Werner Electric Supply is a family-owned distributor founded in 1948 and located in Wisconsin. They stock over 30,000 products with a focus on selling high-quality electrical, lighting, datacom, pneumatic, safety and automation solutions. They deal with numerous stocking vendor partners and manage hundreds of incentive programs across their vendor portfolio.
Ben Nitz, Director of Strategic Vendor Management, explained that in early 2020, Werner needed to make investments in automating their rebate management process to help them be more strategic and less manual.
Nitz says, “I see a strong need for digital transformation within the electrical industry. Right now, it feels like the industry is behind the times when it comes to automation and a larger digital journey. Rebates are a critical piece of that transformation process. So, as a growing business we knew we wanted to make investments there.”
Member of AD
AD handles the negotiation of rebate programs on Werner Electric's behalf. The programs AD negotiates focus on specific products and serve as a foundation for growth and expansion. Werner Electric is still in the process of maturing their rebate programs, which comes with challenges in negotiation and encouraging their team to view rebates as a valuable tool for both parties involved.
“Our goal is to grow our business in partnership with suppliers, while also reducing costs through rebates. This creates a win-win situation, where both sides benefit. Suppliers are interested in volume and units, while we aim to make a profit. As the business grows, both parties should share in the rewards. Rebates serve as an excellent tool for achieving this. However, our main challenge lies in ensuring that negotiators within our organization recognize the leverage provided by rebates. Thankfully, Enable's software has highlighted this issue, prompting us to transition from spreadsheets, traditionally associated with finance, to a platform that allows everyone in our organization to clearly see the tangible benefits available to them as negotiators.”
For Werner Electric, rebate management was time consuming. Nitz, Strategic Vendor Management, spent too much of his time in the weeds in spreadsheets. These spreadsheets had grown increasingly unwieldy over time. Nitz said, “It was challenging to start looking midyear and projecting programs to see where we were heading as a business, to understand if we were able to maximize programs and take advantage of them, to earn more dollars.” Because of these out-of-control spreadsheets, Nitz was spending too much time, including weekends, forecasting towards year end.
Nitz says, “We have moved away from relying on spreadsheets. The lack of a single source of truth for rebates always posed a challenge for us. In my role, which involves working closely with vendors and strategically negotiating new programs, spending time on spreadsheet tasks meant less time available for being proactive and fostering stronger relationships and partnerships with our vendors. We have recognized the need to prioritize activities that contribute directly to expanding those relationships and partnerships, rather than being consumed by spreadsheet maintenance.”
Providing accurate accruals throughout the year for their finance team had also become increasingly difficult, resulting in missed opportunities. Nitz told us, “It was all we could do to deliver estimates or conservative estimates, and that led to us being off come year end. We had to fix that.”
Complicating all these factors was that Werner Electric’s process relied on only a handful of key people. According to Nitz, only he and one other person knew the process. Jokingly, he said, “If I got hit by a bus or won the lottery, we'd be in a world of pain.”
Early in 2022, Werner Electric automated their rebate management process with Enable, and they are already seeing great results from their investment.
Build vs Buy
Before implementing Enable, Werner evaluated multiple options, including building their own automated systems leveraging Power BI. However, they quickly came to realize that their IT department’s project load wouldn’t allow them to manage an in-house rebate solution.
Since an in-house solution simply didn’t make sense, Werner looked at what was available within their existing ERP system. They hoped they’d find tools to help them manage their incentive programs there. Although their ERP did have some functionality to manage incentives, that functionality couldn’t handle their complex programs.
Finally, Werner looked at investing in a third-party solution. Their search led them to Enable. They were concerned about transferring all their data into a third-party system like Enable and the amount of work involved to ensure everything ran smoothly. Nitz said, “We knew we’d have a lot of work cut out for us. We would need to build out programs within the tool and get the data exchange going, but, at the end of the day, we thought the automation would make all the trouble worth it. So we decided to invest in Enable as a solution and got everything up and running in March of this year.”
Overcoming Rebate Complexity
Throughout the software evaluation process, Werner knew they needed a rebate management system capable of handling the terms of their existing rebate programs. While they have some basic incentives, there are extremely complex incentive programs based on weights, certain product groups and exclusions.
To their relief, Enable could handle it all. “There wasn't a single program of ours that we threw at the Enable implementation team that they couldn’t help us work through within their tool,” Nitz said.
