In 1968, Cromwell Tools embarked on its journey to establish itself as a reliable provider of Maintenance, Repair, and Operations (MRO) supplies, offering a wide range of industrial products such as hand tools, power tools, cutting tools, and personal protective equipment (PPE). The company's operations have grown significantly, spanning across the United Kingdom, South Africa, Asia and India, with a network of 38 branches serving over 30,000 customers and collaborating with 300+ suppliers.
Currently, Alan Milner serves as the Commercial Director at Cromwell, with the primary responsibility of safeguarding the company's sustained profitability.
Rebates Impact Profitability
Cromwell Tools administers a diverse range of rebates, some of which are straightforward, involving a percentage of spending returned. In other instances, these rebates depend on factors like marketing funds, intricate product categories and customer segments.
Milner says, "Rebates frequently serve as the deciding factor between achieving profitability and facing losses. They play a pivotal role in safeguarding the profitability of our sales, making them exceptionally crucial, especially within this industry. Given the necessity to operate within narrow profit margins at times, these rebates are the cornerstone that enables us to persevere in this fiercely competitive market."
Rebate Goals and Objectives
Milner explains, “We employ rebates from two distinct perspectives, each with its own set of objectives. When dealing with our suppliers, our primary goal is to maximize control over our profits while safeguarding cost prices. This represents a critical objective in our supplier-centric approach. On the other hand, when it comes to our customers, our aim is to influence their purchasing behavior. For instance, if a customer is approaching a specific rebate bracket, we intend to incentivize additional spending to ensure they meet the criteria for the rebate. The objective is to optimize profitability and channel as much profit as possible into our business through these rebate mechanisms.”
Before implementing Enable, Cromwell Tools heavily relied on Excel spreadsheets for rebate management, which posed a significant vulnerability as it constituted a single point of failure. Milner comments, “This approach was characterized by complexity, requiring a considerable amount of in-house coding and automation to achieve the desired outcomes. However, it felt somewhat cumbersome, and the risk of relying solely on one individual who had built this system was a major concern for us. Thus, eliminating this significant risk became a top priority.”
Small Team Communicating With 300+ Suppliers
Managing rebates was a highly demanding administrative task for Cromwell Tools, as they engage with approximately 300 to 400 suppliers who provide them with rebates. In turn, they offer rebates to about 80 customers based on their spending.
Milner comments, “The complexity of handling numerous products and diverse customer segments necessitates individualized communication for each, and much of this communication was conducted through email. This posed a significant challenge for our relatively small team to effectively manage.”
He continues, “Automation became a crucial solution, particularly because a substantial portion of the knowledge and processes resided in the minds of team members, creating a significant risk for our operations. Overcoming this challenge was of paramount importance to us.”
At Cromwell Tools, the primary challenge in dealing with a large number of suppliers was the negotiation process. It often involved a back-and-forth exchange of emails among various category managers, resulting in considerable time delays.
Milner says, “Maintaining a single, definitive source of truth for these negotiations became a difficult task, potentially leaving untapped profit opportunities on the table. It became increasingly difficult to distinguish between signed contracts and those that were not, leading to a lack of clear traceability, which presented a significant hurdle for our operations.”
Reliance On Suppliers for Rebate Owed
Milner explains, “Prior to implementing Enable, we depended on suppliers to provide rough estimates of our rebate owed. This approach posed a significant challenge when it came to accurately accruing these payments. While there were occasions when this worked in our favor and we received more than expected, there were also instances where it went the other way, resulting in either pleasant surprises or disappointments. In any case, it was a challenging situation for both parties, making it difficult to effectively manage profitability when we lacked complete control over the overall picture.”
Improving Supplier Communication
Milner says, “The collaboration feature offered by Enable ensures that both parties involved in the rebate process can maintain a clear and updated overview of their agreements. This transparency is vital during the negotiation phase, as it allows both sides to have complete visibility into the entire process. Without this transparency, there is a risk of returning to a situation where the details of the rebate agreements are unclear, resulting in a loss of value for both parties.”
