The Challenge – Maverick Spend and Exorbitant Markups
Our client engaged TPG to collaborate and establish a solution for their current temporary labor program. The program had no restrictions, bill rates or contracts with any of their existing suppliers. This allowed for manager maverick spend and exorbitant markups by the suppliers. After our initial analysis of several sites, we found that some sites had identical roles that were being billed at different rates within different departments.
The Panther Group Solution
TPG analyzed our client’s entire temporary labor requisition process including job orders, job titles and bill rates. TPG engaged a Managed Service Provider solution and also provided a VMS solution to our client. The MSP and VMS solutions provided our client with a standardization of their job requirements, job titles, and their respective bill rates. We eliminated maverick spend. Reviewed existing bill rates and established a preferred supplier base with newly established straight time and overtime bill rates.
TPG’s solution provided our client with $3 million in cost savings in the first year alone. By establishing our solution, we also reduced the supplier base from 70 to 30 suppliers. This included 10 suppliers from our well-vetted TPG supplier network, including some new suppliers who had never serviced this client prior to our involvement.