Why MacArthur Co. Knew Better Rebate Management Was Dollars Well Spent
MacArthur Company is based in St. Paul, Minnesota. Founded in 1913, they’ve been around for a long time – more than 100 years, in fact. With 1,100 employees, they are primarily a building distribution company. They have a pretty diverse product group representing various industries, but their primary focus is on building products that they sell in around 50 locations across approximately 35 states in the USA.
It Was Time To Move Away From Spreadsheets
Mark Larson is the CFO of MacArthur Company. In the past, the company’s upper management typically managed rebates and vendor-specific deals by negotiating with vendors annually. They would then watch the money and track deals using Excel spreadsheets. However, as the company grew, the number of deals grew, and the complexity grew, they knew they needed a better solution.
Larson says, “On the back end, we've primarily utilized just the basic Excel spreadsheets that we've had to manage. Over the years, as our company has grown and as the dollars have grown, that process we've seen to be lacking in verification and in tracking, and just managing overall rebate deals that we have, especially with the vendors.”
Rebates Are Critical to MacArthur’s Profitability
Rebates are an essential revenue driven for MacArthur. Larson explains that some of their rebate deals with vendors are worth major dollars. “It’s a big, big part of our profitability for our company,” he notes, “And so we’re always looking obviously to maximize that.”
Over time, they realized that it wasn’t sufficient just to manage the receipt of rebates, but also to manage their purchasing in order to improve their purchase planning. Since they are also a 100% employee-owned company, they knew that investing in a tool to make them more profitable to shareholders, which is all their employees, would be dollars well spent.
Additionally, with increasing prices across the industry, they realized that the return on deals with their vendors was becoming even more important.
Larson says, “We feel that if we are proactive and we have a tool that can help us be proactive, we can maximize the purchasing and the rebate dollars that go along with that. Obviously, that just enhances our profitability.”
A Specialized Rebate Management System
The very specialized nature of Enable’s software appealed to MacArthur. In the past they had tried, unsuccessfully, to manage the subtle, and complex nuances involved in their rebate management including the number of deals, the many different vendors they deal with, and the many rebate variations.
When they turned to Enable, the demos validated their initial feeling that Enable would be able to do this for them, and they moved forward reasonably quickly with the rebate management solution.
Within a month or so, they were up and running. Larson says, “We were really very happy with the speed with which that was accomplished. The team that we've worked with has been very, very professional, very focused on taking care of our needs, and the different nuances that exist within our data.”
Larson continues, “We had tried to, in the past, come up with solutions with some other partners that would address the rebate vendor management situation. But we just did not find anything, or were not able to come up with anything that addressed the many different nuances that exist within the rebate programs that we have, and the many different vendors that we deal with.
Tracking Rebates More Precisely Today, Using Data To Make Proactive Purchasing In Future
Although it’s early days, they feel they have already been able to maximize the rebate dollars they are entitled to and have already found missing rebate that vendors don’t even know is due.
Additionally, they have also been able to determine the rebate dollars they anticipate earning much more precisely than in the past. Larson explains that while the tool has been extremely beneficial in assessing past performance, they intend to use it even more fully moving forward.
He says, “We anticipate, as we go forward in the next few months, that we will be able to utilize it as more of a proactive tool in purchasing, especially where we can see our current year.”
Once they can assess their current purchases and compare these to rebate opportunities, he believes that they may be able to take advantage of this knowledge to adjust their purchasing and get even better deals. Larson believes “we can better make decisions that are smart in terms of buying, and how much we’re buying from particular vendors. And we feel like that’s going to be the next benefit we’re going to see from Enable”.
The Enable Team Brought Them Confidence
Since purchasing Enable, MacArthur has found themselves firmly in control of their rebate deals and feeling confident about their future. For them, it has been dollars well spent that will set them up for future savings, improved deal accuracy, and complete data visibility. But it’s not just Enable’s software that’s given MacArthur confidence and efficiency; it’s the entire Enable team.
“We were really very happy with the speed with which that was accomplished. The team that we've worked with has been very, very professional, very focused on taking care of our needs, and the different nuances that exist within our data.”