Recommended Best Practices SPA Set-up

Transcription

1 NAED NATIONAL ASSOIATION OF ELETRIAL DISTRIBUTORS Recommended Best Practices SPA Set-up Table of ontents Standardize Terminology 2 Standardize Formats 3 Quote Number & Name Terms & onditions 5 Effective & Expiration Dates 6 Branches Authorized to Use 7 End-ustomers Authorized 8 Identifying Line Items 9 ommunications ethodologies 10 Pricing onditions 11 Decimal Places 12 Automate Transmission 13 3 Electronic Formats 13 Timely Transmission 1 Loading the SPA Quotation 15 Appendix A 16 What You an Do 18 This White Paper, s in SPA Set-Up, is designed to facilitate a dialogue among distributors and manufacturers for the purposes of making the Special Pricing Authorization (SPA) Set-Up process more efficient and reducing costs for all parties involved. This document is not intended to express any views regarding individual manufacturers decisions to provide SPAs, including whether, when, to whom or in what amount SPAs are provided. All distributors and manufacturers will continue to make their own independent decisions regarding pricing and other competitive issues. Vision of the Best Possible SPA Process The ideal SPA Process is one in which both the distributor s and manufacturer s business systems communicate seamlessly, allowing for the timely and accurate exchange of data, removing human intervention, reducing errors, and increasing efficiency and effectiveness. If a decision is made to grant a Special Pricing Authorization (SPA), the SPA Set-Up process begins. For purposes of this white paper, the SPA Set-Up process includes the manufacturer transmitting an SPA Quotation to the distributor and the distributor loading the SPA Quotation into their business system. Discrepancy Resolution laim Filing SPA Updates SPA Set-up (topic of this white paper) SPA Set-up is composed of 2 steps. anufacturer transmits SPA Quotation to distributor. Distributor loads SPA into business system.

2 SPA Quotations that are not 100% accurate add costs to the channel due to the manual workarounds required to correct SPA laims, adjust invoices, analyze credits, reconcile deductions, and handle commercial situations. Increasing the accuracy, timeliness, and efficiency of the SPA Set-Up Process will reduce channel costs, promote efficiency, increase competition, and provide better service to end-customers. The three strategic priorities for improving the SPA Set-Up Process are: (1. standardize industry terminology; (2. standardize the format of SPA Quotations; and (3. automate transmission and processing of SPA Quotations. STANDARDIZE industry terminology for SPA Quotations STANDARDIZE the format of SPA Quotations AUTOATE the transmission and processing of SPA Quotations Standardize Industry Terminology for SPA Quotations urrent Situation A critical tool needed to reduce SPA processing costs is a common language to improve communications between distributors and manufacturers. The SPA Recommended Industry Vocabulary is designed to facilitate a dialogue among distributors and manufacturers for the purposes of making the SPA process more efficient and reducing costs for all parties involved by allowing channel partners to speak the same language. The SPA Recommended Industry Vocabulary is available for download at org/spa/. REOENDED BEST PRATIE Distributors and anufacturers: Use the SPA Recommended Industry Vocabulary for all SPA Quotations. Terminology in every SPA Quotation should be based on definitions in the SPA Recommended Industry Vocabulary. 2

3 Standardize the Format of SPA Quotations: EDIPro 85 urrent Situation Distributors receive written SPA Quotations from manufacturers in a variety of formats. While the information contained in an SPA Quotation is often similar, the format used by individual manufacturers varies. The variation in formats requires interpretation and manual intervention by distributors, making SPA Set-Up a slow, labor-intensive process, prone to human error. The Industry Standards ommittee volunteers from distributors, manufacturers, and software companies developed data formatting standards for SPA Quotations in the form of the EDIPro 85 Price Authorization Acknowledgement/Status transaction set in Six years later, many manufacturers have yet to adopt this data formatting standard. One format industry-wide for all SPA Quotations will minimize manual intervention and improve the efficiency of the channel. anufacturers: Provide SPA Quotations to individual distributors with file formatting based on the EDIPro 85 Price Authorization Acknowledgement data formatting standard. (See Appendix A). If Excel -based SPA Quotations are provided to distributors, the worksheet should be formatted the same as the EDIPro 85 Price Acknowledgement/Status Flat File standard to facilitate uploading into the distributor s business system. Distributors: Use the EDIPro 85 Price Authorization Acknowledgement data formatting standard for receiving SPA Quotations from manufacturers. ALL SPA Quotations based on the EDIPro 85 standard. 3

