Information Technology

One Size Does Not Fit All

Answers Systems — Tue, 09 Mar 2010 14:25:33 GMT

by John Nicholas

The Foodservice Industry is changing. Foodservice has evolved to a $600 billion industry. Along with growth comes “growing pains”. Manufacturer’s trade promotion spending now totals more than $70 billion annually. Where foodservice trade spend was just a black hole that companies tried not to think too hard about; the elephant in the room has grown to extent that it can no longer be ignored. There is a new awareness of the need for more accountabilities, and greater transparency in not only where the money is going, but what is the bang for the buck? Up to this point, many companies have tried to manage trade promotion spending with solutions that are geared toward retail/grocery. It does not work! I hear time and time again from companies how they want a solution to manage both the retail and foodservice sides of their business. That solution does not exist! There is no one size fits all solution! The food service industry is unique in its culture, vocabulary and processes. As a result, companies employing retail oriented solutions struggle to manage trade spending dollars and track operator performance in the foodservice vertical. Processes lack data integrity. Contract information is stored in multiple files at various locations. There is no transparency into the business. Many companies have very little idea of what is being sold where, let alone have a way to measure the effectiveness of their trade promotion spending. Answers Systems Can Help! We have developed a system that is completely devoted and dedicated to managing the foodservice side of trade promotion spending.

Our full-cycle contract management center provides a powerful tool for creating, managing and analyzing your distributor and operator deals. Additionally, our software can help you with the reconciliation and settlement of customer claims.

Collection of sales/billback data (from almost 2000 distributors and operators with approximately 70% of the data being electronic)
Management of contracts (capture terms, approval process, monitor compliance & performance)
Claim reconciliation and settlement (verifies and reconciles, and settles terms of agreement against the claim)
Our push button rebill process, (for ineligible deductions), is successfully collecting up to 80% of everything rebilled.

Analytics and reporting

What accounts are in compliance with your agreements
What accounts are underperforming
Profitability of an account
How geographies, customer groups or sales people are performing
What sales impact any marketing activity has on your business

Give us a call. We would love to take a deeper dive and show you the significant hard dollar ROI that could add to your bottomline!

Answers Systems Releases the ContractPro® v4.2 Application

Answers Systems — Mon, 08 Mar 2010 16:23:09 GMT

Release offers enhanced security options, time-saving features, and powerful analytical tools for foodservice manufacturers

Answers Systems, the leading provider of foodservice trade promotion management solutions, deployed the ContractPro® version 4.2 release this month. The version 4.2 release provides features aimed at enhancing security of client instances of the ContractPro portal, increasing user productivity, and providing access to robust new analytical reports in the new ContractPro 3D reports module.

Enhanced Security Feature
Password reset and strength policy at the client level: because each client may have varying standards of password strength and reset frequency, the ContractPro version 4.2 release rolls out new, client-managed password security policy management. Broker users who represent more than one ContractPro customer will still be able to use the ContractPro User central sign-on, and their password set up rule will default to the client's policy that has the most rigorous standard.

Increased Productivity Features
The majority of features in the ContractPro version 4.2 release will represent major time-savings and productivity increases for clients. Among this feature set are:

Auto load estimated volume from actuals: volume for renewed contracts will be auto-populated in the new contract version based on historical purchase activity from a previous version. Users can use the historical purchase volume as the estimate or adjust them based on growth or other factors that may impact the customer's purchase behavior.
Spreadsheet pricing: the ContractPro spreadsheet pricing feature allows users to leverage the power and familiarity of products such as the Microsoft® Excel® spreadsheet application to price contracts in either online or off-line mode.
Additional time-saving features include new Workflow Rules Engine and various enhanced search capabilities.

New Contract Reporting Capabilities
The ContractPro v4.2 release also includes the launch of the ContractPro 3D reporting v1. ContractPro 3D reporting provides users with both static and dynamic reporting options to analyze trade promotion data in a more robust and efficient way than ever before. With this new version, Clients will be able to designate "super users" who can create and deploy custom reporting across their organization.

