Interlynx: Digitally Creating Frictionless Systems for SPAs, POS and More

Over the past year or so there has been much discussion in the electrical distribution industry about digitalization and process improvement. Some of it is company specific, some of it is discussion about the potential for broader industry initiatives that, theoretically, could consolidate some systems.

At the same time the visibility for rebate administration has risen, along with SPAs.

Interlynx Systems is a channel-focused digital process company that “creates systems that help Distributors and Manufacturers work better together.” They have worked with electrical and automation manufacturers in the areas of rebates, SPA management, POS management and lead reporting systems. According to Larry White, president, “We identify sources of friction that distract from a constructive working relationship.” Interlynx Systems is also an ElectricalTrends advertiser and has attended a number of NAED conferences.

Given the increased industry interest in digitizing processes with goals of reducing costs, improving productivity, enabling business duplicity due to workforce change / challenges, I thought it would be a good opportunity have an “email chat” with Larry.

• For those not familiar with Interlynx Systems, could you describe the company and services?
  • Interlynx builds systems that help manufacturers and distributors reduce the friction in their relationship.  We have developed a suite of services for both manufacturers and distributors that reduce, or even eliminate this friction by continuously working to understand the needs of both parties and benefit both parties.  That is how we drive collaboration. We help companies in the areas of:
    • Sales Lead Management
    • Quotation Management
    • Point of Sale Reporting for Manufacturers and Distributors
      • Interlynx manages a POS program for AHTD (Association of High Tech Distributors)
    • Inventory Management   to help manufacturers monitor in-field inventory
      • And we have an Inventory management module for distributors
    • SPA / Rebate Management
    • Commission Splits / COGS
  • Why did you get started in helping manufacturers administer the SPA / Rebate Management?
    • We identified that the SPA / Rebate process is a major point of aggravation and negativity for both parties and so we built a system to solve that problem.  So, when one of our clients asked us to look at their SPA/Rebate program to see if it could be improved upon, we found an opportunity. We found a lot of disturbing issues – the client was not reviewing claims against the contracts (too time consuming), many of the contracts were expired and it was pretty much a “rubber stamp” of the distributor claim.  Within 8 weeks, we developed our first Rebate Management system for them and saved them over $3.0M in 3 months.
  • What do you hear from both manufacturers and distributors about the way SPS / Rebate programs work for them?
    • Both agree that it makes sense on paper – they can protect accounts, protect margins by making targeted in pricing decisions, and it seems like it would be fair to both parties.  In reality, neither quite trusts the execution – payout accuracy, shifting policies, etc – and both parties feel exhausted and sometimes “screwed” after the dust settles.  It’s like the accountants from both parties “prepare for battle” every month at payout time.
  • What is the biggest friction point of the SPA / Rebate process for distributors?
    • Transparency is a big issue – manufacturers don’t provide a detailed reconciliation of the payout calculation and if they do, it’s messy.  Manufacturers often lose sight that each distributor has a different expectation for each supplier that has a SPA / Rebate program.  The distributor has to understand the policies, calculations, reporting and nuances of each manufacturers’ program.  Distributors divert a lot of “non sales” resources to comply with the different programs and to verify payouts.   They also have to wait for payouts – that impacts cash flow and float.  It can be pretty chaotic and negative from a distributor point of view.
  • What are the biggest friction points of the SPA/ Rebate process for manufacturers?
    • Distributors tend to dispute a lot of transactions, and (rightfully) argue on policy and fight over nickels and dimes.  Reviewing and responding to disputes is seemingly endless and a cost drag for the manufacturer.  Many disputes are the result of confusion or even errors that manufacturers routinely make. There is a lot of “rework” on rebate payout calculations.
  • Why should a manufacturer consider automating their SPA process?
    • For the most part, manufacturers are running their SPA / Rebate process on spreadsheets and spreadsheets are not sophisticated enough to handle the contracts, claims and rebate steps. Spreadsheets are prone to human error and allow for very limited situational logic that only a software solution can provide.  “In House” or insourcing a SPA/Rebate management can be super expensive – salaries, head count and labor shortages for the types of people required to insource don’t work for a lot of manufacturers.
  • Why Interlynx Systems?
    • We are not an IT Company looking for a market.  We leverage our deep understanding and years of experience in each of the industries we serve and develop solutions around the friction points we uncover.

To learn more about Interlynx Systems and see if they could be a solution, click here to contact them, connect with Larry White on LinkedIn, or click here to email Larry directly.

Takeaways

About Interlynx

• Admittedly my questions focused on SPAs and Rebates. Interlynx also works with a number of companies on their POS process.
• Interlynx already has integrations with 20 different companies. Some are ERP companies; others are CRM platforms (for lead management system integration.)
• Interlynx has extensive experience in the automation industry and hence is familiar with the needs of industrially-oriented companies as well as the core processes that many have been challenged with.
• From numerous conversations with Larry, he’s very customer-oriented, service-oriented, wants to help companies get to “yes”, flexible, and community-oriented. The company has an avowed commitment to “giving back.”

From a macro viewpoint, as companies seek to improve and standardize processes, improve profitability by plugging profit leaks, and be easier to do business with by facilitating digital connectivity solution providers such as Interlynx will become more integral to the fabric of a company, and the industry. The mentality of handling it all in-house will need to evolve as companies become personnel resource constrained, seek best practices from companies that focus on specific “tasks” and recognize that specialized resources can be cost effective when considered from a “total cost of ownership” viewpoint.

It’s always interesting to hear companies use the phrase “total cost of ownership (or relationship) as they talk to customers about their product / solution when they want the customer not to focus on acquisition cost but internally, think it is “cheaper” to not write a check to acquire expertise.

Companies like Interlynx have decades of experience in managing these types of systems that many in the industry have struggled with … for decades.

Perhaps “outsourcing” will become part of the digital evolution?