In the complex landscape of procurement, tail spend – the numerous small, infrequent, and unmanaged purchases that collectively account for a substantial portion of a company’s spending – often flies under the radar. Despite the potential for cost savings, increased efficiency, and enhanced control it represents, tail spend has been traditionally overlooked due to its fragmented nature and low individual value. However, this under-serviced area of procurement is where SDI and Fairmarkit saw an opportunity to drive transformation.
Tail spend often only gains attention when excess inventory, inflated shipping fees,
or a product outage disrupts operations, leading to a flurry of short-lived, reactive measures. Once the immediate crisis is resolved, however, tail spend reverts to being ignored. This cycle of ‘chasing the tail’ is not only inefficient but also costly. According toProactis, a 5% savings on tail spend could equate to a 10% increase in net profit.
The tail spend revolution powered by SDI and Fairmarkit is just the beginning. As more organizations start to recognize the potential of managed tail spend, it won’t be long before this becomes a standard practice in procurement, bringing significant value and competitive advantage to those who choose to embrace it. Download the eBook now to learn more.