"We continue to provide the most mature workflow solutions available in Foodservice TPM and we've established ourselves as a dominant leader in that space. Now, the release of ContractPro 3D Reporting capabilities marks a pivotal step in Answers Systems evolution where we expose the full potential of the information produced by these systems," said Shawn Cady, Vice President of Marketing at Answers Systems.

Since 1986, Answers Systems has been meeting the unique trade promotion management needs of the Foodservice industry. The company stays on the leading edge of software development and service delivery with the ContractPro® solution for Foodservice manufacturers and the ValuTrak® solution for multi-unit Foodservice operators. Answers Systems solutions provide real-time visibility into the performance of trading partner agreements and support quantifiable ROI improvements for its client base.

"Synergy" is a Math Term - Who Knew!

Answers Systems — Tue, 02 Feb 2010 14:29:16 GMT

by Greg Hilton

Throughout recent history the Foodservice and Trade Spend Management industry, as well as much of corporate America, has used really cool big words to describe trends and philosophies.

From the early eighties, we had Total Quality Management (TQM), a management theory for defect reduction and heightened quality standards. Sun Tzu (that is him on the right), an ancient Chinese military general penned, “The Art of war” and a whole industry of management theorist began translating the logic of modern war fare to management practice. Big words, big theories, big statue!

Synergy and other words I did not know.

For years, I have heard the word “Synergy used to describe when two parties come together, and find common principles and practices that, if partnered in the right way will aid both parties. So, you are sitting around the manufacturer or operator company boardroom table talking about a partnership with someone and you say, ”Let’s see if we can find the synergies between our two companies.” This means, can we work together and get a better result from our partnership than the results we could get alone?

Math, the final frontier!

1 + 1 = 3

While sometimes mathematically challenged, this one seems pretty straight forward. Can the combination of two parties working together yield a better return than the two companies could working apart? When it comes to providing a solution to our customers foodservice challenges (Deduction management, data acquisition, great contract approval processes, business intelligence, etc.) taking all of the parts that our customers need and building solutions that address each piece is what sets us apart from our competition. Basically, we take every piece of the manufacturer and operator’s need and deliver it in one solution. Or, 1+1+1+1+1 = Way more than 5!

Synergy and the Foodservice industry

We understood early on in the creation of the ContractPro® and ValuTrak® solutions, manufacturer and operator foodservice solutions, that the trade spend foodservice needs could only be fully met by a solution that sought to deliver all of the pieces together. For instance, a manufacturer could not look for a data acquisition partner, then seek out a software vendor, then figure out how to staff to verify claims, then implement a Business Intelligence solution, then look for a distributor/operator portal vendor, etc.

The combination of products and services that we offer to foodservice operators and manufacturers sum to offer a much greater value than the individual products and services that competitors in the market offer. At Answers, we believe it is our mission in life to deliver a single, cohesive and ready-to-use solution to the foodservice industry.
We deliver our value through great software and the most expert and educated people in the world driving great services. Thank you for helping to make Answers Systems The Premier Software and Services provider in the Foodservice Industry.
Want to embrace the issue, consider the solution and really improve your organization’s trade promotion management? Contact us. Answers Systems' ContractPro and ValuTrak solutions are software and outsourced services designed for the unique and specific needs of the foodservice industry.

Apple iPad - Game Changer for Contract Management

Answers Systems — Wed, 27 Jan 2010 18:06:39 GMT

by Shawn Cady & Stacy Jackson

If you monitor Twitter, Apple-related news, or technology gadgets in general, you probably know that the Apple tablet is being revealed - about right now, in fact (1:00 EST).

For years we’ve all tried to get the sales force to stop using the cocktail napkins as a preferred contract delivery method. Now with the advent of Apple’s revolutionary tablet computer, the game is changing for contract management. The new tablet (and future generations of tablets) will allows our apps to become a "digital cocktail napkin" - easy to carry but far more powerful than a flimsy piece of paper.

