Wholesale distributors are facing a wide range of global supply chain disruptions — ongoing shortages, longer lead times, higher logistics costs and more — forcing many businesses to seek new avenues to drive revenue.
Supplier rebate programs have traditionally been a key margin enhancement for wholesale distributors. However, since these programs in wholesale distribution are often highly complex, manual and time-intensive, distributors consistently struggle to maximize their profitability.
Additionally, many distributors’ legacy IT systems are homegrown and outdated, and most of them don’t use automation across billing, order fulfillment and warehousing functions — adding inefficiency to their internal processes. Meanwhile, wholesale distributors are juggling multiple processes tied to planning to ensure the right inventory is at the right location at the right time.
Given these challenges, wholesale distributors need technology and best practices that can help transform their supplier rebate programs. Here are a few key steps toward achieving those goals:
Digitize the supplier rebate lifecycle. Since supplier rebate programs are traditionally highly complex, manual and time consuming, wholesale distributors need greater visibility into their supplier rebate programs to help them better track and absorb the funds owed in a more collaborative manner. By leveraging cloud-based supply chain and ERP technologies to improve program visibility, distributors gain the critical ability to manage the entire supplier rebate lifecycle — from contract and program management to tracking and performance analysis.
Automate foundational processes. Amidst ongoing global supply chain disruptions, wholesale distributors are facing monumental challenges to maintain the right level of supply with the right inventory in the right warehouse location — and it’s quite the complex balancing act. By automating foundational processes and functions such as replenishment planning, order fulfillment, backlog management and supplier rebate management, distributors can proactively fulfill the highest-revenue orders for their most critical customers and channels. This helps wholesale distributors predict consumption and plan restocking more accurately. In addition, by connecting these automated functions to their financial systems, distributors can increase productivity, improve order-to-cash cycle time and reduce operational errors. As a result, distributors can enhance operational efficiency and boost profitability.
Wholesalers are increasingly aiming to generate new revenue streams by introducing private-label products, subscription-based services and omnichannel fulfillment. Through the integration of business functions across the organization, these companies can enhance their order-to-cash processes to improve revenue management and customer satisfaction.
Automating supplier rebate management helps distributors gain an invaluable double benefit, as it enables them to optimize their trade programs and boost profit margins while upskilling their workforces. As a result, wholesalers are able to navigate their supply chain challenges to maximize profitability, optimize workforce management and ultimately gain a competitive advantage.
Derek Gittoes is vice president of supply chain management product strategy at Oracle.
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