4 SPA Quote Number & ustomer/ontract Name urrent Situation Some manufacturers provide quotation reference numbers and names for specific SPA Quotations, while others do not. The use of a quote number and name allows to distributors to track SPAs in their business systems and serve end-customers more efficiently. anufacturers: Provide a Quote Number and a ustomer/ontract Name on Every SPA Quotation. Quote Numbers and ustomer/ontract Names help distributors provide better service to end-customers.

5 Terms & onditions for SPA Quotations urrent Situation While paper versions of Terms & onditions may be provided to distributor management, often the personnel dealing with SPAs on a daily basis may not have access to this information. Furthermore, there are also variations in SPA Quotation Terms & onditions and SPA laim Filing procedures among manufacturers. NOTE: SPA laim Filing is the subject of a separate white paper. anufacturers: Post standard SPA Quotation Terms & onditions and SPA laim Filing instructions on a password protected website accessible to authorized distributor personnel. learly state the information required to request an SPA Quotation. Provide, to the extent feasible, at least 60 days advance written notification of changes to standard SPA Quotation Terms & onditions. anufacturers: If special Terms & onditions pertain to specific SPA Quotations including those negotiated by third parties communicate this information as part of the individual written SPA Quotation at the line item level. Provide access to SPA Terms & onditions on a password protected website accessible to all authorized distributor personnel. 5

6 Effective and Expiration Dates for SPA Quotations urrent Situation Some manufacturers provide effective dates and expiration dates for SPA Quotations at the line item level; others do not. Furthermore, depending on the manufacturer, the expiration date is the last date the distributor can ship to the end-customer and qualify for the SPA or the last date the distributor can invoice the end-customer and qualify for the SPA. anufacturers: Specify the Effective Date and the Expiration Date at the line item level on all SPA Quotations. learly specify in your published procedures and guidelines if the SPA Quotation Effective Date is the first date the distributor can accept an order from the end-customer, ship to the end-customer, or the first date the distributor can invoice the end-customer and qualify for the SPA. anufacturers: Specify the SPA Quotation Expiration Date as the last date the distributor can invoice the end-customer and qualify for the SPA. onsider an internal grace period of 60 days for SPA laim Filing after the SPA Quotation Expiration Date to minimize manual intervention for discrepancies caused by back-order situations and end-customer returns. In the event of a end-customer return, use the SPA Quotation in effect at the time the end-customer purchased the product. Provide an Effective and Expiration Date for Every Line Item on an SPA Quotation. 6

7 Branches Authorized to Use the SPA urrent Situation ommercial problems arise when a price offered to an end-customer at one branch is not available from another branch authorized to sell the same product in a certain geographic market. For example, some end-customers may buy from multiple branch locations or travel long distances to work on project jobs in certain markets, i.e., Tucson and Phoenix, AZ; St. Paul, N and the Dakotas; or across Texas. In addition, inter-branch transfers across state lines and sometimes even drop shipments are necessary to meet end-customer service and delivery requirements. anufacturers: If the decision is made to grant an SPA to an end-customer, trading partners to discuss and jointly agree which branch locations are needed to service the specific end-customer on the SPA Quotation. NOTE: While branches not authorized to sell a manufacturer s product will not have access to the SPA Quotation, it is recommended that SPA Quotations follow customers across authorized branches. Distributors: If you are aware an end-customer using an SPA Quotation will be traveling outside the jointly defined geographical market for a project, contact the manufacturer to mutually develop a solution to meet the end-customer s needs. anufacturers: Where a drop shipment of an item on an SPA Quotation is necessary to meet end-customer service and delivery requirements, invoice the distributor at the price on the SPA Quotation to promote efficiency and negate the need for an SPA laim Filing. Jointly develop solutions to meet the end-customers needs. 7

