Driving Operational Excellence for a Retailer by Modernizing Vendor Management

A leading U.S. retailer with stores in all 50 U.S. states recently partnered with GlobalLogic to modernize its vendor allowance tracking system used to calculate and track allowance funds as agreed upon between the retailer and vendors. The high reliance on manual processes resulted in additional costs and inefficiencies.

To improve the performance, efficiency, and agility of business operations, the retailer looked to GlobalLogic and its retail management systems modernization expertise to overhaul its vendor allowance management system by migrating it to the cloud, automating workflows, and simplifying collaboration.

By modernizing its vendor allowance tracking system with GlobalLogic, the retailer has been able to significantly improve operational efficiencies and reduce costs.

Challenge

The retailer faced significant challenges with its legacy vendor allowance management system, which was crucial for calculating and tracking allowance funds agreed upon with vendors. The system’s heavy reliance on manual processes led to several on-going challenges:

Missed opportunities and overlooked updates: Dependence on manual processes for managing vendor contracts frequently resulted in missed opportunities and overlooked term updates.
Calculation discrepancies: Discrepancies in rebate calculations between earned and accrued dollar values resulted in missed earning opportunities.
Arduous audit process: Fragmented data sources created an arduous audit process, draining resources and increasing risk.
Error-prone and labor-intensive data preparation: Manual data preparation for vendor rebates was not only prone to errors but also highly labor-intensive, leading to inefficiencies and increased costs.

Value Created

Leveraging GlobalLogic’s deep expertise in vendor management systems modernization and intelligent optimization, GlobalLogic delivered a wide range of services to simplify the vendor allowance tracking process, including:

Strategic planning and modernization: GlobalLogic performed a current state, risk, and dependencies assessment, planning for incremental modernization.
Advanced engineering and re-platforming: The mainframe application was reverse-engineered by transforming legacy code into scalable, multi-tier architecture. GlobalLogic delivered a complete retail vendor management software modernization program that included a reimagined front-end and a robust backend with updated calculations and business rules.
Seamless integration and automation: The new system was seamlessly integrated with the corporate general ledger and payment systems, providing new features to automate workflows and enhance overall efficiency.
Enhanced user experience and centralized data: GlobalLogic facilitated seamless information flow across multiple applications using Kafka messaging, improving the user experience with intuitive dashboards. The new system also acts as a centralized repository for vendors, inventory, vendor communications, and dashboards for insights and decision-making.

Impact

By modernizing the vendor allowance tracking system, GlobalLogic enabled the nationwide U.S. retailer to achieve significant and measurable improvements from its vendor management system modernization services:

Dramatic increase in operational efficiency:
- Boosted the number of programs configured automatically by 90%.
- Slashed manual calculations for programs by 80%, streamlining processes and saving valuable time.
- Reduced manual effort by 40% due to increased automation.
- Automated workflows enhanced the efficiency and reduced manual data entry by 80% for accounting, finance, and vendor teams.

Significant reduction in audits and errors:
- Achieved an 85% reduction in audits requiring manual intervention, minimizing errors and delays.

Substantial cost savings and revenue protection:
- Reduced vendor funding leakage for third parties by 50% due to more efficient tracking mechanisms, resulting in substantial cost savings.
Improved data management and accuracy:
- Standardized and automated finance reports, guaranteeing timely and accurate reporting for both accountants and vendors.
- Delivered vendors with debit memo rebate data to substantiate claims.
- Consolidated 95% of previously uncalculated and unmanaged programs into the vendor management system, ensuring more thorough and effective vendor allowance management.
Enhanced system performance and agility:
- The transition to a cloud-based infrastructure improved the user experience and boosted performance, efficiency, and agility.

By modernizing its vendor management systems, this leading U.S. retailer is now better equipped to manage its vendor relationships, ensuring the highest levels of accuracy and efficiency.

Connect with GlobalLogic today to explore how our retail vendor management software modernization expertise can drive personalized solutions and propel your retail business forward.