Why we think tablet is the beginning of a foodservice contract management revolution:

Availability/portability of hardware: iPhone and Android phones have started the revolution because of their "always connected/always on" nature and ease of portability. Business apps abound for these devices, yet there has not been a robust contract management solution yet. Sales reps could bring their laptop to customer meetings, to enter pricing and contractual data, but it can be cumbersome to lug it around. And, you have to wait for it to boot up, you wait for a file to open or wait for it to connect to wifi. Natural and spontaneous interactions between customers and sales people get interrupted with a laptop - social momentum gets lost. The new Apple tablet probably won’t instantly change this, but will make it easier and more natural to include the equivalent of the electronic piece of paper in contract negotiation.
Network: better access to 3G networks is already and most places have wifi. With the advent of the tablet, more network providers and businesses will be clamoring to serve the masses who will be using these tablets now and into the future.

Here at Answers Systems we have been anticipating this evolution in mobile computing, and we have been waiting for hardware and network technology to catch up to our vision for always-on contract management. The sales process in is often a loose negotiation setting that doesn’t necessarily involve a laptop where the sales person and customer to agree to purchase and rebate terms together. With the new tablet and/or future generations of tablets, this will be more of “natural fit” into the sales interaction. If like Apple's iPhone/Touch, it will be “always on/connected” users can keep the momentum going during a sales call. Users will be able interact directly with the computer by touch screen and stylus or direct touch – much more like paper and pen. There will be less interruption to the social interaction – no waiting for the laptop to turn on, one can potentially physically signing the screen (electronic version of the contract) as you would a piece of paper – no waiting for the printer. A tablet would be much easier to pass back and forth for users to discuss and edit.

Manufacturers and service providers like Answers Systems have to acknowledge the impact that this technology and future iterations have on the sales process and communication of contract data. With evolution of sensory computing platforms, GPS, and accelerators (spatial orientation and movement), there are many imaginative and useful applications to trade promotion and contract management.

One example: Imagine if you are driving down Main Street, USA, and your tablet (or even your smartphone) alerts you that equipment velocity is 50% under where it should be for the large local leverage operator you are just three miles from? Just follow your GPS turn-by-turn instructions, go educate the customer on how to use your products more effectively with your equpiment program, and increase sales.

After we see what Apple presents today at their press conference, we will definitely be back with more thoughts. Stay tuned.

Technorati tags: Apple Tablet, foodservice, contract-management, trade-promotion-management, GPS, ContractPro, ValuTrak TTPCAV2BGRGU

Where have all the recycling bins gone? Collaboration on Trade Promotion for Going Green

Answers Systems — Mon, 14 Dec 2009 19:06:41 GMT

Posted by Janet Zlokovich

As we wrap up the 2009 year, I want to leave you one thought as you have discussions with your supply chain partners on trade promotion . . . .

Collaboration on data exchange should be a key factor when you establish the core objectives for your trade program model. A requirement of the model must include the submission of electronic billback reporting to the manufacturer for claim settlement. It is simply the only way vendor partners will have the proper insight into their business so they can better meet the needs of their customers, distributors and operators.

Answers Systems Eclaim^SMhas been our technology solution in production since 2006. All our clients benefit from this service. The ongoing advancements to enhance Eclaim capabilities for managing data continue with each new release. This month we introduced another new feature for loading electronic claim data. We also have dedicated IT resources staffed to retrieve and monitor the file transmissions, standardize the data load, and apply automation for a seamless flow into our ContractPro® solution for claim settlement and Athena^SM reporting.

Some manufacturers who are leading the foodservice industry with this initiative have already implemented this framework to target their company’s objectives. Others are beginning to ask me more questions to better understand how they can incorporate this component into their trade program negotiations. There are already foodservice industry standards in place by GS1 US for the preferred method of reporting billback transactions so the model doesn’t need to be invented, just implemented. I have worked with several distributors who needed guidance or have questions on this document. Others are looking for an interim solution for this format that will be an acceptable alternative.

Overall, I am seeing more companies becoming trading partners rather than partners in business to eliminate paper and drive waste from the supply chain. There can be a tremendous savings for all when the supply chain is synchronized and embraces collaboration to reduce costs.

