|INDUSTRY||Consumer Packaged Goods Manufacturing|
|PLATFORM||Microsoft Dynamics AX|
|PRODUCTS||TRM for AX|
Founded in 2005, our client is a New York-based CPG Manufacturer and privately held company that produces and sells Greek-style yogurt in the United States, Canada, and Australia. The company turns over approximately $1.5 billion in revenue, making it the largest yogurt maker in the USA.
As the first natural yogurt maker in the United States, our client was experiencing rapid growth, and identified a market for all-natural yogurt as the secret to their success. With their rapid growth, the company recognised a need for new systems and processes to keep up with demand. In the North American food industry, without correct records of deductions paid, manufacturers are vulnerable to profit recovery companies. These companies work with retailers to find deductions and collect retrospectively, and without correct records manufacturers could be liable for deductions going back two or three years.
Without the systems in place to record deductions correctly, our client was underpaying deductions and had retailers shortchanging them on invoices for payment of deductions owed. They needed a way of investigating, refusing, or defending deductions and the systems and processes in place to manage them. This was having repercussions on the P&L as without correct records, there was no visibility and accurate tracking of promotions in progress.
Promotions were being expensed after they had finished meaning that the financials were not being based on correct data. Our client recognised that a solution was needed that could accurately manage promotional activities and deductions.
Our client selected TRM for AX, the Flintfox Trade Revenue Management solution embedded with Dynamics AX. TRM for AX provides the ability to have all applicable pricing and promotional agreements automatically accounted for at the time that orders are placed.
The benefit for our client is the full insight and visibility gained from having full financial control over their deductions. The integration of Dynamics AX and Trade Revenue Management, means that the company now has capability for early accrual processing and recognition of commitments. The Dynamics AX shipment volume can also be adjusted by customer to take into account purchases made through a distributor. For example, if the company sells 80 cases to a customer and they purchase an additional 20 through a distributor, the company will accrue off all 100 cases.
With the ability to recognise the expense at the time the activity occurs, our client now knows at the end of the month what activities occurred and how much they cost. If the cost is higher than expected, the information is now on hand to investigate.
Furthermore, because our client can now manage by exception, they can go after deductions they do not owe, and also decline deductions from profit recovery companies if need be.