He continues, “With Collaborator, our category managers have the ability to engage in meaningful conversations with the right suppliers at the right time. They can utilize this information to devise new marketing strategies, ultimately fostering more mutually beneficial relationships with our suppliers.”
The Watchlist feature in Enable empowers Cromwell by providing visibility into their proximity to specific rebate thresholds. This feature plays a crucial role in holding their category managers accountable, ensuring they exert maximum effort in dealing with suppliers. As a result, when approaching the end of the year, Cromwell can confidently pinpoint where to direct their focus among the 300+ suppliers offering rebates, allowing for more efficient and targeted efforts.
Milner says, "Prior to implementing Enable, reaching that level of insight was a significant challenge, and it demanded considerable effort. In the realm of rebates and managing procurement expenditures, speed is of the essence. Having access to real-time information via the Watchlist App is invaluable as it enables us to engage in meaningful conversations with our suppliers, facilitating more effective spending. This information not only signals when we should initiate discussions with suppliers but also indicates when we should communicate with our customers, informing them about their proximity to certain thresholds and encouraging additional spending."
He continues, "We have several category managers who need to determine where to direct their attention and efforts, especially as we approach the end of the year. Q4 is often the period when many businesses strive to align with their annual plans, and it's crucial to make strategic choices about where to focus to maximize our return on investment. Real-time information allows us to immediately engage in meaningful conversations instead of spending weeks trying to grasp the complete situation."
Milner tells us, “The Executive Dashboard feature in Enable is a valuable asset for both my team and me. It eliminates the need for any additional effort in conveying information to our leadership team. This means they are well-informed and can actively contribute to decision-making while ensuring we have the necessary resources to make the most out of the year. In the past, a significant amount of manual reporting was necessary, which consumed a considerable amount of my time and my team's time. With this feature, the information is readily available at the touch of a button, giving us more time back.”
Eliminating Key Person Dependency
The most significant benefit Cromwell Tools has gained from using Enable is the elimination of risks associated with having critical knowledge stored in individuals' minds. Now, all that knowledge and skillset resides within the rebate management platform.
Milner says, “This transformation has provided me with the opportunity to witness members of my team transition to focusing on different areas of our work, whereas in the past, they would have had to carry that knowledge with them. For instance, there's a team member who has been managing rebates in various roles over the years because she held that knowledge within her. Releasing her from these duties was a challenge. However, with everything now centralized in Enable, we've been able to free her up to focus on other responsibilities and continue her personal development within the organization.”
Saving 75% Admin Time
Having Enable as their single source of truth has significantly accelerated Cromwell’s operations. They no longer need to be overly concerned about the transparency challenges they once encountered, allowing them to concentrate on making the most appropriate decisions with their suppliers when they are most relevant.
Milner says, “Enable has been instrumental in reducing administration time by approximately 75% when it comes to managing and overseeing rebates, enabling both my team and me to reallocate that time towards numerous value-added tasks.”
Milner says, “I chose Enable because they are a recognized market leader in the specialized field of rebate management. Their strong presence in this niche environment was a key factor in my decision. Additionally, I was impressed by their impressive roster of clients facing similar challenges, which further instilled confidence in Enable as the right choice for us.”
He continues, “I would highly recommend Enable, primarily due to the exceptional partnership they provide. It truly felt like an extension of our own team, and they played a pivotal role in helping us move swiftly. Beyond the partnership, the tool itself and its ability to drive profit are crucial in a fiercely competitive market space, making Enable an invaluable resource.”
Fantastic Support from Enable
Milner comments, “The support we've received from Enable has been exceptionally impressive. There were occasions when we required accelerated assistance and Enable was there to support us promptly. Their humble and adaptable approach, working at our pace during challenging times, was greatly appreciated. All in all, I couldn't have asked for more, and Enable's support has been truly fantastic.”
Enable has reduced administration time by approximately 75%, allowing reallocation of time toward more value-added tasks.
Critical knowledge is no longer dependent on individuals, enabling team members to focus on different areas of work.
Enable's features, such as the Watchlist App and Executive Dashboard, enable strategic focus on profitability, contributing to a competitive edge in the market.