The Company

Building Materials Nationwide is an online business dedicated to selling building materials to trade customers. They offer a comprehensive range of products, from plasterboards to bricks, blocks, and cement. Operating on a buy-and-sell model, the company does not hold any physical stock and works with over 600 suppliers. Among these, a core group of 50 to 60 suppliers accounts for a significant portion of their spending.

Establishing rebate targets with these key suppliers not only provides a valuable cash boost at the end of the year but also enables the company to monitor supplier performance and standards. Ashley Heather, Head of Strategic Operations, emphasizes this relationship, stating, "If suppliers offer incentives for trade, they are also responsible for ensuring that the quality of service meets expectations; otherwise, the relationship may falter."

Rebate programs at Building Materials Nationwide are relatively straightforward. Most agreements involve a flat fee ranging from 2% to 4%. Additionally, some regular suppliers offer structured incentives, granting extra percentages once a certain spending threshold is reached. Currently, the company has about four or five suppliers with whom they negotiate invoice settlement discounts, providing a small percentage back if invoices are settled early.

All agreements are traditionally set for a calendar year, beginning in January, and concluding in December. Ashley notes that this structure results in a nice profit contribution to the company’s profit and loss statement at the end of the year: "Out of those 674 suppliers, there are some we haven't used in years and others we might have set up but only used once. We have a core group of 50 suppliers, and there are about 10 more we can potentially utilize. However, we've reached a certain level with building our relationships this way."

In his role, Ashley manages and analyzes all rebates, oversees financial operations, and ensures the overall day-to-day running of the business. His contributions are essential for maintaining smooth operations and fostering effective collaboration among team members.

The Challenges

Complex Calculations

As Building Materials Nationwide approached the end of the year, complexities arose from rebate calculations. To address these challenges, the company is transitioning to a new ERP system, SAP, which will integrate with Enable. This automation aims to streamline processes, making life easier and reducing the time required by everyone involved.

Rebate Reconciliation

Rebate reconciliation posed a significant challenge for Building Materials Nationwide due to its disorganized nature and tracking methods. Ashley tells us, “Previously, the process relied on one person managing a spreadsheet in one location while another Google sheet existed elsewhere, leading to a mismatch in data. Me and the team recognized the need for a centralized rebate management platform like Enable to accurately track and manage rebates.”

Time Wasted  

Ashley highlights the inefficiencies in their previous rebate management process, stating, "There's a significant amount of work involved in chasing suppliers to secure new deals, setting them up, and tracking everything in spreadsheets. In total, it probably amounts to a good month's worth of work in terms of hours."

Missed Rebate Earnings

For Building Materials Nationwide, rebates make up a valuable chunk of their P&L that makes it well worth pursuing. Unfortunately, there were times when the figures didn’t match up. Ashley explains, "I imagine we have missed out on rebate earnings. I took over this responsibility about a year ago, and I definitely believe there have been cases where the suppliers had one figure, and we had another, leading to compromises where we met somewhere in the middle. Implementing a more organized approach will definitely help improve accuracy."

Chasing Down Agreements

Before Enable, signing off agreements primarily involving reaching out to the company’s main suppliers. As Ashley explains, "In the building trade, many people here have been trading with these suppliers and have built up contacts." This familiarity made it easier to approach suppliers, and the agreements were quickly scanned, signed, and placed into a folder. However, this method relied heavily on human organization, leading to gaps where agreements were missed.  

When Ashley took over, he spent considerable time chasing down these missing agreements. He reflects, "I had to spend a good bit of time following up on agreements that weren’t in there." This experience underscored the importance of having a centralized system like Enable, which houses all agreements in one place, ensuring everything is signed off and organized, significantly streamlining the process.

The Software

Deeper Analysis of Spend

Ashley states, "We've only really started looking at this since we implemented the software. Previously, our approach was haphazard and not organized. Now, we’re analyzing our spending from last year and comparing it to this year. As we approach the winter and autumn months, we’re reflecting on our spending patterns. For instance, there's one supplier with whom we've doubled our spending compared to last year. We're preparing to enter into a conversation with them to discuss our increased business and request a higher percentage in return. So, at this moment in time, that’s our focus."

Exceptional Support

Building Materials Nationwide has experienced exceptional support from Enable. The team is consistently available and responsive, ensuring that any queries or issues are addressed promptly. Ashley notes, “They are always on hand, quick with response times, and the team is friendly.” This positive interaction fosters a seamless and enjoyable communication experience, contributing to a strong working relationship.

Efficient Agreement Approvals

The agreement approval process at Building Materials Nationwide has become significantly more efficient with the implementation of Enable. Ashley notes, "It just cuts down on time. I'm not having to chase people via email anymore." The collaboration feature allows him to send documents directly, and if he needs to resend anything, he can easily do so through the Enable platform.

"I get notifications and can see when they’ve completed their part," he adds, highlighting the ease of tracking progress. This streamlined approach simplifies organization, as it eliminates the risk of emails getting lost in the shuffle. With a clear record maintained within the system, it’s straightforward to see who is responsible for signing each agreement, ultimately making life much easier for the team.

Accuracy of Earnings

The accuracy and efficiency of tracking supplier earnings have greatly improved for Building Materials Nationwide. Ashley explains, "If my manager asks me, 'Okay, how much should we be earning with X supplier?' it doesn't take ages to find that information out." With just two or three clicks, he can access a comprehensive report, enabling him to provide the necessary details swiftly. "So yeah, it’s the time-saving and the accuracy that really stand out," he concludes, emphasizing how Enable enhances their operational effectiveness.

Reduction In Errors and Discrepancies

Ashley highlights the improved accuracy of their figures: "I can't put it down on paper, but it has saved a lot of hassle and heartache, especially towards the end of the year." Accurate data is crucial for making informed decisions, particularly during busy periods like year-end reporting. The reduction in errors and discrepancies means that the team can approach year-end activities with greater confidence and less stress, ultimately leading to a smoother workflow and better outcomes

Advanced Reporting

Building Materials Nationwide is poised to leverage advanced reporting tools to enhance their ability to track spending with suppliers. By examining year-on-year data, the team can gain valuable insights into their purchasing patterns and supplier performance. This analytical approach not only allows for more informed decision-making but also helps identify opportunities for improvement.

Ashley mentions, "We're looking at year-on-year data, and that's where we've identified our first supplier that we're going to try and increase our engagement with." This proactive strategy aims to strengthen supplier relationships and negotiate better terms, ultimately contributing to the company's growth and profitability.

Significant Time Saved

"The ROI is really the one you can't measure," Ashley explains. "It's the time-saving aspect that stands out the most." By streamlining their processes with Enable, Building Materials Nationwide has been able to reduce the time spent on manual tasks and chasing down information. This efficiency translates into more time for strategic initiatives and less frustration for the team.

SAP Integration

Currently, the payment process is manual and primarily managed by Ashley, who notes, "At the minute, it's a manual process occupied by me, and there are always thousands, hundreds of payments a month to handle. The degree of accuracy will be further improved with the Enable and SAP integration."

He emphasizes the benefits of this integration, stating, "It's just going to cut down a lot of time and reduce human error. With everything consolidated in one place and nearly live data accessible, the new system will streamline operations and improve efficiency significantly.”

Potential to Offer Customer Rebates

At present, Building Materials Nationwide does not provide customer rebates, but they have received inquiries regarding this option. Such requests have emerged from several larger clients, particularly as the company shifts towards a trade-only model. Ashley notes, "It's another tool we could have in our toolbox to offer to people." He recognizes the growth potential in this area, stating, "So there's definitely further down the line work we can do on customer rebates and tracking them as this business develops."