Tail spend usually represents 80% of an enterprise's supplier base but only accounts for 20% of total spend. Because these low-value purchases are highly fragmented, they rarely receive sourcing attention, creating a significant leak in company margins.
Strategies for Controlling Maverick Spend
Managing tail spend does not mean applying heavy procurement controls to €500 purchases. Instead, it is about creating automated paths and consolidated frameworks that direct spend to preferred suppliers.
Implement these strategies to optimize your low-value purchases:
- Vendor Consolidation: Group tail-end vendors by purchasing category and transition spend to a single pre-negotiated master vendor.
- Procurement Automation: Deploy e-procurement catalogs and pre-approved buying templates for recurring categories to eliminate administrative overhead.
- Maverick Buying Governance: Establish clear purchasing thresholds and routing policies to ensure unmanaged credit card purchases are kept to a minimum.
By bringing structure to tail-end spend, enterprises typically secure average savings of 10% to 15% across consolidated categories while improving supplier compliance and contract visibility.
