18.06.2009

Summit Electric Improves Chargebacks

By: Neetin Datar, SAP

Chargeback management – or special pricing allowances (SPAs) as it is better known in the electrical distribution industry – is a big part of any wholesale distributor’s profit model. Summit Electric Supply, a U.S. $385 million electrical distributor based in Albuquerque, New Mexico, leveraged SAP and its best practices to increase its claims by 118 percent. It also got a return on investment in less than six months.

Headquarters Summit Electric in Albuquerque, New Mexico (photo: Summit Electric)

Summit Electric Supply is a privately-held wholesale distributor of electrical products founded in 1977. It is a standout in the hyper-competitive, U.S. $72 billion electrical wholesale distribution market. Summit had outgrown its legacy systems in the middle of 2006, when it selected SAP as its ERP partner.

A perfect fit

Initially, Summit was thinking of developing the chargeback process in-house. However, when the management learned about the application SAP Paybacks and Chargebacks by Vistex, it was quickly convinced that SAP could meet the company’s needs for the following reasons:

• Automated chargeback process would significantly reduce manual processing compared to what was required in Summit’s legacy system;
• EDI (Electronic Data Interchange)-enabled chargeback process would speed up claims’ turnaround time, help the company go paperless and positively impact its working capital requirements;
• Standard reporting would be configured to drive better visibility, control and decision-making.

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