When it comes to building strong trading relationships with partners across the supply chain, effective communication stands as an essential cornerstone of success for manufacturers and distributors. Our latest State of Volume Rebates Reports reveal eye-opening insights that underscore the growing importance of open communication and transparency between trading partners.
In this blog, we’ll share a few of these fascinating insights and troubling trends to explore the evolving role of communication in rebate management.
Communication Gaps with Manufacturers
When we interviewed manufacturers to gather information for our new reports, our findings indicated a startling revelation: many manufacturers recognize a gap in their communication strategies. A significant portion of manufacturers, hovering at 41%, engage in discussions about rebate programs with their clients on a less-than-regular basis. This sporadic communication starves the potential of rebate programs and leaves opportunities on the table.
To bridge this divide, an encouraging 55% of manufacturers are advocating for heightened awareness and understanding of rebate programs within partner organizations. They believe that through improved communication channels, there can be a substantial increase in operational efficiency and program effectiveness.
The Distributors' Dilemma: Seeking Clarity and Consistency
From the perspective of the distributors, the situation presents its own set of challenges. Nearly half of distributors we surveyed reported a concerning lack of awareness of supplier volume rebate programs, with this vital information often isolated within the realms of purchasing departments and senior management circles. This bottleneck of knowledge is further strained by the fact that a full third of distributor teams only gain insight into rebate programs when certain vendors are categorized as “preferred.”
Alarmingly, one in four distributors are navigating through a fog of poor communication with manufacturers, creating misalignments and mounting frustrations that could be avoided with clearer communications.
Reactive Approaches to Communication
The current communication model reflects a reactive stance, with one in three distributors left waiting in the wings to receive updates from manufacturers only upon initiating contact themselves. This passive posture puts distributors at a strategic disadvantage, leaving them ill-informed about their progress towards meeting targets and stripping them of the ability to pivot strategies promptly and efficiently. Effective collaboration between manufacturers and distributors requires clear and open channels of communication to support smart and streamlined decision-making.
Distributors Want Better Conversations and Alignment
A common thread in the feedback from distributors is the desire for more frequent and substantial interactions with manufacturers. They are not just looking for basic updates but for engagement that provides insights into how closely they are tracking against goals and how aligned they are with their partners' strategies. Addressing these communication gaps is not just beneficial but vital for nurturing stronger, more resilient relationships and ensuring strategic realignment when necessary.
The Path Forward: Proactive and Inclusive Communication
With significant opportunities for improvement on both sides, one thing is clear: it is incumbent upon both manufacturers and distributors to revolutionize their approach to communication. Information on volume rebate programs must flow freely and inclusively, reaching beyond the confines of the C-suite to all involved teams and stakeholders. Manufacturers in particular must work to shift gears from their historically reactive communication stance to a more proactive approach focused on shared objectives.
Embracing a Culture of Communication
As the supply chain grapples with the likes of disruptions, narrowing margins and other challenges, the demand for strong communication infrastructures becomes increasingly important. By cultivating a culture that values frequent, transparent and inclusive communication, manufacturers and distributors can more effectively navigate through the complexities of the market and align their strategies towards mutual prosperity.
It's a pivotal moment for manufacturers and distributors alike to refine your communication processes, solidify trust and enhance transparency with your trading partners. Consider adopting a comprehensive rebate management platform like Enable that can augment your capability to communicate effectively and achieve shared goals with greater ease.