This building materials supplier was struggling to reconcile rebate information in their unwieldy spreadsheet-based system. They also had an issue around extracting detailed and summary data across all branches and categories prior to the negotiation.
They felt that they needed to gain control over rebate income and at the same time find a solution that would help them to improve their supplier negotiations.
With insufficient accurate, consolidated information at their fingertips, the procurement team could only negotiate on price. They knew that by understanding the projected volumes and product mixes required at a branch / product level they could include delivery, quality and other measures into their negotiations.
Whilst DealTrack is a rebate management solution, it forms part of a larger suite of software designed to enable smarter joint business forecasting, planning and execution for those companies (like building materials merchants and their suppliers) who use rebate mechanisms widely in their contract negotiations.
They liked the fact that they could achieve an ROI relatively quickly by implementing the core DealTrack product, and in doing so create a solid platform for mutually beneficial supplier negotiations.
Whereas previously their supplier negotiations were around improving the margin for a forecasted product mix, they are now in a position to work with suppliers and drive even better margins that still gives the supplier a benefit.
For example, closer examination of demand from a supplier by branch can reveal that a drop-ship approach would be suitable, asking the supplier to deliver to their larger branches directly but using their own transport fleet to ship product onwards to the smaller branches. (Their own fleet moves between branches every day anyway, so this is not seen as an extra cost to the builders merchant.)
By helping the supplier find ways of reducing the supplier’s own distribution costs, that supplier is able to give a better margin without eroding their own profits — a mutually beneficial negotiation facilitated by DealTrack.
At a glance
- Identified missed rebate income from the previous year
- All purchase transaction data is now in one place
- DealTrack data analysis tools are being used to identify opportunities for negotiating mutually beneficial deals with suppliers, leading to better margins, better supplier relationships and mutually profitable growth.