Clear Visibility into Rebate Programs
With Enable’s help, Werner was able to track progress towards tier thresholds, so they knew what they needed to do to maximize their earnings and rebate programs. They also took advantage of the opportunity to auto-renew old programs and set up simplified new programs so that anyone in the team could manage rebates more efficiently.
Clear reporting and robust dashboards gave Werner a clear view into what was going on within their programs. They knew at a glance whether or not they were on track or running short, and could easily dive into the opportunities or risks of a program. “There were no more manual spreadsheets,” Nitz said. “We have great visibility. Enable gives us a single source of truth for both AD and non-AD programs.”
Now, Werner can see how programs are performing quickly and, more importantly, accurately.
Werner Electric places significant emphasis on collaboration, both internally and with suppliers. This includes communication among different teams such as finance, procurement, buyers, and suppliers themselves. The Enable platform has played a crucial role in breaking down the barriers between these teams. For instance, rebates, which used to be solely a finance concern despite being a negotiated outcome from category managers or the merchandise team, are now managed through the Enable platform which is accessible to all.
“At Werner Electric, we place a strong emphasis on fostering a collaborative win-win situation. We recognize the importance of comprehending the potential opportunities that exist for both parties involved, enabling us to establish mutually beneficial agreements. As a vertically integrated company, our approach to engaging with suppliers has undergone a transformation. It is no longer viewed as an unnecessary evil, but rather as a growth opportunity that we actively embrace. This shift in perspective has brought about positive changes in how we approach and navigate supplier conversations.”
"Enable is a powerful, collaborative tool, enabling us to have productive discussions with our suppliers. The platform's data-driven approach has simplified these interactions, eliminated unnecessary complexity and streamlined our processes. As a result, we've increased our revenue and explored additional income opportunities by scaling up our operations.”
Because rebate programs impact a significant portion of the company’s bottom line, it was critical for all key stakeholders to have transparency into their data from the start. Enable made that possible. Now, Werner has clear visibility into the performance of their programs and the opportunity to strategize on their KPIs.
Nitz said, “You can't argue with the data that's coming through unless your data is bad. Because we’re certain our data is good, it always shows us the truth of the situation, and having access to that organized data within the platform is eye-opening.”
For a company that had struggled to make their numbers match, suddenly having clear and accurate data was a revelation. “We spent a good amount of time getting that data connection automated and accurate,” Nitz added.
Getting the Calculations and Earnings Right
There are various phases to implementing Enable, including building programs and ensuring data flow before comparing Enable’s calculations against a legacy process. All these parts of implementation work together to ensure that the calculations and volumes running through the programs line up accurately with your legacy systems. For Werner, automating their rebate calculations made it easier to provide intuitive forecasts into what their earnings would be, allowing them to maximize growth.
Nitz said, “Historically, when an incentive payment came in, we estimated what our earnings were or we would look at some ad hoc reports. Now, thanks to Enable, we can look at them as often as we want and know they are correct. Our finance team as well as our products and marketing teams have way more visibility.”
Unlocking New Revenue Opportunities
With Enable up and running, Werner Electric can see where their spend is or isn’t hitting in a program. They can also filter by product category or vendor to see if there is revenue leakage — a real eye-opening experience when, previously, Werner didn’t have any visibility into data.
Their finance team has also seen major benefits. Previously, they relied on what Nitz called a “big ugly spreadsheet.” Editing the massive spreadsheet was incredibly difficult, especially when they had to code off incentive credits and incoming checks within their ERP.
Now, it’s easy for the team to see when their earnings are due and how late payments are coming in. There are solutions to allocate payments and do write-offs and adjustments all within Enable’s platform.
“We're spending more time being strategic, negotiating new programs and maximizing programs versus just managing what we have already, which will make us far more profitable. This will prepare us for the future and give us the ability to scale.”
More Time to be More Strategic
Automating their rebate management means Nitz and his team spend less time bouncing around systems and more time negotiating and working strategically with other internal teams.
“It's going to free up a lot of hours early in the year when we're working on negotiating new programs or renewing new programs. Mid-year when we're trying to get early projections on how we're running and in Q4 when you're really trying to dial in with the accounting team where we're going to finish up the year in terms of earnings once all the growth programs hit.”
Ben Nitz | Director of Strategic Vendor Management