Effective Tail Spend Management – Cost Saving Opportunities in the Pharmaceutical Industry
SpendEdge’s latest tail-spend assessment helps a pharmaceutical company achieve about 26% savings in few categories and about 57% reduction in the supplier base.
Optimizing resources and exploring cost reduction opportunities are the two biggest challenges faced by various organizations in the global market. By implementing different effective tail spend strategies, a company can save millions on overhead costs. The organizations in the pharmaceutical sectors are increasing their focus on improving the visibility of low-value spend and identifying new areas of process improvement and automation. Such efforts to optimize business operations will result in sustained savings and informed purchasing decisions. Additionally, increasing supply chain visibility in business processes such as sourcing, procurement, and category management will boost the profitability. The tail spend analysis engagement by SpendEdge helps pharmaceutical companies to optimize their supplier base and improve process efficiencies. The engagement develops an exhaustive assessment of the maintenance, repair, and operations (MRO) category and streamlines their sourcing process. The tail spend analysis team gathers data from client’s ERP system and analyzes the category spend and identifies cost saving opportunities.
The implementation of online and punch-out catalogs, p-cards, and improved compliance reporting will result in a tail-spend reduction. Automation in procurement and sourcing is the smartest way of controlling the tail-spend in any organization. The introduction of data analytics tools, e-procurement systems, and innovative cataloging systems will result in optimized supply chain and improve tail-spend management.
Mobile applications in MRO
Companies are installing mobile application for planning and execution of MRO tasks. These applications are designed to enhance the productivity of MRO tasks and boost customer satisfaction levels. Mobile applications provide access to real-time data on stocks, which allows vendors to evaluate stock availability and effectively manage inventories. Some of the apps available in the market provide real-time data on stocks, workflow approvals, location-based product lists, and on-the-go customer service.
Linking different business process
Taking a grip over the tail-spend requires linking of all major business processes such as sourcing, supply management, and contract management workflows. Strategic planning and development of all processes will result in a robust spend visibility program and help identify growth prospects. Furthermore, adoption of advanced tools such as eRFX and eAuctions will offer efficient workflow and fast turnaround systems.
What solutions SpendEdge offer to businesses
The team of procurement experts at SpendEdge provide a supply market intelligence study that offers spend analysis assignments, recommendations, and process improvement guidelines. Some of the solutions offered are listed as follows:
- Design a customized tail spend analytics framework and carry out a detailed analysis of the spend data for various categories and sub-categories
- Develop comprehensive reports that cover the major aspects including supplier base optimization opportunities, demand aggregation opportunities, and opportunities for maverick spend reduction
- Identify the risks due to the absence of long-term contracts and inappropriate sourcing practices
- Offer suggestions such as gaining a supplier specific report from the data management team and updating the buying team with more info regarding the supplier
- Recommend the client to consider bulk purchases and discounts
- Perform an internal vendor satisfaction and rationalization survey, and sign long-term contracts and target rates
Read our complete case study titled – SpendEdge’s Tail-spend Assessment Helps a Leading Pharmaceutical Company Identify Opportunities to Save Millions
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