In procuring suppliers for the relocation of your employees, one of the first places to start is selecting the appropriate supplier model for your organisation that provides the best value for your budget at the same time as maximising the service provided to your employees and supporting them in a smooth transition.
Traditionally there are two approaches that are most common (although of course many others exist) – single supplier or a panel of suppliers. Each approach can have a benefit and it is worth taking time to speak with potential suppliers about their strengths as part of either model, however it is important to make this decision and inform prospective suppliers before going out to tender as it will have a distinct effect on the pricing, if you change your mind after receiving proposals be sure to give suppliers the opportunity to revise pricing accordingly to ensure long term sustainability and competitiveness.
Described below are the key characteristics and typical considerations for both approaches.
Exclusive contract – Single Supplier:
A single supplier handles all relocations, either based on individual quote or tariff basis.
Outsourcing to a single company increases the suppliers economies of scale which can be transferred to you through lower rates. In addition, savings may be obtained at the client’s side through streamlining of processes (IT, admin, reporting etc.) in dealing with just one source.
Finally, a single supplier will be able to offer a uniform service across all regions, allowing for an increased service predictability.
This approach may on the other hand be perceived as one that increases prices due to lack of ongoing competition. This fear can however be addressed by means of comprehensive rate comparisons at Tender stage and by requesting full transparency from the supplier.
Non-Exclusive Contract – A Panel of Suppliers:
A number of suppliers are pre-vetted and appointed to an approved panel. Panel members are then requested to quote for each or a selection of jobs, introducing an element of ongoing price and service competition
Some companies allow involvement of the assignee in the selection process to provide an element of choice but this may lead to unwanted side effects with the assignee supporting the supplier that offers the most personal benefits or the assignee, which may not necessarily be supporting company objectives. An additional benefit of this model is capacity in that additional suppliers can be added more easily to the panel should move volumes increase beyond predicted levels.
The downside of having more suppliers bid for individual jobs is that the in home survey requires more time from the assignee as well as more admin time required for the Global Mobility team in collating and comparing quotes as well as managing multiple suppliers. In addition a risk exists that an apparently cheaper quotation may exclude certain cost elements that may only be presented afterwards. In addition there is a risk of inconsistent service delivery in varying processes and varying quality levels between suppliers.
An Alternative approach – Move Management:
Move management combines the benefits of both approaches. A single supplier provides move management services and appoints physical moving services to a panel of subcontractors (These can be chosen by you, or recommended by the supplier, or could be members of an existing pre-vetted network such as UniGroup UTS). Suppliers could be for exclusively Household Goods moving or can include other relocation services as well.
Whilst there may be some concerns about adding an additional layer between your Global Mobility team and the supplier. The benefits of this system include:
- The supplier handles supplier management, reducing the time required by your global mobility team
- Competitive rates
- Supplier choice
- Flexible capacity and tailored coverage
- Single in home survey
- Consistency in service delivery
So, which model is right for you? If the traditional options don’t work for you what other options are there? Or do you need something completely new and tailored to your specific challenges? Whilst these are the most common models the best relocation suppliers will help you identify your individual needs and be able to recommend the best models and processes for help you achieve your goals.
Of course the above is a brief outline of these options and there are many other factors to consider…. You should also consider whether your organisation will be adopting a single, central model globally or whether suppliers will be managed regionally as well as whether your requirements cover simply household goods or whether the scope of a single arrangement is to include other related relocation services.
If you would like any further information or a free of charge consultation regarding supplier options or any other aspect of your Global Mobility requirements please contact Jeremy Chandar, Corporate Sales Director at Bournes Relocation Solutions or visit www.bournesmoves.com/relocation