With sales in excess of £118 million, DCS is one of Europe’s largest distributors of Health and Beauty products. Since the company was established in 1994 DCS has witnessed, under the direction of founder Denys Shortt, unprecedented growth. Not only handling sales and distribution for brands such as Gillette, Colgate, P&G, Unilever, L’Oreal, Cussons into selected markets, DCS has launched its own Enliven range of budget priced toiletries. In addition, the company supplies over 30,000 retailers through 500 wholesalers in the United Kingdom as well as exporting to 70 countries worldwide.
What was the issue?
As the UK’s largest distributor of toiletries and household products, DCS negotiates high volumes of rebate deals with hundreds of suppliers.
Complex retrospective payment deals are applicable across all product lines, varying from supplier to supplier. As a result, tracking and realizing the revenue from such deals can be a difficult task, yet crucial to the profitable running of this highly successful and innovative business.
"Managing rebates is very important," explains Harry Fellowes, Financial Systems Controller at DCS. "Without the right system in place there is the potential for the true value of deals, which have been skilfully negotiated, to never be realized."
Previously managing all contracts using spreadsheets, which detailed various calculations including trading terms, special prices and promotions, DCS believed that automating the procedure would enhance its business model and ensure the maximum possible income could be generated from each supplier deal.
"With a central, automated system we would be able to reduce risk, manage contracts more effectively and invoice more quickly. In many ways it was a no-brainer.
What was Enable’s solution?
With a considerable track record in rebates and overriders across a range of supplier sectors, Enable has developed a system to manage, track and report on large volumes of complex retrospective payment deals.
In particular the system has provided DCS with two crucial functions that have improved administrative efficiency, reduced the scope for error and inaccuracy and thereby improved the company’s bottom line in terms of claiming rebate generated revenue. The system provides:
- Verification and approval of profit margins across all sales order lines based on the agreed rebate payments
- Automated billing of all rebate claims.
Integrated with existing back office processes the re-keying of data has been eliminated, with the new system capable of dealing with the vast range of clients and rebates.
"The system is incredibly intuitive," explains Harry. "Having researched the market we knew that to develop a system that could deal with such a complex matrix of information was a particularly niche offering. Enable has not only delivered what we were looking for but, given their understanding of the market, they have further enhanced our original brief."
What was the impact?
The system continues to demonstrate return on investment. In 2009 alone, just one person was able to raise almost 5,000 invoices with an eight figure total order value.
"The entire process has significantly reduced administration time—in fact, by two weeks out of every month—which in turn means we’re effectively two weeks ahead of our competition at any given time," continues Harry.
Automation of the system has certainly catapulted DCS into a league of its own when it comes to rebates. The new system provides profitability reporting to ensure complete transparency across the company and, with a warning model; any deals sold below cost are flagged up immediately. Everything is checked by the system eliminating risk and, as it updates overnight, invoices are automatically generated and ready to email out to suppliers the following morning."
In fact, time saved in data extraction and swifter invoice creation has provided well over £1 million in accelerated cash flow saving tens of thousands of pounds in bank interest each year. Needless to say, the additional cash flow creates further opportunities for DCS to buy and turnover stock much more quickly—as much as 10 times each year.
"The beauty of this solution is that it has been designed to fit our business which means we can enter into even more complex deals if needs be.
"What’s more, the flexibility of the system is such that it can continue to grow with the company as numerous variables can be added over time. Our suppliers can be restricted in the way they operate but our system allows us to accommodate their processes making it easier for them in the long run.
"Given the complexity of our business, Enable has not only understood our requirements but has rationalised our processes, helping us become more effective.
"But, by far the greatest benefit of all, is knowing that all deals negotiated will be entered into the system and will result in an accurate, fully supported invoice being issued promptly and not missed or forgotten with staff changes or human error. Unfortunately, before this system was introduced, bitter experience tells us that even missing 1% of deals could cost the company a six figure sum each year."
An industry pioneer, DCS recognises that efficient rebates and overriders processes make the difference between just ’making do’ and making profit.