8 End-ustomers Authorized to Use the SPA Quotation urrent Situation Some manufacturers clearly specify the end-customers authorized to use an SPA Quotation; other manufacturers provide broad, general descriptions that are open to interpretation. Since individual viewpoints may vary, discrepancies can easily occur, leading to manual workarounds to correct SPA laims, adjust invoices, and handle commercial situations with end-customers. anufacturers: learly identify the end-customers authorized to use each SPA Quotation. If authorized end-customers are specified by NAIS code, note the source of the NAIS-codes used. learly identify the end-customers authorized to use each SPA Quotation. 8

9 Identifying Line Items urrent Situation There are a numerous options for identifying the items authorized on an SPA Quotation item/part number, catalog number, UP/EAN/GTIN, and/or Vendor Product Group. Not only does the method for identifying the items authorized on an SPA Quotation vary by manufacturer, but the same manufacturer may include a combination of item/part numbers, catalog numbers, UP/GTINs, and/or Vendor Product Groups on the same SPA Quotation, requiring interpretation and manual intervention by distributor personnel. In addition, discrepancies may be created on SPA laims when the items in a Vendor Product Groups change. anufacturers: Use the Vendor Product Group or UP/GTIN as the primary identifier for items on an SPA Quotation; use individual part numbers as the secondary identifier. ommunicate the part numbers included in product groupings to distributors. No product should be contained in more than one Vendor Product Group. inimize changes to Vendor Product Groups used for pricing purposes. If the composition of Vendor Product Groups must change: Update the Industry Data warehouse (IDW) and other sources of information in a timely fashion. Provide updates to all affected SPA Quotations at least 30 days in advance of the effective date of the change. anufacturers: If individual items within a Vendor Product Group are subject to lower prices, issue a separate SPA Quotation. Distributors: Use the UP/GTIN as the primary product identification number; use your internal part number (if any) as the secondary identifier. Use the Vendor Product Group or UP/GTIN as the primary identifier. 9

10 Pricing ommunication ethodologies urrent Situation There are several communication methodologies for manufacturers to provide pricing for an SPA Quotation Discount ultipliers, Discount Percentages, and/or net distributor cost. Likewise, individual distributors have different preferences in how they prefer to receive pricing on SPA Quotations Discount ultipliers, Discount Percentages, and/or net distributor cost. Discrepancies on SPA laims are created when Discount ultipliers and Discount Percentages reference old or expired pricing sheets. Furthermore, situations sometimes arise where the price for an item on an SPA Quotation is higher than the distributor s regular in-to stock cost. In such a case, discrepancies in SPA laim Filing occur because many distributor business systems look for the best price. Distributors and anufacturers: Address your preferred pricing communication methodology one-on-one; endeavor to develop a mutually beneficial solution. anufacturers: If the SPA Quotation pricing is based on a Discount ultiplier or Discount Percent, identify at the individual line item level the appropriate anufacturer s Price Sheet by date and/or number, as well as the column pricing to be used---i.e., olumn 1, 2, or 3. Address preferred pricing communication methodology one-on-one. 10

11 Pricing ondition urrent Situation In some cases the pricing on an SPA Quotation is firm for the duration of the SPA Quotation. However, in other cases, especially where rare earth minerals are involved, SPA Quotations may specify Price-in-Effect (PIE) at the time of shipment. ommercial problems arise for distributors when a price offered to an end-customer at the time of purchase is not honored by manufacturers at the time of shipment. anufacturers: If a Price-in-Effect (PIE) SPA Quotation is utilized, provide either Discount ultipliers or Discount Percentages at the line item or Vendor Product Group level and reference the applicable anufacturer s Price Sheet to facilitate automatic price changes. End-ustomers need to know the price they will pay when an order is placed. 11

12 Decimal Places urrent Situation Although the EDIPro 85 Price Authorization Acknowledgement/Status data formatting standard allows for no more than decimal places, the number of decimal places actually used by individual manufacturers and distributors for pricing purposes varies. Inconsistencies in the use of decimal places for pricing purposes causes discrepancies on SPA laims, requiring costly, manual intervention by both channel partners to reconcile the minute discrepancies caused by rounding. Distributors and anufacturers: Unless necessary to address competitive situation(s), or for other business reasons, use no more than decimal places for pricing purposes. anufacturers: ake sure that the prices stored in the Industry Data Warehouse (IDW) and on your secure website (accessible to authorized distributor personnel) contain no more than decimal places. Inconsistencies in decimal places creates discrepancies. 12