Technorati tags: GS1 US, contract collaboration, supply chain synchronization, contract collaboration, trade promotion management, claim settlement

Contract Collaboration: Automation for Electronic Contract Supply Chain Efficiencies

Answers Systems — Wed, 11 Nov 2009 22:03:38 GMT

Posted by Janet Zlokovich

Trade Spend Management collaboration means calibrating terms for contract negotiations.

One of my “Best Practice” recommendations for foodservice is to Promote trading partner collaboration for maximizing efficiencies by improving the claim processing timeframe and driving waste from the supply chain by eliminating paper. The way to achieve this objective is with technology such as Answers Systems Eclaim^SM; calibration occurs when the claimant submits all billbacks in an electronic format. To learn more about what the industry is doing to support this initiative: Foodservice GS1 US Standards Initiatives

Every foodservice Manufacturer, Distributor and Operator wants to know they are a valuable asset to their trading partners. All parties need to be able to understand their business and make decisions on how to implement the most comprehensive terms for embracing and growing supply chain partnerships. Understandably, every company has their own strategies and core objectives but when the approving hierarchy is ready to sign off on the contract, they need to know they can achieve measurable ROI results.

Trade Spend for Distributor Earned Income, Deviated Pricing, Fixed Rate Allowances and Operator Headquarter Rebates are an effective way for manufacturers to incent their Distributor and Operator customers on purchase compliance. It opens the door for Manufacturers to have discussions with their customer and review expectations on their spend attainment and tracking volume milestones for new and future negotiations. An important consideration for these negotiations is to incorporate language to ensure the billback reporting is in an electronic format. It eliminates paper from the supply chain and allows Eclaim to automate the file load.

Distributors and Operators want to be able to sit down with their suppliers to understand the expectations for earning the incentive. Remember, not everything can be accomplished the first year. Begin with benchmarks that can be measured based on your current business while setting expectations to incent future milestones. This will lead the way toward new collaboration.

ContractPro® is the Trade Spend technology used by Answers Systems clients who choose claim settlement and reconciliation as a service – it is an important tool and provides visibility for the entire supply chain. Claim settlement and reconciliation is most effective when the billback reimbursement request is provided in an electronic format and provides all the required supporting information down to the unit level. This will yield the maximum benefit for everyone because there is visibility to the entire supply chain business.

When I think about the basics for trade spend contract management negotiations, I apply some valuable knowledge I received years ago during management training about how to develop SMART goals. It sounds easy and makes sense but it takes considerable time to be realistic and know you will be able to execute the terms of the contract. The reality is if you don’t negotiate correctly prior to signing the contract, you might not be able to make the Contractee accountable to your terms. Always be sure to validate that it is truly electronic reporting according to the specifications below. For example a PDF sent via email is not valid for electronic reporting.

Specifications for Electronic Reporting:

I. File Type

A flat file is the minimum requirement for sending reporting in an electronic format. This would include 1 header row for column labels.

a) EDI 867-Billback

b) Text file formats (delimited-character)

c) Excel

II. File Content

a) Detailed sales transaction records for every invoice

b) Location level summary that qualifies for a pricing, allowance, or rebate incentive

III. File Transmission Delivery

a) File Transfer Protocol (FTP) used to exchange files

b) Email

Here are some tips on how you can apply SMART goal criteria:

Specific: Goals must be clear and unambiguous.

All billback claims should be submitted in an electronic format – the standard method for Billback claim settlement.

Measurable: You need to be able to measure your goal.

Include specific language that outlines the terms and conditions to qualify.

Don’t negotiate terms that cannot be executed and measured. Make sure your Trade Spend technology solution such as ContractPro can accommodate the terms you negotiate with your trading partner.

Attainable: Implement tier components for your distributor Earned Income and Operator Headquarter contracts. Allow multiple qualifying components for eligibility but remember to validate that the Contractee’s compliance to a certain tier before entering the contract into your Trade Spend software.

Relevant: Apply enough flexibility to the goal in case your Distributor or Operator has system limitations. This will give distributors and operators that require technology improvements the motivation to enhance their current capabilities while rewarding those that have already made the investment to support supply chain efficiencies.

