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SPA Control A systematic process to manage the SPA process JIGSAW SYSTEMS INC.

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Presentation on theme: "SPA Control A systematic process to manage the SPA process JIGSAW SYSTEMS INC."— Presentation transcript:

1 SPA Control A systematic process to manage the SPA process JIGSAW SYSTEMS INC.

2 Solve many of the problems inherent in today’s SPA contract process: What can this system do? Increase sales on SPA contract customers Increase profitability of SPA contracts Eliminate discrepancies in SPA claim process Drive accountability for SPA performance Audit claims as they are submitted Simplify contract creation/modification process

3 Results for roll out with first Manufacturer client: What has this system done? Increase sales with SPA contract customers by 40% Increase profitability of SPA contracts by 10% Eliminate discrepancies in SPA claim process by 85% Drive accountability for SPA performance – sales per contract up 45% Audit claims as they are submitted – claim process time reduced by 85% Simplify contract creation/modification process – approval time reduced by 60% SPA Control proven to improve all aspects of the process for manufacturers and distributors

4 The situation Thousands of unique contracts to manage Challenging financial management process Focus has been on distributor getting their rebate quickly – distributor driven Limited visibility and accountability for performance Special Pricing Agreements are a key driver of your business. But there’s a problem…

5 SPA’s may be the most costly and least managed part of your business Lost revenues, lost profits, costly administration, costly acquisition Everyone has their own individual contract setup process Claims have to be audited after they’re submitted Incorrect data causes continual conflicts and requires time to resolve Customer and sales people not held accountable to expected performance Price mismanaged in the marketplace

6 Acquisition and Renegotiation – Standard Process Administration – Management Control Real Time Reporting – Performance Management The industry knows there is problem (but not the answer) No-one is happy with the current SPA process, or believes it is working as it should Contract Acquisition & Management Rebate Claim & Audit Process SPA Measurement & Accountability There needs to be focus on three areas :

7 How do you create an environment that facilitates a Acquisition and Renegotiation – Contract Visibility Set shared mutual commitments to the SPA business opportunity  Manufacturer, distributor, customer Document the contract history: customer buying expectations, sales force agreements, distributor involvement Infrastructure of transparency, efficiency, accountability and performance Avoid errors that result from changes in: product lines, list prices, contract multipliers, selling authorization, customer buying changes Fact based negotiations Customer commitments Sales Force intelligence & accountability Marketing opportunities Visibility/Accurate & timely data Contract Management Infrastructure

8 Store the history and status of the contract under an easily accessed infrastructure What can change with a better process? Contract history and customer details captured Version control on lines and skus within contract Track key role players at manufacturer, distributor, customer Track documents, comments and internal discussions Facilitate continual contact updates, not once-a-year renewals Require the information you need for your business

9 Effectively manage your SPA contracts and respond to changing market conditions. Instantaneously. Exposure to results will improve SPA utilization Real time reports on SPA activity View contract buying levels by product group, by month and by part number Evaluate pricing compared to market recommendations and base cost Access contract utilization to understand customer actual buying patterns Adjust price levels to better match actual buying results

10 Access a best-in-class suite of contract performance reports to better respond to your SPA business activity What can change with a better process? Data updated nightly based on SPA rebate claims Internal analysis tools to evaluate contract profitability Understand contract utilization to identify product gaps in customer buying process Get early warning indicators on contracts that are going in the wrong direction Improve engagement with sales and marketing teams to increase revenues Manage price to meet market strategies Easily link to current CRM platforms

11 The rebate claim process is a source of frustration 2. Rebate Claim Administration – Management Control Without full EDI claims from manufacturers are difficult With EDI no exposure to claim calculation process Manual claims are an administratively demanding sunk cost How can we have one industry solution to ensure claims are accurate?

12 Like a purchase from Amazon, validate before processing What changes with the new process Process checks for: Validity of claim Multipliers at time of sale Matches to purchase history Includes zone transfer items Audit trail for every single line Provide visibility to the claim process Allow for disputes in controlled, documented manner

13 LEAN principles drive better execution and performance LEAN the process Create standard work for all stakeholders in the process  Claim approval process  SPA initiation and renewal process Visual management in a private shared environment  Review the sale performance of SPA contracts Root cause analysis and corrective action  Real time performance information  Real time validation of claims

14 Results can come from all aspects of the SPA Process What could the estimated Return on Investment be? Reduce administration and processing costs Reduce financial losses due to rebate miscalculations Eliminate the confusion with SPA contracts and rebates Increase sales to existing SPA contracts thru performance management Expand sales to other complimentary product lines Improve SPA profitability and manage price strategy Engage SPA customers in planning, forecasting, marketing and incentives Reduce Costs Improve Profitability Increase Revenues


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