Case Study: New Supplier Program Addresses Turnover
Business Issue
A global manufacturer of consumer products and developer of technology, aerospace systems and engineering services needed to fill 600 positions within three months. The company faced significant contingent worker turnover due to high job growth and an increase in benefits in nearby companies. Position level (manufacturing operator) turnover was critical. Even a modest increase in pay or benefits from a competitor could make a candidate change his mind and leave for a “better offer.” Production lines were at risk of shutting down. The company required a managed service provider (MSP) that could address its immediate needs while also providing an effective long-term strategy in Mexico and beyond.
The TAPFIN team in Mexico worked with TAPFIN’s global team to propose a full MSP solution that could be leveraged in Mexico as well as throughout Latin America.
Solution
The TAPFIN team began by conducting a supplier audit to better understand the challenges and opportunities associated with the client’s existing suppliers. The team identified priority issues and investigated the conditions under which suppliers were operating as well as the market context in terms of salary levels for the type of positions required. This included a market analysis conducted by TAPFIN’s Mexico team in partnership with the global team.
The team worked directly with suppliers to identify the main reasons for worker turnover. Suppliers were also given the opportunity to explain the advantages that they offer to the company in terms of efficiency and assertiveness in the filling of vacancies. This effort helped to create enthusiasm for the program among suppliers and provided an incentive for suppliers to move forward aggressively. The information obtained during the research phase provided significant value and strengthened the overall strategic partnership between TAPFIN and the client. As a result, the MSP team was able to work with the client to make adjustments to supplier operating guidelines.
Results
The effort to emphasize a more efficient supplier list yielded immediate results, including the following:
- Six hundred openings filled within two months.
- Systematic supplier evaluations have resulted in greater efficiencies in hiring.
- More efficient systems have delivered cost savings for the client.
- Recently, the success of the program has led the client to approve the integration of more LATAM countries into the program, as well as additional sites in Mexico.