Turning supply chain chaos into revenue with rebates

Turning supply chain chaos into revenue with rebates

Amid the global uncertainty and chaos that COVID and other factors have had on global supply chains, it would be nice if something could remain certain. Fortunately, using digital intelligence, sound systems, and effective rebate programs are one way of turning chaos into revenue.

The current state of the supply chain

The global supply chain is broken. Ask anyone waiting six months or more for a car to be delivered, a bicycle part, a washing machine, or even a highly specialized tool. The already overwhelmed (but generally functioning) system was operating on archaic principles before COVID. Factors like just-in-time principles, incredibly tight margins, and workforce vulnerabilities kept it working on a knife edge. But, as we all know, COVID tipped the scales: turning it from a usually smooth process, as far as end-user buyers were concerned, to complete chaos that exposed the inherent dangers lurking beneath the surface. The consequences have not been pretty.

So it’s hardly surprising that research by SAP and Regina Corso Consulting showed that nearly half (49%) of supply chain professionals have said that shortages and disruptions are keeping them up at night.

Nevertheless, some have weathered the storm and know that improving visibility across every aspect of the supply chain is critical. As Fictiv’s State of Manufacturing Report says, “a majority (59%) of companies said improving supply chain visibility is their top priority”. If it isn’t your top priority, perhaps this blog post will convince you it should be.

The make-or-break role of digital intelligence

The Pandemic taught us that, while there are some things digital intelligence can’t change (like how many microchips are being produced), knowledge is power. In an article about an SAP study that found procurement is vital to manage supply chain disruption, SAP says, “Companies that are running what we call the intelligent enterprise have emerged as winners because they’re able to connect their business company digitally to their trading partners and suppliers all over the world.” At Enable, we know the same applies to companies using intelligent software to help manage their rebate processes.

The principles underpinning sound ERP systems and intelligent rebate management tools are the same: Winners aim to improve supplier and trading partner visibility and collaboration; predict demand vs. capacity to improve supply chain performance; and ultimately build better, stronger relationships between all parties in the supply chain to improve customer satisfaction.

Why rebates benefit those in the supply chain

While rebates are just a fraction of the picture of a complex supply chain, they can be a critical component. Ask anyone using rebate management software to help them see and influence buying patterns, and they’ll tell you that this technology is helping them scale. For example, CarParts is using Enable to help them become a $1B company. AD is scaling to $45B revenue with the same technology. And distributors like STEMCO discovered $35k in overpayments with Enable’s collaborative tools.

The benefits of effective rebate management include:

- Helping you outperform your supply chain competition by competing more effectively on price and service levels

- Incentivizing loyalty

- Improving the alignment between trading partners.

More importantly, within the context of supply chain chaos, integrating information that all relevant supply chain partners use is key to reducing risk and increasing productivity, market share, and revenue for everyone, as well as building healthy relationships between stakeholders.

As our CEO, Andrew Butt, explains, in an article in SupplyChainBrain, “Suppliers and distributors can no longer afford to ignore supply-chain integration. From the alignment of goals and operations across stakeholders to the accurate calculation and negotiation of rebate agreements, companies that use the powerful digital tools at their disposal will be in a stronger position to integrate their supply chains, increase productivity, and prepare for whatever the future may hold.”

What you can do to leverage rebates more effectively

At this critical time when the whole supply chain is under stress, it’s more important than ever to know and understand what stock is being held, where it’s being sold, what’s being bought, and what rebates are being given based on volumes. In some cases, the ability to claw back every cent or penny of rebate can literally make the difference between a company’s profit and loss. If you’re sitting on the other side, being able to explain to your distributors why your rebate allocation looks different from theirs makes the difference between a collaborative and an adversarial relationship.

As we explain in the blog post on 5 ways to mitigate supply chain risks with rebate management software, improving supplier collaboration is crucial. A Forbes article reports that 47% of supplier collaborations fail – not simply because of a lack of policies but because of a lack of commitment or trust. Using effective rebate management software improves that trust and forms the foundation of genuinely collaborative relationships between trading partners. Using a good collaboration platform that improves information exchange reduces the chance of misinformation which, in turn, enhances trust.

How digital tools can help you navigate the chaos and turn it into profitable growth

You don’t know what you don’t know

It seems trite, but it’s true. Deloitte’s Global 2021 Chief Procurement Officer Survey found that only 18% of Chief Procurement Officers were tracking their risks, and only 15% had full visibility into their supply chains. Rebate management platforms like Enable reduce risk by providing complete visibility of rebates and incentives to all relevant trading partners. They also provide a safe and compliant repository for contracts, allowing effective contract management while keeping the auditors happy since rebates can finally be tracked efficiently, down to the last cent.

You shouldn’t have to spend time on transactional activities

Average performers do the doing. Winners find the edge that sneaks them ahead of their competition. Then they focus on tweaking what matters. The same Deloitte survey found that while most CPOs spend 74% of their time on transactional and operational activities, high performers spend approximately 63% (~15% less) of their time on these activities.

Since nine out of ten spreadsheets contain errors and disconnected systems require enormous data-wrangling to turn information into actionable insights, it’s simply not worth the time and effort to trawl through spreadsheets. And since you can’t expect inadequately equipped ERP to handle multiple complex deals, only to have to integrate critical reporting yourself to find the answers you’re looking for, there must be a better way to turn supply chain chaos into revenue.  

Are you ready to make your business a high performer? If so, it might be time to let rebate management software reduce complexity, improve traceability, iron out the kinks in trading partner relationships, and form the foundation of a platform for growth.

Let us know once you’re ready to find out more – or try Enable’s rebate management software for free.

Elizabeth Lavelle
Supply Chain

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