13 Automate the Transmission and Processing of SPA Quotations: EDI, Flat File, or Excel urrent Situation Distributors receive written SPA Quotations from manufacturers in a variety of fashions paper quotes, by looking information up on password protected websites, downloading files from a password protected website, as attachments to s, via Flat Files, and via Electronic Data Interchange (EDI). Each method has its own advantages and disadvantages. Electronic Data Interchange (EDI) is a proven format for exchanging standard business documents. However, although EDI has been in use since the mid-1980 s, there are still manufacturers and distributors who have not adopted this technology. The transaction set for transmitting SPA Quotations electronically is the EDIPro 85 Price Authorization Acknowledgement/Status. Flat File Transmission: Flat Files contain records without the structured relationships like the rows and columns in Excel. If EDI is not possible, Flat Files offer the next best method of automating the transmission and loading of SPA Quotations for both manufacturers and distributors. NOTE: A copy of the IDEA EDIPRO 85 Flat File Standard is included in Appendix A. ing Files as Attachments: Some manufacturers SPA Quotations to distributors in.pdf,.txt,.dat, and/or Excel format. Files in.txt,.dat, and/or Excel allow distributors a semblance of automation in uploading the information into their business system and are considered electronic transmission. However,.pdf files require distributors to manually input the data into their business system and are not considered electronic transmission. Web-Based Applications: While many manufacturers offer distributors the opportunity to print or download SPA Quotations from password protected websites, downloading the information is a cumbersome, timeconsuming process. Thus, the major advantages of automating the transmission of SPA Quotations---increased productivity, accuracy of data, and speed---are lost with web-based applications. force recommends SPA Quotations be transmitted and processed electronically. anufacturers: Offer 3 electronic options for SPA Quotation transmission: EDI, Flat File, and Excel. The file formatting for all 3 electronic options should be based on the EDIPro 85 Standard. anufacturers: onvert existing Excel quotations to be congruent with the EDIPro 85 Flat File Standard. NOTE: Previous task forces set the goal for converting.pdf and paper SPA quotations to Excel in the EDIPRO 85 industry standard format as September 1, Distributors: Use the electronic option for receiving SPA Quotations---EDI, Flat File, or Excel --- that best fits the needs of your individual company. ommunicate your preferred method of receiving SPA Quotations to the manufacturers you represent. If you elect to receive SPA Quotations in Excel via , make sure either (1. your SPA specialist provides out-of-office messages with contact information for someone who can address SPA Quotations in their absence; or, (2. a group is established and monitored on a timely basis. 13

14 Transmit SPA Quotations Electronically---EDI, Flat File, or Excel File via ---in the EDIPro 85 industry standard format. Timely Transmission of Documentation urrent Situation Depending on the manufacturer, the time elapsed between verbal authorization of an SPA Quotation and the transmission of SPA Quotation documentation to a distributor ranges from 2 hours to over 30 days. Delays in providing documentation authorizing the SPA Quotation including all the information required to file an SPA laim---often lead to pricing errors with end-customers and discrepancies on SPA laims, resulting in additional work for both distributors and manufacturers. anufacturers: If the decision is made to grant an SPA to a distributor, transmit documentation of the SPA Quotation including all information needed for SPA laim Filing in no more than 72 hours of verbal authorization. NOTE: Time is of the essence. Quicker transmission is better! Transmit SPA Quotation documentation in no more than 72 hours of verbal authorization. 1

15 Loading the SPA Quotation in the Distributors Business System urrent Situation Setting-Up an SPA Quotation in a distributor s business system can be automatic if the SPA Quotation is received via Electronic Data Interchange (EDI) in the EDIPro 85 standard format. However, SPA Quotations received via Flat File or Excel require manual intervention to load in the distributor s business system. Furthermore, if the SPA Quotation is not loaded before the end-customer is invoiced, problems can arise---the end-customer may be invoiced at the wrong price and there may be a discrepancy in the SPA laim. Distributors: Add the SPA Quotation to your business system in no more than 72 hours of receipt and prior to invoicing the end-customer. NOTE: Time is of the essence. Quicker loading is better. Verify the written documentation received from the manufacturer is consistent with the verbal authorization. Add SPA Quotation information to your business system in no more than 72 hours of receipt. 15

