The Company

In early 2000’s a U.S.-based acquisition firm was founded to support locally owned building suppliers across the country. With over 140 locations in 29 states and managing 44 unique brands. By partnering with Enable, they seek to drive efficiencies, increase accuracy, and boost visibility within their rebate management processes.

The Director of Supply Chain with a background in private equity joined three years ago to introduce a refined supply chain strategy, aiming to bring structure and coherence to the company’s operations. Initially applied to one segment, this strategy has since expanded across other business segments as it proved effective.

Rebates Contribute to the Bottom Line

Following rapid mergers and acquisitions, the company's increased scale enables significant purchasing power with suppliers in each product category.

The Director says, “We believe that this volume merits more favorable pricing than standard market rates. Therefore, while we ask our suppliers to sell to us at the market price, we also seek additional benefits as a reward for the volume we provide, without eroding the market price for those products. Implementing rebates allows us to generate additional profit by rewarding suppliers with the volume they receive from us, aligning with the value we bring to them.”

Simple vs Complex Rebates

The Director explains, “I generally request straightforward rebate structures from our suppliers, but they often prefer more complex arrangements that optimize their own profitability.” They elaborate that some suppliers respond with varied rebate structures, assigning different percentages across specific products within categories—3% for one product, 5% for another.

“This added complexity is challenging for our current database system, which struggles to track purchases accurately at the SKU level,” they say. “To address this, we’re implementing Enable’s rebate management platform, which will help us manage and capture these intricate rebate agreements effectively.”

The Challenges

Time-consuming Spreadsheets  

Prior to embarking on this journey with Enable, the Director managed their vendor rebate programs using Excel spreadsheets, relying on vendors to report their spending periodically. However, they often found discrepancies in their reports.  

They recall, “This process was incredibly time-consuming, requiring me to chase down vendors for accurate reporting, input data into spreadsheets, and verify its accuracy. It typically took two to three weeks to complete this cycle, often bleeding into the next month before I could begin the process again. This administrative burden left me feeling constrained in my role, where I should have been focusing on negotiating contracts, managing suppliers, and developing products.”

Seven Complex ERP Systems

Following the initial Enable implementation, the system will cover approximately 20% of the company’s annual revenue, with plans to extend it to other segments based on time and resources.

The Director explains, “Currently, we operate with seven distinct ERP systems, complicating the transition process. Integrating these systems, establishing interfaces, and accurately capturing spend data present significant challenges. It's not simply a matter of copying and pasting once the initial implementation is complete, due to the complexity and diversity of our ERP landscape. While we are actively working on streamlining these processes, achieving full integration across all segments will require considerable time and effort.”

Keeping Track of Supplier Payments

Managing rebate claims and tracking payments has often been a struggle, particularly since rebates are typically low on suppliers' priority lists. The Director says, “Keeping track of communications and ensuring timely payments from suppliers can be cumbersome without a structured system like Enable in place.”

The Software

Enable Came Highly Recommended

Enable was discovered organically within the company, and the Director spent time reviewing an early implementation within another segment, hearing about the significant cost savings from improved reporting accuracy.

They tell us, “Their feedback was overwhelmingly positive—they identified numerous reporting errors that, once corrected, resulted in significant savings, totaling hundreds of thousands of dollars. This firsthand account convinced me of the value of implementing Enable into our next segment, focusing on construction supplies.”

Time Savings and Accuracy

The company’s decision to adopt Enable's platform was driven by two objectives: time savings and accuracy. Previously mired in the cumbersome process of managing vendor data through Excel spreadsheets and constantly following up with vendors for accurate reporting, The Director saw an opportunity to reclaim this time. By streamlining data management and automating reporting through Enable, they could redirect their efforts towards more strategic pursuits.

Importing ERP Data into Enable

The company exports data from their various ERPs into Enable daily. Ensuring the accuracy and cleanliness of this data is paramount, as it needs to be in a format that Enable can readily accept and process.  

They comment, “This process is crucial for capturing and formatting the data accurately, providing clear visibility into our rebate expenditures and spending patterns. The goal is to leverage this streamlined data flow to generate comprehensive reports that inform strategic decision-making within our distributor business.”

Data-Driven Negotiations

Enable's platform plays a crucial role in consolidating and presenting the company’s data in real-time, which significantly enhances their ability to negotiate effectively with suppliers.  

The Director comments, “Unlike our previous decentralized setup, Enable centralizes our data, providing clear visibility into our spending across different product categories. This real-time visibility allows me to promptly respond to suppliers' proposals for varying rebate percentages within specific product categories. I can quickly assess how these negotiations will impact our bottom line, empowering me to make informed decisions.”

They continue, “Having summarized spend data readily available allows me to evaluate whether to accept a proposed rebate in a particular subcategory of products or to advocate for more favorable terms. This capability ensures that I can maximize profitability through strategic rebate negotiations, leveraging our purchasing power effectively across the organization.”

Streamlining Claims Management

The Director tells us, “Enable offers a systematic approach to manage rebate claims. Within Enable, I can maintain a structured list that outlines where I stand with each supplier regarding rebate payments or credit memos. This functionality allows me to stay organized and update the status of each rebate claim efficiently. It provides transparency and clarity in the rebate management process, ensuring that I can effectively monitor and follow through on rebate agreements with suppliers.”

Strategic Rebate Management

As the company scales its operations, implementing a rebate strategy becomes essential. Despite dealing with numerous suppliers, the Director prioritizes those whose combined spending totals at least $500,000.

They explain, “I see Enable’s platform as instrumental in driving our strategy and providing the necessary structure to execute it effectively. It enables me to present a clear path to leadership within my company, demonstrating how we can manage rebate programs in a systematic and manageable manner. Unlike vague discussions about potential earnings, Enable equips us with factual data and comprehensive numbers presented in a professional format.”

They continue, “Enable ensures that when I present rebate opportunities to the executive team, the information is clear, actionable, and easy to understand. It streamlines the decision-making process, allowing us to quickly determine how we can implement these strategies across multiple companies within our enterprise. Enable's platform transforms what could be a complex and ambiguous process into a straightforward and informed approach to maximizing our profitability through strategic rebate management.”