Career Transitions - Newsletter

Advantages of Using a Preferred Supplier Program (PSP)

Q: What is a "Preferred" Supplier Program?
A: "Preferred Supplier Program" is "an arrangement between a customer and supplier for which, in return, the corporation has entered into a relationship providing exclusive rights to use the products and/or services of the supplier."

Q: What are the advantages offered to the customer?
A: The real benefit to the buyer is not in having preferred suppliers; it is in having suppliers for whom the buyer is a preferred customer. The major reason for choosing to develop and have preferred suppliers is the extent to which they can provide the customer with a competitive advantage in the customer's marketplace. In this context, "competitive advantage" means the ability to provide the customer with a unique product and/or service, or a degree of quality / value that is otherwise not available to the customer's competitors, or is not available from other suppliers (i.e. pre-qualified professional skilled staff).

Q: What are the advantages of working with a Preferring Staffing/Consulting supplier?
A: One of the main advantages includes access to the supplier's most talented staff. Additional advantages include:

Reduced costs. Although we're in an economic slowdown, recruiting good employees is still very difficult and expensive using HR time which could be better spent on strategic initiatives for the organization.

Enhanced Productivity. Clients find that a project staffer's productivity can exceed permanent staff.

Expertise. Professional staffing firms can provide expertise that would be costly and time-consuming for firms to recruit. This expertise can also bring in new ideas and innovations learned from other firms.

Flexibility. Firms can use outsourcing to achieve great flexibility.

Payrolling. Clients can minimize their exposure to unemployment, worker's compensation, taxes, and other liabilities by placing workers on supplier's payroll.

Q: How can you evaluate a Preferred Supplier Program with a Professional Staffing/Human Resource Consulting firm?
A: You can measure a PSP with a Professional Staffing firm with the critical outcomes of quality, timeliness and value. These can be measured in three areas that cover the full range of a customer / supplier contract:

Measure the staffing execution, or Quality

Measure project management, or Timeliness

Measure commercial arrangements, or Value

Q: What can Customers expect to get out of a "Preferred Supplier" relationship?
A: Entering into a preferred customer / supplier relationship needs to be a data-based business decision on the part of both parties. Before entering a preferred relationship, both the customer and supplier need to be willing to share information with each other that they might not normally share with another customer or supplier.

In summary, the advantages of using Preferred Supplier Programs include:

Access to expertise

Reduced costs

Access to professional capabilities

Improved service quality

Increases the control of your business

Makes the business more flexible to change

Streamlines a business' operations, allowing a business to focus on core activities

September/2009	Issue: 10
	Back Issues
Advantages of Using a Preferred Supplier Program (PSP) Q: What is a "Preferred" Supplier Program? A: "Preferred Supplier Program" is "an arrangement between a customer and supplier for which, in return, the corporation has entered into a relationship providing exclusive rights to use the products and/or services of the supplier." Q: What are the advantages offered to the customer? A: The real benefit to the buyer is not in having preferred suppliers; it is in having suppliers for whom the buyer is a preferred customer. The major reason for choosing to develop and have preferred suppliers is the extent to which they can provide the customer with a competitive advantage in the customer's marketplace. In this context, "competitive advantage" means the ability to provide the customer with a unique product and/or service, or a degree of quality / value that is otherwise not available to the customer's competitors, or is not available from other suppliers (i.e. pre-qualified professional skilled staff). Q: What are the advantages of working with a Preferring Staffing/Consulting supplier? A: One of the main advantages includes access to the supplier's most talented staff. Additional advantages include: Reduced costs. Although we're in an economic slowdown, recruiting good employees is still very difficult and expensive using HR time which could be better spent on strategic initiatives for the organization. Enhanced Productivity. Clients find that a project staffer's productivity can exceed permanent staff. Expertise. Professional staffing firms can provide expertise that would be costly and time-consuming for firms to recruit. This expertise can also bring in new ideas and innovations learned from other firms. Flexibility. Firms can use outsourcing to achieve great flexibility. Payrolling. Clients can minimize their exposure to unemployment, worker's compensation, taxes, and other liabilities by placing workers on supplier's payroll. Q: How can you evaluate a Preferred Supplier Program with a Professional Staffing/Human Resource Consulting firm? A: You can measure a PSP with a Professional Staffing firm with the critical outcomes of quality, timeliness and value. These can be measured in three areas that cover the full range of a customer / supplier contract: Measure the staffing execution, or Quality Measure project management, or Timeliness Measure commercial arrangements, or Value Q: What can Customers expect to get out of a "Preferred Supplier" relationship? A: Entering into a preferred customer / supplier relationship needs to be a data-based business decision on the part of both parties. Before entering a preferred relationship, both the customer and supplier need to be willing to share information with each other that they might not normally share with another customer or supplier. In summary, the advantages of using Preferred Supplier Programs include: Access to expertise Reduced costs Access to professional capabilities Improved service quality Increases the control of your business Makes the business more flexible to change Streamlines a business' operations, allowing a business to focus on core activities	August 2009 July 2009 June 2009 May 2009 April 2009 March 2009 February 2009 January 2009 December 2008 In This Issue Advantages of Using a Preferred Supplier Program Who We Are...Contact Us Addtional Resources & Information Who We Are Amy Szuba Senior Contract Recruiter Angie Fitzpatrick Manager, Professional Accts Brenda Comer Office Manager Brian Hulecki Senior Search Consultant Elaine Chaffee Executive Vice President Elizabeth Muellner Director, Career Mgnt Services Jeff Tuholski General Manager Kristin Jarrin Recruiter Additional Resources & Helpful Information Use Employee Coaching to Improve Results - see article Top 10 Toughest Questions - Asked and Answered - see article How to Build a Teamwork Culture - see article