16 Appendix A SPEIAL PRIE AUTHORIZATION Flat File/onvertible to EDIPro 85 SPA /13/2006 USE Field olor Key = Required Fields c = andatory - onditional on something = onditional Fields can be made anditory if utually Agreed Upon Between Trading Partners Field# Field Name Use Format Description Examples omments EDI Record ID 1 Record ID X(8) Price Delivery SPA1.06 Used for both SPA and Info Stock Net Pricing ENV 2 Sender s ID Qualifier c X(2) Sender s ID Qualifier 12 Only required for conversion to EDI. For non-edi companies, a qualifier of 12 indicating (telephone number) would be used. ENV 3 Sender s ID c X(15) Sender s Identifier ode Only required for conversion to EDI. ENV Receiver s ID Qualifier c X(2) Receiver s ID Qualifier 12 Only required for conversion to EDI. For non-edi companies, a qualifier of 12 indicating (telephone number) would be used. ENV 5 Receiver s ID c X(15) Receiver s Identifier ode Only required for conversion to EDI. ENV 6 Transaction Set Purpose X(02) Transaction Set Purpose Original 30 - Renewal, 0 - hange, 56 -Expired, 1 Advance Notice, 16 Proposal BPA / Date X(8) Date YYDD BPA / urrency X(3) urrency USD AD - anadian Dollars, XP - exican Peso, USD - United States Dollars UR / anufacturer Name X(35) anufacturer Name Siemens Required if not converting to EDI N1 / Price Quote Number X(30) Quote Number PR38956 Quote Number ON / Quote Name X(30) Quote Name Durham Public Schools ontract Reference. Required in conjunction with, or instead of, Price Quote Number for specific trading partner agreements. ON / Revision Number X(30) Version Number 001 Revision Number REF / Quote Status ode X(2) Quote Status ode O ontract Status ode: O - Original, EX - Expired, R - Renewed, - odified, - ancelled, Pr - Proposed ON / 86 1 Effective Date X(8) Quotation Effective Date ontract Effective Date. Required if available DT / Expiration Date X(8) Quotation Expiration Date ontract Expiration Date. Required if available DT / Product Transfer Type ode X(2) Transaction Type SD Transaction Type: DS - Drop Ship Sales, SD - Ship and Debit Sale, SS - Stock Sale, S - ontract Sale PAD / Buyer Name X(60) Buyer Name Jane Smith PER / Distributor Name X(60) Distributor Name AB Distributor Required if not converting to EDI N1 / Distributor Branch ID X(80) anufacturer s Branch code for Distributor location 0001 Alphanumeric code identifying branch N1 / Distributor Address 1 X(55) Distributor Address 1 15 Lasalle St N3 / Distributor Address 2 X(55) Distributor Address 2 Suite 10 N3 / Distributor ity X(30) Distributor ity hicago N / Distributor State or Province X(2) Distributor State or Province IL N / Distributor Zip or Postal ode X(15) Distributor Zip or Postal ode N / End User Qualfier X(3) Distributor ountry ode USA AN - anada, EX - exico, USA - United States N / End User ID c X(15) End-ustomer Number Distributor Account Number for End User ustomer ID. Required if Account Numbers have been assigned. N1 / End User Name X(35) End-ustomer Name ontractor Bob End User Name N1 / End User Address 1 X(55) End-ustomer Address 1 20 Pine St Address Information N3 / End User Address 2 X(55) End-ustomer Address 2 Suite 2 Address Information N3 / End User ity X(30) End-ustomer ity Tuscon N / End User State X(2) End-ustomer State AZ N / End User Zip X(15) End-ustomer Zip 8521 N / End User ountry X(3) End-ustomer ountry USA AN - anada, EX - exico, USA - United States N / Product Group ode X(12) Vendor Product Group ode TB Price Group / Product Group / lass ode / Sub lass ode Required for Pricing by product catagories. PID / Product Group Name X(80) Vendor Product Groupe Name Terminals PID / Line Item Number X(20) Line Item Number 1 LIN /

