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Do you want to save on your tail spend?

Within an organization, many products and/or services are purchased that do not have a repetitive character and that are not of critical value for the primary process, the tail spend. These products are often bought by different employees, from different suppliers and result in many invoices and declarations. However, the purchase of these products entails much more costs than just the purchase price. Are you curious about the costs?

Tail spend

In every organization, many products/services are purchased that do not receive any attention because the importance or risk of these is often insufficiently recognized. It is often not clear what, where and by whom is purchased. The Pareto principle, which is based on an 80/20 distribution, applies here. 20% of the purchasing volume usually lies with 80% of the suppliers. This process can often be organized more efficiently and effectively.

The total cost picture

The Total Cost of Ownership (TCO) is the time, and therefore the costs, involved in purchasing products and/or services from suppliers. It is important to have insight into the total cost of external purchases. After all, purchasing a screwdriver can still be expensive if it is not sourced efficiently. A lot of profit can be made by lowering the TCO. Not the purchase price of the product itself, but the additional indirect costs cost an organization a lot of money. The result is that employees spend a lot of time, and therefore costs, on purchasing products with a non-repetitive character. How can this be done more efficiently and effectively?

Tail management

Tail management is managing your tail spend to optimize purchasing and the supply chain. Research by CAPS (Centre for Advanced Purchasing Studies) has shown that tail management leads to 60% fewer transactions, 40% lower transaction costs and 8% direct cost savings. One strategy for managing your tail spend is outsourcing. By outsourcing your tail spend, you reduce your supplier base by 80%, you benefit from economies of scale and you have better insight into and control over your order flow.

By transferring your tail spend to Corlido Group, you save time and money. The point of contact for all your suppliers is reduced to just one point of contact, namely Corlido Group. On average, this means that we take over more than 80% of your suppliers. Corlido Group is responsible for all agreements regarding quality, delivery times and prices with all suppliers. This results in fewer different suppliers and invoices for you, and you still have a network with more than 6000 suppliers. Corlido Group is developing a fully customized webshop where companies can place their orders quickly and easily. Without administrative actions that cost ten times as much as the purchased product itself.

More information about Tail spend management

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