The supply chain is a complex beast – especially as organisations around the world are now looking to global supply chains in order to source materials more cost-effectively. Many challenges emerge with such strategies, including how to align incentives such as rebates to the benefit of the whole supply chain.
Make no mistake about it – alignment is important. The fact of the matter is that all members of a supply chain are interlinked.
If all companies work together to deliver quality products to the end customer, everybody wins. On the other hand, if they don’t work together efficiently, then all companies will lose out to another supply chain.
To use a simple two-stage supply chain example, a manufacturer relies on a retail partner to sell the goods it produces. Of course, the retailer’s salespeople greatly influence customer decisions on the shop floor – and the retailer of course, stocks rival products in the same category.
If the manufacturer doesn’t offer the retailer attractive margins on its products, the retailer will push rival products that do. However, when alignment and collaboration is lacking between the two companies – that is, when the manufacturer has no insight into what efforts the retailer expends to promote the manufacturer’s products – the manufacturer struggles to create incentives that will influence the retailer to do what’s best for both companies. These are known as “hidden actions” – and they permeate across the entire supply chain.
Rebates and the Supply Chain
Rebates are used to drive the sale of specific products, providing B2B supply chain partners with incentives that encourage them to purchase more. In our example above, with the right insights, alignment and willingness to collaborate, the manufacturer could have created an attractive rebate programme that incentivised the retailer to sell more of its products, helping both companies achieve greater profitability.
However, supply chains – particularly global supply chains – have many more participants than just the two, making meaningful collaboration between all players even more important. The challenge, of course, is to get all companies aligned so that everybody benefits. This is especially important during times of supply chain disruption..
Rebate programmes are a great way to motivate collaboration throughout the supply chain, which can result in improved business performance for all participants, greater market share, increased revenue and better relationships between supply chain partners. Good alignment and collaboration can also optimise the performance of the whole supply chain, providing the competitive edge that will ultimately benefit all trading partners in the chain, helping them succeed and grow.
Optimise Supply Chain Collaboration and Visibility with e-bate – the Ultimate Rebate Management Solution
While rebate programmes have many proven benefits across all sectors – including pharmaceuticals, automotive, construction and FMCG – they can be extremely complex to manage, particularly when dealing with multiple agreements with multiple partners in a supply chain. This can lead to price erosion and reduced margin if not organised, tracked and monitored correctly.
This is precisely why deploying robust and reliable rebate management software is crucial so you can keep a firm handle on all the figures, while at the same time facilitate greater transparency and collaboration between your trading partners and yourself.
With e-bate, all contracts, agreements, data and rebate calculations are centralised in the cloud, providing a single source of truth that anyone with the right permissions can access at any time, thus providing the much-needed transparency that all good collaborative efforts are built upon. In addition, e-bate’s sophisticated rebate management solution comes with robust deal-modelling features, allowing you to model different rebate scenarios that can help improve efficiency and forecasting.
The software allows you to undertake “what if” analyses on individual agreements to understand the impact of changing an underlying rebate condition, such as an increase in rate or change of supplier – which may be necessary in these times of disruption.
What’s more, our real-time calculation engine quickly and accurately calculates all prices and discounts that have been agreed upon with all partners and even recalculates the impact when things change.
Only by having access to the right data at the right time can you contract, transact, reconcile and analyse in real-time, enabling you to improve your processes when dealing with complex business rules and calculations. e-bate gives you the ability to securely share your deals with your trading partners, helping you work together to strengthen relationships and the whole functionality, competitiveness and profitability of the supply chain.
e-bate is your single source of all rebate information, providing you with the insights you need to make proactive decisions that drive business value. Our solution covers the whole supply chain from manufacturing and distribution through to wholesale and retail.