17 Appendix A ontinued SPEIAL PRIE AUTHORIZATION Flat File (Page 2 of 2) USE Field olor Key = Required Fields c = andatory - onditional on something = onditional Fields can be made anditory if utually Agreed Upon Between Trading Partners Field# Field Name Use Format Description Examples omments EDI Record ID 37 UP/EAN/GTIN Qualifer c X(2) UP/EAN/GTIN Qualifer UK Required if using UP/EAN/GTIN. See Appendix A2 for allowable values. LIN / UP/EAN/GTIN Number X(15) UP/EAN/GTIN Number Required if Vendor atalog Number or NAED ode is not provided. LIN / Vendor atalog Number c X(8) Item Part Number BZOR6A12 Required if UP/EAN/GTIN number or NAED ode is not provided. LIN / Buyer Part Number c X(8) Buyer Part Number ESO999 Optional: As agreed upon between the mfg and distributor LIN / NAED ode X(30) NAED Assigned Product code Required if using UP/EAN/GTIN number or Vendor atalog Number is not provided. LIN / Item Description X(80) Item Description Wiring Accessory PID / Unit Price c S9(9).9999 Unit Price 1.29 Price per unit, after applying multiplier (if applicable) from field 6. Required if Product Group ode is not used. TP / 0212 Price UO c X(2) Price Unit of easure PE See Appendix A1 for allowable values. Required with Unit Price field. TP / Price Sheet X(30) anufacturer s Price Sheet SD Price Sheet Number / Name that price applies to REF / Discount ultiplier c 9(10) Discount ultiplier 85 e.g X.85 = 1.29 (unit price). Required if Unit Price is not provided (ategory Priced Products) TP / Discount Percentage c 9(10) Discount Percentage 15 e.g X.15 = 2.52 (unit price). Required if Unit Price is not provided (ategory Priced Products) TP / inimum Order Quantity 9(15) inimum Order Quantity 1,000 TB / aximum Order Quantity 9(15) aximum Order Quantity 50,000 TB / inimum Order Value 9(15) inimum Value 500 TB / Base Price Type X(3) Base Price Type LPR, AT, PAQ or QTE Base Price Type applicable to Unit Price (field 2) LPR - List AT - Book, PAQ (price Break Qty). QTE (quote) TB / Pricing ondition X(3) Pricing ondition FUP Pricing condition applicable to Unit Price (field 2) FUP - Firm Price, PIE - Price in Effect (Non-Firm).** TB / Previous Quote/ontract Number X(30) Previous Quote/ontract Number PR For use when new quote/contract number is issued for changes/revisions. REF / Number of Line Items X(6) Number of Line Items Line Item number (1,2,3,...) The first record must start with 1 to indicate the beginning of the document. 1 END X(8) End Record END 5 Total Number of Line Items X(6) Total Number of Line Items Total Number of Line Items Appendix A1 - Field 3 Allowable Values HF - Per 100 Feet HP - Price per Hundred N - No harge PE - Price per Each PF - Price per Foot PP - Price per Pound TF - Per 1000 Feet TP - Price per Thousand U - Price per Unit of easure Appendix A2 - Field 37 Allowable Values EN - European Article Number (EAN) ( ) U2 - U.P.. Shipping ontainer ode ( ) UD-U.P../EAN onsumer Package ode (2-5-5) UI-U.P.. onsumer Package ode (1-5-5) UK-U.P../EAN Shipping ontainer ode ( ) UP-U.P.. onsumer Package ode ( ) **IDEA Note: The X12 qualifier Pie actually stands for Price in Effect at time of shipment. However, for the use of this field solely within the SPA Flat File, it is to be used to reflect a Non-Firm Price In Effect only. This flat file is designed to support both SOA pricing and Into Stock Negotiated Pricing 17

18 What You an Do Please help us leverage the collective knowledge of the industry by giving us your feedback! Share your insight and input with the task force by calling NAED ember Services toll free at or ing And be on the look-out for additional tools from NAED s 2012 SPA Task Force, available for download on 18