Reduce procurement costs by an average of 37 percent
Significantly reduce tail spend in procurement with FACTUREE
Berlin, 29 October 2024 – 20 percent of the purchasing volume in manufacturing companies typically accounts for 80 percent of suppliers. This large number of small orders and high supplier count make management complex and costly. Often, this so-called tail spend is not adequately managed, as the individual amounts seem small compared to main expenditures. FACTUREE (www.facturee.de) replaces the management of thousands of suppliers for companies with its digital procurement model as a single interface, generating an average of 37 percent savings for its customers.
Tail spend in procurement refers to the smaller, less significant part of a company's total expenditures, which is often unstructured and spread across numerous small transactions. Compared to strategically important suppliers and high-volume procurements, these expenses appear minimal, leading to frequent neglect in process optimization in this area. "In many companies, tail spend is a real cost driver. Large companies often have between 60,000 and 100,000 suppliers, resulting in immense operational complexity. Every small order and each irregular procurement generate disproportionately high costs and consume valuable resources," explains Niklas Oertel, Vice President of Growth at FACTUREE.
From thousands of suppliers to a single interface
Through the digitalization and automation of the procurement process, FACTUREE offers a solution that enables companies to significantly reduce tail spend. FACTUREE has an extensive network of manufacturing partners and centralizes the entire procurement process for its clients. "With our digital procurement, we replace the management of thousands of suppliers for companies. From supplier search and technical consulting to manufacturing, quality assurance, and on-time delivery – everything is handled through us as a single interface. By working with us, companies not only greatly reduce their effort but can also save an average of 37 percent on procurement costs – an advantage that becomes especially impactful for large companies with extensive supplier networks," says Niklas Oertel.
Faster time-to-market and more time for strategic tasks
If the effort required for supplier management is significantly reduced, time-to-market can also be greatly accelerated. Companies can respond more agilely to market changes and remain operational even in crisis situations, reducing the risk of supply bottlenecks. If a supplier in the FACTUREE network is unavailable, an alternative is always ready, ensuring resilience in the supply chain. Alongside operational support, FACTUREE offers each customer personalized consultation to help companies consistently find the best solutions. "Our digital procurement enables companies to act with greater resilience and future-readiness. These are critical capabilities for staying competitive in today’s volatile markets. Many of our customers also report that they previously had little time for strategic procurement tasks due to the demands of tail spend management. With digital procurement, they gain valuable flexibility and can focus on strategic projects," says Niklas Oertel.
