SI Review: December 2011

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Straight Talk from the Customer

Help Us Help You

Understanding your client’s needs could lead to new business

By Traci Ramsey

At Monsanto, like many other companies, the focus is on efficiency. Our mantra is to cut costs and still be effective. As the person responsible for running Monsanto’s global CW program, I have to apply, or at least think about, the efficiency principle around the clock. Because we don’t have a managed service provider, I count on my suppliers to provide ideas and feedback to help us meet our goals. It really helps when your vendors understand your requirements and can deliver upon them.

I look to my vendors not just to fill the talent gaps, which of course is a huge priority. We need more than that. At Monsanto, we ask our suppliers to understand our culture. They need to understand what skills and personalities are a good fit here. My group works closely with our suppliers to ensure this, we are talking with many of our suppliers at least once a day to touch base and clarify issues. We also schedule more formal meetings to communicate our policies and processes. They know the pressures we face. Their job is to help us do our job better. And we in turn understand how they function. And while the term “partner” is grossly overused, our suppliers are just that.

I’d like to share an example of how one of our suppliers proved to be a true partner by thinking out of the box for ways to cut costs and improve efficiency.

The Background

Monsanto was going through some changes after one of our products came off patent — it affected our business overnight. As a result, there was a lot of focus on our sales, general and administrative costs across the company, and the CW program was no exception. We were looking at what we could do to cut costs. How could we run our business more efficiently?

That’s where our suppliers came in. We rely on them to produce great, cutting-edge ideas to keep our program up-to-date and best-in-class. It’s not necessarily about the big idea. It’s about changing an existing way of doing business. But to be successful, suppliers need access and communication into how the company runs. They need to be able to give and receive feedback. Our culture of keeping in touch daily and having those regular formal meetings came into play in this regard. In one case, it provided our supplier insight into our business and usage, which in turn enabled them to recommend a creative cost-saving strategy.

Innovative Initiative

We have some groups that use longer-tenured workers (more than 18 months) and other groups that use contingents for shorter-term needs, such as to cover maternity leave. Sometimes, contingents are entitled to vacation time and holidays. The standard mark-up for most of our non- IT suppliers actually includes vacation and holiday pay that they’re accruing for those workers. This particular supplier, though, offered not to charge us for that. Here’s how it worked.

The supplier suggested we take vacation and holiday pay out of the mark-up which allowed for less spend up-front. Monsanto would step in only if a worker actually qualified for vacation or holiday pay. The truth is that there are many workers who never qualify for both benefits — why would we want to pay that needlessly? So we decided that Monsanto would take a lower mark-up and pay only when workers qualify.

To make this work, we set up separate pay codes for vacation and holiday pay in our vendor management system. (No customization of the VMS was required. The technology allowed for this.) The qualified workers add in their vacation or holiday time once they have qualified for it, and it is then paid out directly from the manager’s cost center. At the end of the day, it has worked out well. We have cut our costs and the supplier mark-up decreased drastically into the mid-20s. The vendor can still offer these benefits to attract workers and we get the cost savings. In the end, it is a win-win for all of us.

The supplier thought of this scheme because they keep abreast of staffing developments, the abilities of the VMS and Monsanto’s internal needs. The supplier understood our goals as well as our usage patterns. The situation was looked at from our point of view and the strategy benefits both of us. It has resulted in more overall business for the supplier.

Are there simple strategies you can offer to save your clients money? Study your clients. Be sure you understand their culture, their usage and needs. Familiarize yourself with the technologies they use. In the end, a savings strategy just might reveal itself.

Traci Ramsey is global contingent labor lead at Monsanto.

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