Capitalize on Last Minute Deals

View From The Ridge: 44

February 19, 2016

Rod Daugherty

Vice President, Product Strategy

A great way to improve profit for your enterprise is to ensure there is no money left on the table from supplier deal discounts. Some of you may already be familiar with the Deal Solution in Blue Ridge Supply Chain Planning. This allows you to keep track of supplier deals and recommends forward buys that will best maximize profitability. When your supplier offers a last minute deal for placing the order today, you need a quick way to enter the deal terms and simulate the effectiveness of the deal. Real-Time Forward Buy enables fast evaluation of last minute deals.

Business Scenario

One-Time Deal for Today’s Order Only

One of your suppliers calls and offers a one-time 5% discount, valid only on a select line of items, and only if an order of at least $5,000 is placed today. (Sounds like we’re at the end of the quarter, and someone needs to make their numbers…) To quickly determine the impact of this deal on today’s order, you go to the order, select the items included in the offer, and submit a Real-Time Forward Buy at a 5% discount. The effect of a 5% deal is simulated on the affected items and Forward Buy days are added. The simulation will display the updated order totals, forward buy days, forward buy units and the incremental profit so you can quickly see the impact of the deal. Assuming the final order is acceptable, you will approve the simulation. This will then recalculate the order, noting the Real-Time Forward Buy items as order exceptions and you are ready to approve the order. If the resulting Forward Buy is not satisfactory, you simply recalculate the order to clear the Real-Time Forward Buy and return the order to its original starting point.

Targeted Order Amount

Let’s say the supplier is asking for a $15,000 order, but doesn’t initially offer any discount. You pull up today’s order, and see that its need is only at $3,000 and is not even Due. In order to create the $15,000 order you are going to want something in return. You can perform a Real-Time Forward Buy simulation, but this time you enter the target order amount and ask Real-Time Forward Buy to determine what kind of discount would be necessary to make the order profitable. Real-Time Forward Buy evaluates the additional days coverage needed to build the order to $15,000, and says you need a certain discount to generate the necessary Forward Buy days. Once agreed upon, the Real-Time Forward Buy discount is applied to the items, Forward Buy days are added, and the order totals are updated. The order can now be approved and sent to the host for processing, with the appropriate discount reflected in the outbound file. Or, as before, the simulation can be cleared by simply recalculating the order. Real-Time Forward Buy is administered directly from the Order Summary.

Selection of the Forward Buy simulation brings up the screen and with a few quick keystrokes you have your answer. Real-Time Forward Buy is a quick and convenient way to take advantage of last minute deal offers and ultimately improves your profitability.