreed upon minimum metrics, KPI’s, and SLA’s, thus maximizing performance.