SIG is a leading European provider of specialist building materials, with close to £3bn of annual revenues and around 9,000 employees across the UK, Ireland and Mainland Europe. As a specialist distributor, SIG plays a critical role in the construction supply chain, bringing value to its customer base across major European markets.
SIG enjoys strong partnerships with many of the world’s leading producers of building materials. It has purchasing arrangements with many suppliers, which include a significant component of rebate paid retrospectively, often with complex arrangements tiered for growth, and with different rates applicable to different product families and uses. The management of these rebate agreements, and particularly the accurate recording of rebate earnings and rebate release to the P&L, has been a challenge for the business for a number of years. In particular:
- Rebates were tracked and managed through a mix of manual processes and Excel workbooks.
- Rebate management was only understood by a few individuals in the business, and this was seen as a significant risk.
- The process of calculating rebate earnings was time consuming, and rebate claims were not always made at the earliest opportunity.
- The audit trail for managing rebate collections was weak, making resolving any supplier disputes time consuming.
- Rebate deals were not systemised, raising the possibility that some rebates had been achieved but not claimed.
- Because rebate thresholds were not easily visible, those responsible for placing orders had no information to make ordering decisions that would help to maximise rebate income.
- Commercial teams were spending a lot of time on administration and manual calculations.
The team realised their processes were resulting in missed claims, missed opportunity to claim, cash flow issues and general inefficiency; all of which needed to be addressed.
The SIG Rebate Management Team considered ways to improve control processes for rebates, and to de-risk their management through the acquisition of a professional third-party rebate solution. In the Spring of 2018, after a review of the market, Enable’s Rebate Management Software was selected.
Enable’s software addresses all of SIG’s rebate management challenges, and Enable’s extensive experience in the building materials industry gave them the support they needed to redefine and optimise business processes.
While the selection project focused on managing deals and accruing for and claiming rebates correctly, the cash collection module turned out to be a real differentiator for SIG – helping them to make sure that claims are made and that all cash is received.
SIG’s immediate aims in implementing Enable rebate management software are to ensure their processes are robust and compliant, that all rebate agreements are properly recorded and signed, to ensure that all rebate is claimed, and to improve cash flow.
In the longer term, SIG is looking forward to utilising the full capabilities of the rebate management software. They will be able to use the data summaries and drill-downs to make better, more informed decisions and work with suppliers to create mutually profitable deals. In this way, the rebate management software will become an important tool to help the commercial development of the business.