The report highlights the importance of addressing tail spend in procurement. Tail spend refers to the 10% to 20% of an organization's spend accounted for by 80% of its suppliers, which are typically small, low-value transactions. However, these transactions can represent millions of pounds of spend and high administrative costs. Additionally, tail spend can be a source of non-compliance and fraudulent behavior, with non-compliant purchasing increasing costs by up to 20% compared to compliant buying. The report suggests that rather than trying to eliminate tail spend, procurement should focus on reducing it through effective supplier management and procurement processes.
