Innovative Cost Management
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Optimising the tail spend supply chain can deliver significant cost savings to your business.
In every organisation, procurement has finite resources and must set priorities. When it comes to optimising the supply chain it often makes sense to focus on the areas where the largest impact can be felt, namely the largest spend categories and/or the top contracted suppliers.
This leaves a ‘tail spend’ which typically accounts for 20% of spend and yet accounts for 80% of all suppliers. This can represent the majority of transactions a business can make, which can cover a huge range of product and service categories and often indirect (GNFR) purchases too. Due to time and people constraints many companies have failed to address this ‘non-critical’ tail spend, assuming incorrectly that the investment in time and resources needed to review the tail spend would not justify the end savings. This is a misconception.
Optimising the tail spend supply chain can deliver significant cost savings and deliver the following benefits:
- Take significant cost out of your procurement process
- Deliver up to 80% vendor reduction
- Leverage spend across your whole organisation – multiple cost centres
- Increase purchasing control
- Increase visibility of expenditure
- Improve efficiency through one order, one invoice and one delivery – or even many orders, one invoice!
- Reduce risk/increased compliance
- Outsource for reduced headcount and administration
- Improve CSR performance through managed, consolidated deliveries
Tel: 0114 321 6375
We helped a national buying and distribution company, situated in the Midlands save £1.5m in the first year of our involvement by helping implement a co-ordinated procurement strategy.
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While hiring a cost consultant has many benefits to your company, they are not to be confused with a cost broker. Although they have some similarities and work in the same sector, they are not the same thing.