REDUCE EFFORT. MAXIMIZE EFFICIENCY.

Tail-Spend Optimization

minimize high process costs

Uncontrolled spending - the devil is in the detail.

Your tail-end spend is the accumulation of your relatively small-scale spend, representing "only" 10-20% of your total spend, but with high transactivity due to relative fragmentation. Dealing with tail-end-spend  involves two key challenges. First, high transaction costs are related to a low value contribution of these products and services to the company; and second, the effort involved in potential cost optimization initiatives is typically not at a healthy ratio to the expected monetary success.

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Managed Spend

The first 80% are in focus. This is where your strategic suppliers are located. 

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Unmanaged Spend

Many companies ignore the final percentages of the spend cube. Not us!

Due to their low volume and the broad distribution of these needs among various areas of demand in the company, these purchases are often not actively managed. Therefore, in many cases a high cost reduction potential can be assumed, especially by using process and pooling efficiencies. We help you to leverage this potential.

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Procurement Process

Three successful approaches

The procurement process can be broken down into three steps to optimize your tail-end spend: Bundling, Negotiation and Elimination.

01

Bundling

We bundle your needs to reduce administration and build negotiating power by combining existing long-tail needs into larger lots.

02

Negotiation

Larger purchase quantities lead to cost advantages due to economies of scale. With quickly implementable negotiation strategies, we realize noticeable savings for you.

03

Elimination

We use demand management measures to check whether the expense associated with procurement is in proportion to the benefit and eliminate unnecessary expenditure on a sustainable basis.

Procurement Process

E­-Procurement

Tail-spend optimization is also primarily about keeping the use of resources as low as possible so that effort and benefit are in a positive relationship.

For short-term optimization of the tail end, short- to medium-term optimization quick-win negotiations are suitable.

For long-term and sustainable optimization, however, the focus should be on using e-procurement tools that make the procurement process efficient, create bundling effects, and conserve your resources. 

We assist you in finding the right tool!

Efficiency by Digitization.

Contact

office@duempelfeldpartners.com

Address

Grafenberger Allee 277-287                     40237 Düsseldorf

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