2023 GLOBAL SRM RESEARCH REPORT
ENABLE SPONSORED CONTENT
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“Rebates are the currency of the supply chain.” Andrew Butt , CEO, Enable
This doesn’t have to result in a greater overall payment, it simply means the incentive - and therefore action required from the supplier - is more targeted. And this is what changes behaviour. Greater clarity Rebates are the currency of the supply chain. They typically account for significant sums of money that are often quite badly managed, which companies can ill afford. Poor management takes more time, money, resource and often means disagreements between the parties. Instead of discussions around money going wrong, using digital tools to record and track agreed aims means everyone is clear on the expectations and able to work towards those common goals. Joint goal-setting ensures the process is clear and transparent, and that helps to generate trust in trading relationships. This is essential because the vast majority of global trade (around 75%) goes between these central trading partners in the supply chain. It’s vital they understand the goals and strive to meet those aims successfully together. Customer expectations are now incredibly high. They’ve seen what can be done by the giants in the online retail space and they want that same speed, accuracy and low cost of delivery on everything they purchase. Businesses, therefore, need to invest in their digital supply chain capabilities to meet these demands and expectations. Digital capabilities Companies big and small across industries and geographies are starting to apply this advanced approach. They are using their rebate programmes to incentivise positive and profitable change for
their companies and that of their suppliers. And, in turn, they are boosting their supplier relationships. Instead of issuing one standard payment for their many thousands of trading partners once each year - as calculated and designated by often inaccurate and unwieldy spreadsheets; they are using a cloud-based, software-as-a- service system to run their entire programme. This has numerous benefits. For one thing, Enable’s B2B platform can be used to create mutually beneficial agreements. Where previously one side dominated in making these arrangements and holding the information, now each has the tools, software and access to what’s been agreed together and to track progress with it. Not only does this increase the chance of both buyers and sellers making a greater profit, it is an efficient and cost-effective way of working. Gone are the days of staff spending hours calculating payments at the end of an agreed term, or disputes over their accuracy, now each can
see figures updated daily. Whether you have a team managing 1,000 supplier payments or a handful, automation results in around an 80% reduction on the time spent reconciling rebates. Speedy set up Platform set up is swift and simple, and could be led by either the manufacturer or the distributor. Each side is able to use the tool from the first day of it going live, with full integration following a short time later. Typical set-up times are 30-90 days, with the return on investment usually delivered within one quarter of going live. Rebates are here to stay. Enable is re-thinking how these funds are deployed, managed and measured to help both sides of the B2B trading relationship succeed. This requires much more targeted and sophisticated rebate programmes to help organisations succeed in reaching their mutual goals. This is a huge opportunity for businesses, which is why so many are switching to a shared digital solution
Generate profits and create better trading relationships with a targeted approach. Using rebates to drive behaviour
In the past, rebates have been deployed like blunt instruments. Companies generally paid them annually and, begrudgingly; meanwhile recipients viewed them as an entitlement. The result has been a failure to boost buyer/seller relations and limited impact on commercial success. Now it is possible to take a far more advanced approach, and, in doing so, generate greater rewards for both sides. Past, present and future In the supply chain, distributors and retailers are like the sales and service teams of manufacturers. Just as companies reward staff with incentives, such as commissions or bonuses for hitting internal goals and objectives, rebates can
be used to remunerate suppliers for achieving agreed aims.
Instead of a one-off payment at the end of the year, these funds can be paid more frequently and in a more selective way to drive behaviour in an intelligent way. Let’s take an example. Where previously a manufacturer may have paid 3% bonus on all sales at the end of a year, they could try a more specific approach. They could incentivise their distributor to concentrate on selling a particular product line - perhaps one that drives greater profit or raises brand awareness. Success with this line could result in a larger and more regularly paid rebate, such as a 7% uplift, paid quarterly to ensure consistent performance across the year.
Benefits at-a-glance Using a shared, cloud-based platform, like Enable, to manage your B2B rebate programme can
and profitability, generating commercial benefits for manufacturers and distributors • The risk of mistakes that impact P&L are cut because the system that calculates rebate amounts daily • Efficiency and employee satisfaction is increased because time is freed up for more strategic work
bring multiple benefits: • Trust between trading
partners in the supply chain is exponentially improved through shared agreements, clarity of purpose and progress • Modern rebate programmes can help to drive revenue
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