At the recent NEMRA Annual conference in Dallas, 17 electrical manufacturers endorsed proposed reporting formats for point of sale/point of transfer (POS/POT) reports submitted by distributors to manufacturers and supplied to manufacturer reps by their manufacturers.
“Our members have talked about problems with the POS / POT process for a long time and many feel that as much as 10% to 20% of their earned income is impacted by poor POS/POT reporting procedures,” said Ken Hooper, president of NEMRA. “The research clearly documented that many reps will direct business to distributors from whom they know they will be paid. Working with our manufacturers committee, it was decided to address the issue and to make it more equitable and efficient for all.”
The endorsing companies are American Polywater, CRC, Electri-Flex, Halex, General Cable, Ilsco, King Electric, Legrand, Leviton, Lighting Efficient Design, Littelfuse, Minerallac, Morris Products, Northern Cables, Orbit Industries, RAB Lighting and Ventamatic.
The reporting standard, which integrates 15 core reporting fields, is the first deliverable from NEMRA's State of the POS/POT study released last year. The report recommended a task force consisting of manufacturers and manufacturer reps be formed to help streamline reporting and improve the overall process. The objective being to ensure reps are appropriately compensated and that complete field support is provided to distributors that provide accurate POS / POT reports. As part of this initiative NEMRA has engaged with the five national chains who have pledged their support in improving the process.
The major benefit of this initial standard, which focuses on non-commodity items, is to standardize the report format, resulting in the same columns being reported in the same order for multiple manufacturers. Additional information agreed upon between a distributor and a manufacturer would be placed to the right of the first fifteen columns.
According to a few reps at the meeting, "These are the types of initiatives that help us be more efficient and productive.” Another commented, "This will help us better administer our POS/POT information and manage our commissions." A third rep said, "Easily understood and presented information will help us better support distributors that have RDCs and CDCs (distribution centers), it provides more transparency." One distributor ERP company commented, "a common format just makes sense."
Additionally, the term "point of sale," for most manufacturers, has been refined as "place of sale" as this supports the need for appropriate compensation reporting. Customer level information is left to the discretion of the distributor / manufacturer relationship.
A number of best practices are shared in the document. Recommendations to address commodity product reporting are planned for later this year. This industry initiative is open to all manufacturers whether they go to market through manufacturer representatives, direct sales people or lighting agents as it is designed to streamline processes for all channel members. There is no cost to adopt the standard.
NEMRA is currently soliciting comments on these standards through March 31. To receive a copy of the standards and to endorse them, email Ken Hooper at [email protected] or David Gordon, NEMRA POS / POT project facilitator at [email protected]