Time-bound: There is no time like the present. Electronic reporting must be in place before agreeing to the terms of a contract. Answers Systems clients will use ContractPro.

Everyone Can't Afford to be the New York Yankees

Answers Systems — Fri, 09 Oct 2009 20:46:28 GMT

Posted by Jennifer Grumbling

You are probably thinking what do the Yankees and trade promotion management have to do with each other? Well, you would be surprised.

Baseball can be a tricky business. In a nutshell, the success of the team depends strictly on the players and coaches and their talent and ability for the game. So, one would think that throwing huge contracts and salaries at big name talents to draw them to the team would increase the chances, or maybe even guarantee a chance, at winning the World Series. While the Yankees have the most World Series wins and have proven their franchise’s ability to be the top team, the 2008 season was definitely the exception. After throwing salaries topping nearly $400 million, including a 10-year $275 million contract for Alex Rodriguez, they were poised to be the team to beat. This was not the case; they ended the 2008 season in third place in the AL East, lost their chance at a playoff spot and so, did not make a World Series appearance. So as you can see, the Yankees did not get very much bang for their buck, given the ultimate goal for any franchise is to win the World Series.

Trade promotion Management can be a tricky business. In a nutshell, the success of TPM depends strictly on the organization’s ability to manage trade spending, accuracy of the data and SKUs and the system managing that information. So, one would think that throwing more money into their marketing efforts would reap notable benefits and increase revenue. This, much like the Yankees, is not the case. Throwing money and (unpredictable or inefficient) resources at something will not always make it better or more profitable. Think about it, managing WHERE you put your money will make it better and more profitable. Case in point, manufacturers often times don’t have a full grasp of how their trade spend budget is actually being spent and if it is even profitable for them. This is amazing especially since the whole point of trade spend is to increase revenue! How would a manufacturer know there are inefficiencies if there isn’t a process or system in place that houses the data, puts it into a readable, actionable format and allows the manufacturer to analyze their trade spend? If they did, it would empower the manufacturer to identify contracts that are not profitable, identify areas where contracts would be beneficial and be able to eliminate erroneous claims.

Instead of continually dropping money into increasing marketing efforts, investing in a trade promotion solution like Answers Systems ContractPro® solution would empower manufacturers to make sounds decisions about their trade budgets. Information is power; going with your gut (or bad/inaccurate data for that matter) isn’t going to provide a solid foundation for trade spend. So why not stop, take a look at what’s in place, integrate a trade promotion management solution, and reap the benefits of the money being invested in trade spend to its fullest potential. Now, if the Yankees only had a guaranteed system for ensuring success.

A great example of leveraging the data that a solution like ContractPro provides is the process of deducting. In the past one of our clients didn’t control their distributor’s ability to deduct from their invoices. Allowing distributors to deduct at will. With ContractPro in place and providing the necessary data, our client has put a stringent deduction policy in place. As a result deductions have decreased also resulting in a deduction in pendings.

Since 1986, Answers Systems has been meeting the unique trade promotion and compliance performance management needs of the foodservice industry. We stay on the leading edge of software development and service delivery with our ContractPro solution for foodservice manufacturers and ValuTrak® solution for multi-unit foodservice and hospitality operators. Visit www.answers-sys.com today for information or to request a free demonstration on how you can effectively manage your trade promotion.

Data Mapping Stats - Music to My Ears

Answers Systems — Tue, 06 Oct 2009 23:16:43 GMT

Posted by Stacy Jackson

Do you ever get songs stuck in your head? I do. Today’s song is “Surf City” by Jan & Dean. “Two girls for every boy” and “I’m going to Surf City where it’s two to one. Yeah, I’m going to Surf City. Gonna have some fun.” It’s kind of annoying, yet it got me to thinking about ratios. Surf City apparently had a 2:1 ratio of girls to boys. I started wondering what kind of ratios I might find in the quarterly report I received regarding our data mapping for our clients' trade promotion management and contract compliance management processes.

