May 17, 2020

Avetta: The ROI of Streamlined Contractor Qualification and Management

Sponsored Content
Sean Galea-Pace
3 min
Avetta has released a white paper called The ROI of Streamlined Contractor Qualification and Management
A new NPR/Marist poll has revealed that one in five jobs in the US is held by a worker under contract. It is expected that independent contractors could...

A new NPR/Marist poll has revealed that one in five jobs in the US is held by a worker under contract. It is expected that independent contractors could consist of half of the entire workforce in the US within the next 10 years. 

An increasing number of organisations are beginning to see contractors and suppliers as valuable business partners intrinsic to driving service and product innovation. For an increasing number of companies, operating in highly regulated industries and managing compliance in-house for all of these suppliers can be burdensome. Avetta has released a whitepaper called “The ROI of Streamlined Contractor Qualification and Management” that finds out more. 

 

The hidden costs of ignoring contractor management

When an organisation’s compliance function is effective, its success is often quantified by what didn’t happen: lawsuits, damage to reputation, lost business, legal sanction and so on. The absence of any compliance-related incident often makes management complacent about compliance. Due to this some of the function’s budget could have to be reallocated to fund activities that are perceived to have a better impact on shareholder value and earnings. However, with a focus on anti-corruption laws and workplace safety policies intensifying globally, such a stance carries significant risks.
 

The rise of the extended enterprise

Until the recent past, most organisations viewed contractor and supplier relationships predominantly as a convenient way to reduce costs, and not as drivers of business value. However, an increasing number of organisations see contractors and suppliers as valuable business partners who are intrinsic to driving service and product innovation, as part of the extended enterprise.
 

Offsetting third-party risks to drive value

Organisations often approach contractor and supplier management on an ad-hoc basis with point solutions. Such solutions only address specific challenges such as regulatory mandates when they arise, without a thorough, cross-enterprise approach to compliance management.
 

Costs of in-house contractor compliance management

In most organisations, contractor and supplier management is highly fragmented and requires a great deal of effort, this also makes it expensive for the organisation. For instance, the pay of an experienced full-time employee for a single function could be between $70,000 and $75,000.

Paper-based processes and disparate system make for compliance silos, with separate teams in place to address compliance requirements for different departments or regions. This results in unnecessary duplication of manual effort and the growth of a complex ecosystem of data records that are hard to maintain.

 

The cost of procrastination

For lots of companies, especially those operating in highly regulated industries like O&G, chemicals, and pharmaceuticals, managing compliance in-house can be ineffective. But the cost of non-compliance, in the form of penalties, fines, productivity losses, settlement costs, and inefficiencies - is ruinous.

 

Toward holistic compliance and governance

It’s clear that the costs of non-compliance and inefficient contractor management can quickly escalate. One way for organisations to effectively minimise costs and manage risks is by working with a company like Avetta. The company’s innovative and configurable technology brings complete transparency to its supplier management process and clients vouch for our trusted contractor prequalification, safety training and monitoring, and regulatory compliance services.

Avetta ensures that contractors are qualified, information is managed effectively, the risks involved are evaluated as well as training and upskilling of contractors are completed.
 

Where’s the ROI?

Telecom major SBA Communications subcontracts repair and upgrade services to a network of almost 2,500 independent contractors. Without a central database, the company had to manually check for compliance with safety regulations with safety regulations and insurance requirements.

Aveta’s solutions allows organisations to initiate a more comprehensive review of a supplier and contractor data. This data is not stored in silos but captured in a centralised platform which allows you to constantly review each contractor and their associated audit trails.



To read the full whitepaper, click here!

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Jun 11, 2021

NTT DATA Services, Remodelling Supply Chains for Resilience

NTTDATA
supplychain
Supplychainriskmanagement
Procurement
6 min
Joey Dean, Managing Director of healthcare consulting at NTT DATA Services, shares remodelling strategies for more resilient supply chains

Joey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA and is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients.

The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there.

A Multi-Vendor Sourcing Approach

“Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency.

“The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean.

But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?

“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains.

Wielding Big Tech for Better Outcomes

So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry

“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality. 

“Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.”

Evolving Procurement Models 

From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view. 

“The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models.

“Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.”

“Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having predictive views into inventory levels can help enable better decision making from both sides.”

But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs?

“In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-in-time basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal.

The Challenges

These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say.

On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.

Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.”

He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.”

As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.”

 

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