Case Study: Rebate Tracking and Validation Problem

Problem:

A manufacturer came to us for help to systematize and improve their rebating system. This manufacturer sells their products to distributors and the distributors do the final selling to end customers. To help the distributor to be more competitive the manufacturer gives the distributor a contract with an agreement to rebate the sales on specific products or to specific deals to customers. This helps the distributor sell the items at a lower price without losing margin. To do this the distributor buys the items at normal price and later submits a rebate request on any sales that qualify for the agreement. The manufacturer extended these agreements to multiple distributors and each distributor sends different rebate requests through different means (some by email, some automatically through EDI, and some via web portals). When the number of agreements and distributors was small it only took a small team to manage and validate the rebate requests. As the quantity of sales, products, agreements, and distributors has increased there was a great need to automate as much as possible as the team was not able to check if there were any mistakes or invalid requests. Some distributors were known to mishandle information causing incorrect rebate requests.

Problem Summary:

• Growing number of rebate requests coming in per month

• Growing number of distributors and contract agreements

• Submitted data was inconsistently formatted and came from multiple sources

• Team was no longer able to validate all the incoming requests

Solution:

We created a custom solution that first manages the contract agreements. The app collects the distributor information, agreed upon rebate pricing, and allows management of contract agreement’s expiration/renewals and price changes. Then we built out multiple import routines to feed all the submitted rebate data into a common central queue. The process then matches the distributor rebate requests to the contract agreements and double checks that the rebate requests match the contract. If there are no issues then the rebate request is accepted automatically. For the rebate requests that do not pass the automated validation checks the team is able to diagnose and work through them. The team can generate reports back to the distributor to get them resolved.

Solution Summary:

• App allows contract agreements to be managed

• Process to import distributor rebate requests into a common central queue

• Process to automatically validate the rebate requests against the contract agreements

• App helps the team manage exceptions

Accomplishments:

Now the manufacturer is able to import hundreds of rebate claim files each month and only has to manage the problems instead of having to work each file from start to finish. The manufacturer gained significant productivity gains and was able to save thousands of dollars from working out incorrect requests. This also improved the manufacturers turn around time on paying out on rebate requests and significantly improved accuracy.

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