Answers Systems tracks quite a bit of contract and trade spend data. Consider the fact that we receive data from hundreds of distributors on tens of thousands of manufacturers (both food and non-food) and hundreds of thousands of unique manufacturer SKUs. For every single unique manufacturer SKU we track there is an average of 38 cross-references that must be made against the multitude of distributors’ SKUs for the exact same product. Each distributor we track could conceivably have a different SKU number linking back to manufacturer SKU 12345. If the average is 38 cross references, can you imagine what the high end of the spectrum must be?

Even with the advent of electronic data, human intervention is required to set up the initial cross references along with constant monitoring to ensure accuracy of mapping long term. And, we haven’t even talked about mapping those SKUs back to the correct contracts so that accurate payments are processed. Nor have we touched on mapping the contracts back to the right sales person, the right sales person to the right division – important stuff if you want certain types of reporting. It can get pretty complex.

“One SKU to 38 cross references” isn’t quite as melodic and catchy as “Two girls for every boy,” but we get pretty excited about this kind of thing around here. Every single line of data mapped means more accurate trade-spend settlement for our clients: that translates into increased SAVINGS and improved ROI, as well as receipt of near real-time, robust, actionable reporting for our ContractPro clients (trade promotion management for foodservice manufacturers) and ValuTrak clients (contract compliance management for foodservice operators).

Technorati tags: trade promotion management, foodservice, data mapping, trade spend, foodservice distributors, foodservice operators, foodservice manufacturers, reporting

Value Added Schmalue Added!

Answers Systems — Thu, 01 Oct 2009 22:50:50 GMT

Posted by Greg Hilton

Wikipedia says the term Value Add speaks to difference between the cost to produce a good or service and the sale price. My economics professor in college, “Professor Humdrum,” probably defined it in the same calculating boring and repetitious way (he was good about that). Nothing against monotony, it just seems to go on and on.

Years later in the real world, the term Value Add became less synonymous with economic theory and definition and more about a handy catch phrase that basically says, “Hey, I took this commodity and added something to it so you would choose my commodity over that other guys commodity.” Care to see this in a picture?


Value	Value Added

In the Foodservice world, manufacturers, operators and distributors are constantly looking to add value to their products: to set them apart through some kind of differentiation. Trade Promotion solutions providers are no different. No one wants to be just another potato. We want to be a potato head. Oh wait, that did not come out right.

What are the unique differences between Trade Promotion Solutions?

You basically have seven steps to accomplish when it comes to trade promotion. If you ever want to know more in-depth content related to these seven steps, I suggest you read my colleague Stacy Jackson’s blog on the Seven Critical Steps of trade promotion Management. It is really a great peek into the important steps.

The point in mentioning these steps is to illustrate how important it is to be able to carve each step apart and consider that each step is valuable, and the ability to string the pieces together and offer a cohesive solution for our customers, is truly the ultimate in value add.

Consider the total, or end up getting mashed

Mashed! Yip, I came up with that one all by myself. The ability for a trade promotion management company to be able to piece data acquisition together with contract management and then on to analytics, handling each piece in between, is the answer to taking a valuable piece (like acquiring data) and turning it into a value added solution that manufactures, operators and even distributors can understand.

Do not discount any trading partner

A really important factor to consider in trade promotion management is the vital role that each trading partner plays. As a manufacturer for instance, if you are put in charge of Marketing in Foodservice and you attempt to assemble your marketing strategy without a mind for how the operator and distributor will receive the message, you are writing yourself a short ticket to the unemployment line.

The same applies to trade promotion Management. Answers Systems prides itself in considering the needs of the operator the distributor and the manufacturer in the delivery of our products and services. ContractPro, our Manufacturer product and ValuTrak, our operator focused solution both have all three trading partners in mind and all offers benefits to each party. How is that for a value-add for our products and services?

In Summary. . . Keep your eyes peeled

You know how hard it is to come up with Potato Puns? Try it sometime.

So if you are looking for help in assembling your Foodservice trade promotion Management, start with a call to Answers Systems. We will help you look at your seven critical steps, build a plan for improvement and get your team moving toward operational excellence. Let us help clarify the difference between “solutions” in the marketplace that offer some valuable pieces of the trade promotion puzzle and value added answers that rounds out the loop.

