Business Need

Multi-billion dollar, global manufacturing company frequently offers special pricing to distributors of its products in the form of bill-backs and discounted pricing below a distributor’s into stock pricing. The company also offers trade discounts to distributors to promote the sale of its products. The company’s management team was concerned that their existing processes and tools for managing the discount programs and reconciling and adjudicating the claims may result in processing invalid discounts, inability to accurately measure the performance and impact of discount programs, inability to accurately measure financial liabilities and inability to accurately adjudicate claims.

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Services Provided

The Core Catalyst team evaluated and assessed the company’s rebate and deduction programs through interviews, data analysis, process reviews, and analyzing situations so that we were able to further evaluate the potential areas for improvement. Specific tasks included:

• Calculated base line current run rates
• Reviewed terms and conditions related to pricing from a sample of representative client contracts
• Gathered necessary data for sales and current discount programs
• Pulled related invoices and associated payments and compared to expected results
• Reviewed current processes and tools used in program administration
• Extrapolated issues uncovered to the entire population
• Developed high level recommendations for next steps based on the initial analysis

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Value Provided

Core Catalysts developed a detailed list of issues and recommendations for the company’s rebate and discount programs. It was estimated that the potential annual savings that the company achieved by resolving issues and implementing recommendations was more than $1 million per year.

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