Tail SpendArticles, videos, presentations and infographics about Tail Spend
Here is a selection of articles, white papers and infographics looking at managing tail spend. We look at what tail spend is and provide strategies for how to manage your tail expenditure.
Direct and Indirect Spend cause a divergence within Procurement. With significantly different needs, spend profiles and challenges associated with them.
To make effective decisions on Indirect Spend it is important to understand the scope and breadth of spend in this category. This requires a deep dive into the data.
Every year, companies make millions of purchases that are too small to be handled by procurement or too infrequent to be included in a single vendor catalog. These purchases are known as tail spend.
Do you have a Tail Spend problem? This article covers 5 signs that indicate you could have a tail spend problem.
Tackling Tail Spend is not a quick and easy challenge. It takes perseverance and commitment to hunt down the data, challenge silo approaches, change embedded habits and lock in process improvements and savings. Don’t expect too many quick wins, but the prize is great enough – provided you have a Can Do approach.
Are you still chasing your tail spend? Does your business spend millions on ad hoc and unpredictable low cost products and services?
You know the kind of things that most businesses don’t plan for, but still spend 10-20% of their revenues on. The type of transactions that are too small for procurement to bother with but too numerous to ignore.
Tail Spend usually constitutes the 20% of spend that is ignored and not actively managed. It is usually composed of low value, low volume and non-critical commodity products. These products could be anything like uniform, apparels, office furniture, or papers....
The traditional view of procurement, promoted by large consultancies, is to focus on managing the top 80% of spend and ignore the 20% of spend in the tail. The argument for ignoring spend is that there are few opportunities for savings. However, as "sourcing doctor"...
Tail Spend Infographic: Challenges and Solutions
Every year companies make millions of purchases that are too small to be handled by procurement or too infrequent to be included in a single vendor catalog.
In procurement circles, it is widely accepted that the Pareto Principle holds true. 80% of a companies spend touches just 20% of suppliers. Conversely, 20% of a company's annual spend is with 80% of the supplier base. Naturally, when companies are looking for cost...
20% of the typical companies spend is complex expenditure but many companies struggle to account for this type of spend. Do you know how much your business spent today on complex products & services… …locally, nationally or globally? How much do you spend on...
Complex indirect spend categories or ‘Tail Spend’ present unique sourcing challenges to most organisations. These categories are characterised by being unpredictable in their demand, they require accurate specifications, are deadline driven and often have a low average order value.
Tail spend is a phrase that is commonly used to describe the spend that a company is making but not accounting for or managing strategically through the company’s procurement policy. This is the spend that falls outside the main purchasing categories.
Often these purchases are made by employees who may not have the time or skills to make effective purchasing decisions.
5 essential steps for Chief Procurement Officers to control complex expenditure from Claritum
There can be significant benefits of getting tail spend under control. Not only cost savings, but reduced supply risk, time savings, better compliance and improved satisfaction. When it comes to buying low cost products and services simplicity is everything. Do you...
When seeking to gain control over complex category expenditure, expert audits should be treated with caution as they are inevitably historical in nature and based on flawed base data that can be gathered through the company's own resources. Using a "basket of goods"...