The Client  

AAH is a leading distributor of pharmaceutical and healthcare products in the UK. With an extensive product range of approximately 30,000 items, they efficiently deliver around 200 million products per week to a customer base of 20,000 across the UK. This operation is managed through 14 distribution centers strategically located throughout the country. For the past two decades, AAH has been providing twice-daily deliveries to their customers, establishing a reliable track record.

In the UK, AAH operates under three trading brands: AAH, Enterprise, and Trident. Customers engage with these brands across various product categories, each with their own distinct rebate levels. Effectively managing approximately 40 different rebate types across 20,000 customers and 30,000 SKUs presents a multitude of possibilities for customization and optimization to meet customer needs.

Michael McSorley, Head of Business Development has been with AAH for six and a half years, during this time, he has fulfilled diverse roles within sales and commercial departments. Currently, his focus lies on ensuring maximum value for both customers and shareholders. This involves forming partnerships with industry stakeholders and aligning the company's offerings with market trends to provide unique solutions.

The management of rebates at AAH involves a wide range of colleagues from various departments, including IT, sales, commercial and finance. Their collective efforts aim to optimize the value delivered to customers through the rebate ecosystem.

Rebates Drive Collaboration for AAH

McSorley tells us, “Rebates within the pharmaceutical industry ensure we deliver and drive long-term collaborative partnerships for the future. They are instrumental in driving long-term growth for not only our customers, but for our own business. This collaborative approach makes sure that we reward those customers who wish to partner with us for the long term.”

The Challenge

Spreadsheets Not Fit for Purpose

AAH had reached a point where using spreadsheets for rebate management was no longer feasible. The costs associated with their usage were becoming inefficient, and the processing speed was inadequate. AAH encountered issues such as version control and inflexibility, rendering spreadsheets unsuitable for their needs.

According to McSorley, "Spreadsheets were inadequate for handling the complexity of our rebate calculations. Our aim was to foster innovation, broaden our understanding of what could be achieved and avoid being confined to traditional rebate methods.”

Complex Contracts and Calculations

AAH recognized the importance of ensuring that their internal colleagues and customers fully grasped the underlying logic of their rebate contracts and calculations. Their objective was to establish a single version of truth that could be accessed and utilized by everyone, enabling them to transparently communicate progress to customers regarding their performance in relation to long-term rebates.

McSorley says, “We had reached a point where we were unable to effectively manage the sheer number of rebates we had. We wanted our colleagues to focus on where there were opportunities to grow the business, rather than spending lots of time carrying out the complex calculations in the first place.”

Settling Rebates Swiftly

At AAH, all rebates are resolved through credit notes issued on the customer's account. As a result, it is crucial for the company to perform these calculations swiftly and efficiently, ensuring that the credit notes are accurately applied to the customer's business during the monthly statement.

McSorley says, “Our customers are a really important part of the NHS infrastructure and therefore having a quick and easy process to settle rebates is really important for them as well.”

The Solution

Onboarding of Enable

During the onboarding process, AAH received extensive support from the Enable team. This support was provided through a range of activities, including on-site meetings at AAH's office, visits to Enable's offices, and a significant amount of remote collaboration. The Enable team established a strong and dedicated partnership with AAH, effectively becoming an extension of their own business. This support has been ongoing for the past year.

Leading the team were Matt, Zoe, and Lukasz, who took great care of AAH throughout the process. Bi-daily check-ins were conducted using Enable's project management software, ensuring regular communication and tracking of progress at an executive level.

McSorley, reflecting on the onboarding experience, commented, "We had five legacy systems responsible for complex calculations, and with the assistance of the Enable team, they guided us in understanding the inner workings of each system. They also helped us initiate a data cleanup process for the underlying data within each system."

Sales Team Reaping the Benefits

With Enable, the sales team finally has the tools they need to offer the right rebates to the right customers. They can rely on calculations and projections more than ever before, allowing them to create more rebate programs that drive the behaviors the company wants to see from their customers.

McSorley tells us, “Enable has provided our sales teams with a high level of confidence. They now have the ability to offer customers best-in-class rebates, knowing that the calculations will be accurate, and payments will be made promptly and in full. The flexibility that the platform provides around being able to offer different types of rebates simply wouldn't be possible in a spreadsheet environment.”

He continues, “This newfound assurance allows our sales teams to interact with customers in a more impactful manner. They can provide customers with detailed updates on their progress regarding rebates, enabling them to focus on business growth instead of being burdened with the task of calculating rebates independently.”

