by Steve Knapp, Vice President, Consulting
In the last ten years or so, there has been a rapid proliferation of contingent workforce management programs. These come in the form of both outsourced and insourced managed service providers (MSPs).
While the impetus for these solutions was born in the IT world, where companies wanted to control their rapidly expanding technology contractor population, the industry has matured since then. MSPs now manage every conceivable service category from healthcare to management consulting to industrial labor.
Does an MSP Really Add Value to a Manufacturing Environment?
The short answer is an emphatic yes, but the long answer involves understanding just what the value really is.
Manufacturing is a unique industry, with unique objectives. Key drivers like cost savings for office workers won’t be key drivers for an industrial labor program. Instead, industrial program goals will align more closely with business goals like efficiency, quality, safety, and meeting production targets. Staffing suppliers, while interested in these goals, are still primarily interested in one key thing: revenue that comes from from filling positions.
The Just in Time Production Strategy
In the manufacturing world, Just in Time (JIT) tends to be the predominant production strategy. As the contingent workforce is a vital component of this strategy, let’s look at how MSPs impact the areas of JIT:
- Design Flow Process: Like any MSP program, you start with process flows. The requisition to payment process is the vital building block. A good design incorporates both business needs and larger corporate requirements. A good MSP can police this process, reducing bottlenecks in areas such as time-to-fill, workstation capacity, and training time. Their job is to make sure the process flows smoothly. As icing on the cake, a good VMS tool can help to automate and streamline your process flow…music to the ears of any engineer.
- Total Quality Control: This is one of those areas where cost and savings are measured through prevention. An MSP can help ensure worker compliance with pre-screening and onboarding controls, audit certifications and credentials throughout assignments, evaluate worker output and replace low performers, and enforce health and safety measures. A continual focus on quality should be the cornerstone of the manufacturing environment program.
- Stabilise Schedule: A strategic MSP should proactively work with the business to understand the upcoming schedule. Often, the need for contingent workers is seasonal and there are ramp up and ramp down periods. To make the programme really hum, the MSP should be working with the business schedule to prevent under capacity, overcapacity, or late premium payments.
- Work with Vendors: One of the great things about a neutral MSP (internal or external) is that they are able to work with all vendors, large and niche. Good communication and constant feedback are necessary to reduce lead times, improve quality and run an efficient process. Vendor Reviews, QBRs, facilitated meetings with the business and evaluation feedback are all important tasks for the MSP to perform to ensure program success.
- Further Reduce Inventory in Other Areas: With visibility into the entire workforce, both internal and from all suppliers, the MSP can help to eliminate overcapacity in the workforce. As needs arise throughout the plant, MSPs can look at the roll-off schedules of existing contractors or their capacity metrics and look to repurpose those contractors elsewhere. Overall, you can have a workforce acting efficiently.
- Improve Product Design: MSPs have the advantage of looking across multiple departments, disciplines and processes to view the entire contingent workforce management process holistically. All too often individuals can only view the world from their perspective, leading macro processes to become inefficient and time consuming.
A Holistic Manufacturing Solution
Even if your manufacturing facility doesn’t utilize a JIT production strategy, you can recognize the benefit an MSP program for your environment. Remember to incorporate the business needs rather than just traditional procurement strategies. In the long run, similar to JIT for products, your contingent labor will be much more efficient, which of course…saves money.