BICKFORD’S GROUP

The Challenge:

MANAGING A DIVERSE DISTRIBUTION NETWORK AND NUMEROUS PROMOTION ACTIVITIES REQUIRES A ROBUST SOLUTION

Bickford’s sells through a complex distribution network, selling directly to major retailers, and smaller independent retailers, as well as third-party distribution companies. Pricing, trade discounts, rebates, and promotions are all an important part of the business. Eighty percent of customers and 90 percent of products have promotional activity associated with them.

“In our marketing efforts at Bickford’s, we are managing a diverse set of distribution streams. The major one here in Australia is the retail market. We are working with the large retail chains and some smaller independent ones as well,” explains Greg Brown, Bickford’s Information Systems Manager.

“We also have our route or multi-channel business. This is more along the lines of cafes, restaurants, hotels and smaller independent retail shops. This is a more direct relationship. We then have a number of distributors who sell on our behalf . So we are talking many differing processes, which have a high level of complexity. This is why we need to automate through a trade spend management tool.”

At any given time, Bickford’s Australia may have more than 1,500 open promotions covering more than 12,000 items and item groups. In one recent month, the company processed over 24,000 claims, which resulted in around 500 accrual entries in the general ledger and more than 5,000 earned discounts against future invoices.

Promotion types include: 

• allocated funds or lump-sum payments

• deferred discount promotions

• immediate off-invoice discounts

• scan back deals

• rebates and more

Promotions are one of the company’s larger expenses after cost of goods sold and salaries and wages. Ensuring promotional charges hit the right general ledger accounts for the product and channel is so important. With more than 10,000 potential combinations of accounts and sub-accounts it is also a huge undertaking.

“A large part of our cost comes through these promotions and rebates so we really needed a solution to monitor, control and maximize what we get out of them. We also needed something that would help automate the process because it is such a large part of our revenue. We really want to get the best bang for our buck, so to speak,” explains Brown.

Bickford’s has been a QAD ERP customer for many years and was previously using an outdated Trade Promotions module, but recently expressed interest in upgrading to a newer release to take advantage of enhanced capabilities and newer technology. However, the new trade promotions solution, QAD Trade Activity Management (TAM)*, was still in the early adopter stage of development.

The Solution:

QAD TRADE ACTIVITY MANAGEMENT (TAM)*

Following a review of other trade promotion management solutions, Bickford’s joined QAD’s Early Adopter program for TAM. The key driver for selecting QAD TAM was the complexity inherent in the other solutions available in the market. In addition, none of the other packages came integrated with QAD ERP like QAD TAM, so Bickford’s would have faced extra expense and the complication of maintaining an interface between disparate solutions. 

“That integration makes things so much smoother for us. We have no worries about ongoing maintenance of custom integration programs,” explained Brown. “And our primary objective was to replace and improve on what we had in place with the older trade management solution. We also wanted to expand the system to incorporate our Vok business, which was still recording promotion data manually, and standardize the process across the companies.”

In the end, the advantage of that integration and the direct line of communication with QAD R&D as an existing customer, meant that Bickford’s would not only have the latest capabilities in the solution, but would have input into the functionality that would further enhance it. This was a great benefit of participating in the early adopter program.

Even without the need to integrate a third-party solution, this was a large and complex project for Bickford’s. In order to realize the benefits, they needed to simultaneously upgrade from their existing outdated ERP system to the current version and implement QAD TAM. Bickford’s moved forward with the project because they felt the benefits were worth it. 

“I would do the whole project again. QAD TAM is the best solution for our group of companies. It delivers what we need,” states Brown. “And the best part is that it is integrated with QAD. It makes things so much smoother.”

The Benefits:

QAD TAM HANDLES A COMPLEX DISTRIBUTION PROCESS WITH EASE AND PROVIDES IMPROVED VISIBILITY

QAD TAM helps manufacturers and distributors effectively plan, manage and track trade promotion activities, providing visibility into promotional spending. It improves manufacturer’s promotions, customer service and fulfillment performance metrics.

For Bickford’s, one unexpected but valuable benefit of moving to QAD TAM has been the ease of analyzing promotion statistics. Bickford’s was easily able to provide detailed reports on the number and types of promotions when asked, something they couldn’t do with the old system. 

“It’s quite a complex process when sales orders, invoices or expenses are entered and need to match to the correct sub-account or cost center. We can easily have tens of thousands of combinations...setting that up can be a nightmare with all the different price lists. When using standard QAD pricing, multiple price lists are needed to direct discount to correct sub-accounts and cost centers. But with QAD TAM, we can set up just one pricelist and it’s smart enough to know which sub-account and which cost center it needs to be in,” highlights Brown.

In addition, the company now has more insight into actual product profitability, even down to specific customer and product combinations.

Because Bickford’s worked directly with QAD R&D as part of the early adopter program, they were able to influence the scope and schedule of the product’s development, so they had rapid access to the capabilities they needed most, and they were able to add certain functions to the development schedule so that QAD TAM would more closely align with their requirements in its first release. 

Manufacturers looking to implement QAD TAM can expect to see the following benefits:

• Improvements in pricing accuracy despite complex contract and price list hierarchies.

• Improved rebate and chargeback management, eliminating fraudulent charges. QAD TAM allows manufacturers to manage and validate pricing, rebates and claims and reduce the number of invalid claims and repayments on unearned cash discounts.

• Decreased exposure to outstanding claims. It records the true exposure to outstanding claims through correct accounting and optional accruals and reduces invalid claims.

• Decreased invoice days outstanding. QAD TAM automates trade settlement and careful claim validation, cuts trade settlement lead-time, improves efficiency and reduces disputes that can hold up payment.

• Improved Delivery In Full On Time (DIFOT). With QAD TAM, efficient order handling improves customer service and reduces order to delivery lead time. Better communication of promotional programs helps avoid stockouts by balancing demand and supply to ensure inventory availability.

• Increased promotion ROI. It maintains and monitors promotional budgets providing management the visibility needed to develop and duplicate the most successful and profitable programs to drive revenue and margin.

• Decreased risk by reducing fraudulent charges, meeting financial regulatory requirements and automatically handling tax management.

*QAD Trade Activity Management (TAM) is today incorporated as standard capability in QAD Adaptive ERP.