Improved Forecasting and Reporting

AAH has experienced significant benefits in both forecasting and reporting aspects of their business as a result of their partnership with Enable. Improved forecasting capabilities have enabled AAH to make data-driven decisions with greater accuracy. They can now more precisely estimate the amount of rebate they will need to pay out at the end of the year, allowing for better financial planning.

In terms of communication with customers, AAH has been able to provide clearer and more transparent updates on their performance. This enhanced communication has fostered stronger relationships with customers, as they are now able to understand how they are progressing in a more comprehensive manner.

McSorley says, “Within our business, our data landscape was really fragmented with regards to rebates.  Bringing everything into one place became very important for us. We can now precisely track and attribute rebate payments to specific products and customers, providing insights into their margins in a way that was not possible before. This improved visibility allows us to make more informed business decisions and optimize our operations more effectively.”

Significant Cash & Time Savings

The implementation of Enable has resulted in significant savings for AAH, both in terms of time and cash. McSorley tells us, "By leveraging the Enable platform, we have successfully automated the manual calculation of £600,000 in annual rebates that our sales team used to perform. Although it may not directly result in financial savings, it has significantly reduced the time required for these calculations. Additionally, it has ensured consistency and standardized calculations for our valued customers."

Enhancing Customer Offerings

Through their partnership with Enable, AAH has gained the ability to consolidate spending across their three trading brands in the UK. This consolidation enables them to provide their customers with a unified payment at the end of each month, simplifying the process for both AAH and their customers.

McSorley says, "Enable has empowered us to execute customer offers that were previously beyond our reach. This capability has enabled us to incentivize customers to engage with all three of our trading brands and ensure that we appropriately reward those who have chosen to partner with us."

Why Enable?

AAH carried out extensive market research to understand who the best provider was to go to within the UK for rebate management, and Enable's name came up time and time again as a partner to go to.  

McSorley says, “The Enable team is readily available whenever you need them, offering round-the-clock support for you and your business. Users within our organization have found Enable to be highly intuitive, requiring minimal training to get up to speed. I would recommend Enable to anyone who is seeking a long-term partner in their business.”

Special Pricing Agreements

Special Price Agreements (SPAs) play a vital role in the NHS ecosystem, with 99% being funded by the manufacturers. For AAH, SPAs are crucial in ensuring that they can offer their hospital customers the most competitive pricing precisely when it is needed. The turnover generated by SPAs amounts to approximately £25 million per month. As a distributor, AAH claims this income from manufacturers for the administration of these schemes. These SPAs cover the entirety of UK hospitals, serving a total of approximately 3,000 customers.

McSorley comments on their current SPAs process, "At present, we rely on an outdated Access database to manage our SPA program, which is inadequate and not designed specifically for handling SPA arrangements. Retrieving a significant volume of data for invoicing purposes is time-consuming, and it takes five to ten days to complete the reconciliation process once calculations are done. This inefficiency is a significant waste of time for us and has direct implications on our cash flow, delaying incoming funds by approximately 30 days."

Enable for SPA Management

McSorley says, “Enable's solution for SPAs will significantly accelerate the cash flow into our business. We will have the ability to invoice our manufacturing partners on a more frequent cycle, resulting in improved cash flow not only for us but also for our end customers.”

He continues, “This solution will provide us with greater transparency regarding the allocation of funds, allowing us to work closely with our manufacturer partners and share data more rapidly than ever before. By having a single source of truth, we can closely monitor our daily spending on SPAs and accurately forecast the amount we expect to bring back into the business.”

Advice For Rebate Management Success

McSorley says, "I would strongly advise anyone embarking on the journey of utilizing rebate management software to first gain a comprehensive and accurate understanding of the rebates present within their business. We discovered that various stakeholders held different perspectives on how calculations should be conducted, emphasizing the importance of establishing a clear and documented brief."

He continues, "We also understand the significance of having well-maintained master data. Therefore, it is highly beneficial to invest a small amount of time in ensuring that your master data is in excellent condition before transitioning to the Enable platform. This upfront investment will pay off in the long run and contribute to a smoother transition process."

Future Rebate Strategy

McSorley tells us, "In the coming six to twelve months, we anticipate significant growth in our rebate strategy. Our goal is to offer even more rebates to our customers, providing increased value as a result. We firmly believe that rebates are a precise and targeted approach to drive sustainable and profitable growth for both our customers and our own business.  

He continues, "To ensure the success of this strategy, we will continue to rely on Enable. Whether it involves consolidating the trading brands of all our businesses or identifying and optimizing deals that may not be yielding desired results, Enable will play a crucial role in our ongoing journey."

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