ERIKS is a specialized industrial service provider known for its extensive range of engineering components, technical services, and tailored solutions aimed at enhancing their customers' product performance while reducing the total cost of ownership. With a turnover of approximately €1.9 billion, the company operates on a global scale, serving as a significant player in the industry. However, they faced a challenge when it came to managing B2B customer rebates, a process that had become highly intricate.
To address this issue and achieve their overarching corporate goal of "making industry work better," ERIKS sought the expertise of Enable, a company specialized in streamlining rebate management. Stijn van Roosmalen, the European Procurement Director at ERIKS, holds responsibility for direct material sourcing across Europe and leads a Procurement team comprising over 50 professionals. By partnering with Enable, ERIKS aimed to simplify and optimize their customer rebate processes, enabling them to enhance their overall service delivery and align with their broader corporate objective.
ERP Not Fit for Purpose
In 2020, when Stijn joined ERIKS, the company was grappling with various ERP systems across multiple countries, suppliers, and diverse formulas for rebate calculation. His primary objective upon joining was to shift the company's focus towards enhancing internal services for all stakeholders, particularly by optimizing the procurement department. In line with his goal of streamlining and improving ERIKS' processes, Stijn recognized the need for significant improvements in how rebates were managed, given their complexity and challenges.
He explains, “Our goal is to improve the relationship we have with suppliers and the conditions that we negotiate with, and focus on factors like quality, delivery performance, compliance etc.”
Since ERIKS works with wholesale and distribution, rebates and bonuses are a big portion of the conditions they negotiate with suppliers. Stijn explains, “It's fairly complex because ERIKS has a central entity, but also has local country entities and some still have legacy ERP systems.”
He continues, “There's a huge focus and huge investment trying to bring that together. But if you look at different countries, different ERP systems, a whole lot of suppliers, and then also, again, different formulas where the rebates and bonuses are calculated upon turnover or more on growth etc. if you add that all up and then also have to calculate back which ERIKS's entity the rebates and the bonuses we collect have to be attributed to, it's a very complex task.”
Manual Tasks and Finding Missing Rebate
Stijn confesses, “After gathering all our data, it's quite a manual task. So, we rely on what the suppliers deliver to us in information, and on the other end, it's a manual task to double check. There is some room for error there, and I think the risk of missing out on rebates or wrong calculations, maybe based on wrong assumptions, really led to the need of a system which could support us.”
Stijn also hoped that a rebate management solution like Enable would help reduce their manual effort and the number of hours they needed to put into calculating and executing rebate management, while also eliminating the room for error and finding additional revenue. It turns out, he was right.
He continues, “The software has already paid for itself, during rebate settlements at the end of 2021, we disputed a rebate, which landed us a higher band and netted us an additional €200k.”
How They Found Enable
Stijn explains, “When we explored the market, we quickly realized that managing customer rebates is a far more intricate task than it may appear at first glance. It became evident that a dedicated and specialized system was essential for addressing our needs effectively." After doing thorough research Stijn says they discovered, “Enable is also one of the few providers who really specialize into a rebate management system.”
Their thorough selection process, including demos, onboarding proposals, and more eventually led them to choose Enable. Since then, ERIKS has worked closely with Enable’s team to combine their very complex needs – including different countries, suppliers and variety of deals, streamlined up and running.
Stijn praises Enable, “I must say that the team is really great. They really are keen to properly onboard the system and they are very customer focused.”
Acting On Day-to-day Insights
ERIKS is already reaping the benefits of bringing all their rebate programs together in one system. As Stijn explains, “What we really see from Enable’s rebate management software is how it makes it all possible to reduce the complexity and give day-to-day insights on the actual status of rebates.”
Previously, they had to undertake very manual tasks to reconcile rebates, “So you obviously only do that once a year or max, twice a year”, he explains. But today, things are very different. “Now we really have day-to-day insight! With the push of the button we can see how far we are from a certain threshold where we might be able to get a rebate payout from one of our suppliers, and given the complexity, we weren't able to do so before.”
The up-to-date nature of Enable’s rebate management system allows Stijn’s team to act on the insights they’re receiving from their suppliers and companies all over the world, which means they can take positive, proactive action. “We can also now act upon that,” explains, Stijn, “So it should not only reduce workload, but also really tangible monetize benefits.”
Tangibly Making Money Thanks to Rebate Management Software
Not only have they already improved their rebate collection, but they have also already identified rebate potential they could not have identified in the past. Stijn says, “By the end of last year, we actually saw that with minor additional orders, we were able to achieve the next rebate threshold and collect more rebates than we would initially have done.”
By monitoring their purchasing habits and comparing it with the agreements they have in place, Stijn says, “We did order some extra to be put on stock which entitled us to higher rebates. So we actually tangibly already made money out of this!”
By using Enable as a single source of truth for managing their rebates, even further insights and opportunities are possible. At a glance, Stijn anticipates being able to ask and get answers to questions including “Where are the rebates? What can we track? Where can we optimize?” Centralized data makes this all possible.
The future looks bright for ERIKS’ rebates, thanks to their proactive attitude to supplier and stakeholder relationships, and the efficiency gained with Enable’s rebate management software.
“The software has already paid for itself, during rebate settlements at the end of 2021, we disputed a rebate, which landed us a higher band and netted us an additional €200k.”
Stijn van Roosmalen | European Procurement Director