For Tail Spend Management

Increase purchasing power to lower raw material costs while decreasing the risk from single sourced raw materials.

Reduce COGS

Increase Procurement Efficiency

The Problem

Tail spend is not optimized resulting in higher raw material costs and supply chain risk from single sourced materials.

Large raw material portfolios and limited procurement resources result in most optimization efforts being directed at highest spend materials. Tail spend is minimally managed and is often only an area of focus as a reaction to an adverse event such as price increase or supply chain issue.

Up to thousands of materials and billions in spend (or approximately 20% of total direct spend) are not actively managed in terms of pricing, security of supply, consolidation, rationalization and most other procurement best practices.

Disparate and incomplete raw material data inhibits consolidation of spend, identification of risks, leveraging full purchasing power or utilization of tools like marketplaces, automatic RFPs or e-tenders to accelerate renegotiation.

Master data issues are exacerbated by multiple ERPs, regions that operate independently, independent business units, M&A activity and inconsistent data stewardship practices.

The Solution

Establish clean, enriched raw material master data to unlock cost saving and risk reducing initiatives.

Consolidate raw material portfolio into a single source of truth. Establish a clean hierarchy of supplier, manufacturer, brand, product, and SKU. Eliminate duplicates and outdated information. Enrich records with technical properties, specifications, certifications, and all relevant product information.

Use clean data to identify opportunities to consolidate spend. Leverage newly found purchasing power to renegotiate pricing. Utilize tools such as automatic RFP generation to maintain competitive pricing.

Easily identify single sourced materials. Leverage tools such as online marketplaces or existing vendors to source alternatives.