SPA ControlA systematic process to manage the SPA process

JIGSAW SYSTEMS INC.

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

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

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…

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

• 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:

How do you create an environment that facilitates a

Acquisition and Renegotiation – Contract Visibility

• Set shared mutual commitments to the SPA business opportunityManufacturer, 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

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

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

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

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?

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

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

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