You might wonder what does on-demand labor have to do with supplier sourcing? On-demand labor is a path to supplier development and cultivating competition by exploiting it to allow a new market entrant a chance to meet the needed service levels.
While exploring sourcing categories, a common scenario is identifying one where the supplier set is stale and nothing but incumbents. This is not an ideal scenario to revitalize competition or achieve improved customer service because of the limited market options available. However, sourcing professionals are tasked with cost reduction and service level improvements from suppliers despite these disagreeable suppliers.
A sourcing manager has a couple options:
Carve out easy business for developing new suppliers
Increase supplier capability
Supplier development by category carve out
There’s plenty of familiarity with developing suppliers by carving the less difficult segments to provide to new suppliers a trial period. This approach comes with trade-offs though, as the incumbents could retaliate due to the reduction in their share. If the incumbents are upset enough, then they will not bail out the business in the time of need. They will typically be spurred to action by an increase in price or executing an agreement with term that guarantees them a percentage of the spend.
As a customer, if the quality of a supplier's products has already been vetted, then the next order of business is ensuring that the supplier can reliably meet service level expectations. Once a supplier has built its labor pool, it has unlimited flexible capacity that it can deploy at a moment's notice to precisely mirror demand. This means this supplier can comfortably meet customer service level expectations year round regardless of demand and no longer has to burn out its full-time employees with mandatory overtime to try to get an order out on-time.
How to identify this resource
This capability can be identified through the operational excellence badge. Earning Veryable Preferred Business Status is not based on how long a company is on the platform, but more about how they use the tool. This badge signifies that a business has built and is maintaining an external, flexible workforce to scale labor up and down. Veryable introduced the Program to provide greater visibility of these highly efficient companies and to give them a way to show potential customers that they have the capability to deliver on time and on spec. Companies that use the Veryable platform have many things in common, but more specifically, they all strive to provide better products and service for their customers. The Credential Program is here to highlight those businesses, allow them access to other highly efficient companies, and help them retain their customers and win new business.