Want to embrace the issue, consider the solution and really improve your organization’s trade promotion management? Contact us. Answers Systems' ContractPro and ValuTrak solutions are software and outsourced services designed for the unique and specific needs of the foodservice industry.

Price Waterfall Analytics In Foodservice Trade Channels

Answers Systems — Wed, 30 Sep 2009 17:57:34 GMT

Posted by Tom Tipps

Price “waterfalling” seems a fairly simple process that deals with the tracking of various revenue reductions/deductions as a product travels through distribution to its ultimate destination… the end-user.

The waterfalling process supports the identification of cost-cutting/margin enhancement opportunities…typically in a company’s go-to-market model.

This type of analysis is a challenge for foodservice manufacturers since they generally lose visibility to critical transaction data once the product leaves their dock. The manufacturer has many layered agreements with trading partners, and the lack of accurate and timely information makes it very difficult to track product through the maze of deals.

More about the maze….Manufacturers offer various trade incentives to their Distributors – intended to provide sales growth with the distributor’s local/”Street” operators. These incentives include earned income, growth accruals and marketing funds. We might refer to these incentives as “push” deals. To further complicate things, this Manufacturer also offers occasional off-invoice incentives to the Distributor on certain products sold to the distributor

These same Manufacturers also have direct contracts with large chain operators, schools, etc. These contracts involve a variety of incentives offered to chain headquarters and to the store locations aligned to each contracted operator. These can be called “pull” deals.

To begin the analytics process, we take all cases shipped to a Distributor and sort them into high-level categories based on the distributor’s sales transactions; e.g., Street and Chain.

Diagram 1 – The Sorting Process

In Diagram 1, the Manufacturer has shipped 10,000 cases to the Distributor, delivered at $35/case. The distributor has shipped 6,000 to the manufacturer’s contracted chain accounts, and 4, 000 cases went to the Distributor’s “Street” accounts.

We can identify case quantity shipped to Chain Operators since the distributor provides transaction data back to the manufacturer on the price incentives offered under the Chain contracts. We use a default calculation to determine the number of cases shipped to “Street” accounts (i.e., 10,000 cases shipped to the distributor – 6000 cases shipped to Chain accounts = 4000 “Street” cases.)

We also know the total incentives paid to the Distributor and to the Contract chain operators, bases on the incentives paid under Distributor and Chain Operator programs. In other words, each case is ultimately tagged with the appropriate incentive payments.

Diagram 2 – The “Street” Waterfall
($ per case)

The programs included in the Diagram 2 waterfall are relevant just to the “street” business. Since this Manufacturer paid off-invoice and earned income on all cases, those allowances were tagged to the 4000 cases shipped to the “street” operators. The marketing allowance was based on a $.25/case MDF fund.

Diagram 3 – The Chain Contract Waterfall
($ per case)

In Diagram 3 we waterfall all program costs relevant to the Manufacturer’s contracted accounts. Again, since the Manufacturer allowed off-invoice and earned income on all cases, those payments are reflected here, as well as on the cases shipped to the Street accounts. Also note the Headquarter rebates, Growth accruals, Marketing payments paid under the various Contracted Chain agreements. Note, too, the Duplicate payments associated with operators claiming under multiple agreements.

Diagram 4 – Waterfall of a GPO Contract

Diagram 4 shows the waterfall of a GPO contract. Each operator contract within the Contract category can be analyzed using all relevant costs associated with each individual contract.

Answers Systems has the systems and processes to support the waterfall analytics discussed above. We have the data synchronization systems that map over 15 million distributor sku’s to 500,000 manufacturer sku’s; we map hundreds of thousands of operator numbers to distributor and manufacturer operator ID’s. We receive data feeds from every distributor and most foodservice operators operating in North America.

Heretofore, this type of analysis was very difficult since the data was very old and highly suspect in terms of accuracy.

Within Answers Systems’ ContractPro®, we verify and reconcile all data before reporting. And a major percentage of distributor and operator transactions are now reported and processed electronically. This supports waterfall analytics with very timely and accurate information.