Understanding Tail Spend

Purchasing industrial network devices or connectivity tools, companies often prioritise the focus on the big purchases that take up most of their budget. But there's a part of spending that sometimes gets overlooked, and it's called "tail spend." This is the money spent on less frequent, smaller purchases that don't get as much attention, but still play a vital role in a final project delivery.

What is Tail Spend?

Tail spend refers to the last bit of a company's spending, usually around 20% of the total purchasing budget. These are items that are bought less often and are harder to keep track of because they're not as big as other expenses. In the world of industrial networks, this could be extra cables, small parts for repairs, or even backup units.

The Challenge with Long Lead Times

Industrial network devices can sometimes have long lead times, meaning it takes a while from when you order them to when they actually arrive. If these items fall into the tail spend category, they might not be ordered until the last minute.

That can cause problems because if something has a long lead time and you need it quickly, you might end up waiting longer than expected affecting final project delivery.

Impact on Project Supply Chain

If you don't manage tail spend well, it can mess up your whole project supply chain. Imagine you're working on setting up a new network system. You've got all the big stuff ready to go, but then you realize you're missing some connectors or SFP modules that are part of your tail spend.

Because they have a long lead time, your project gets delayed. This can lead to missed deadlines and unhappy customers.

Overall Delivery Times

The overall delivery time for a project can be seriously affected by how well tail spend is managed. If you're always waiting on small parts that were ordered too late, your projects will constantly be behind schedule. It's like trying to finish a puzzle but finding out you're missing a piece – you can't complete the picture until that piece arrives.

Managing Tail Spend Effectively

To avoid these issues, it's important to pay attention to what products can fall into your projects tail spend, and how to get ahead of any problems. And how we at Industrial IT can supports you towards a final project delivery.

Understand Your Spend: Know what you're buying and how often. Keep good records so nothing slips through the cracks.

Work with us at Industrial IT: We build strong relationships with our customers with planning and scheduling to ensure you get what you need ontime.

Credit Account: Having credit with us doesn't just save you headaches with payment cards, or add hock bank transfers. It also secures your items as soon as purchasing members draw up a Purchase Order, saving valuable time getting items delivered to site, with many items delivered to your site the next working day.

Use Call Off Orders: When you understand your demand planning for one or many projects, we can also provide you Call Off Orders. By raising a Purchase Order for a bulk advanced purchase, you can call off items as you need them, sometimes even over the next 12 months, allowing us to get your items from manufacturers in preparation for you delivery. And we don't even raise you an invoice until items are dispatched.

Scheduled Orders: Don't wait until the last minute to order things with long lead times. Plan ahead to avoid delays by scheduling your delivery dates with us. We can even help with world wide shipping on your pre planned dates, taking the stress out of your supply chain needs.

By keeping an eye on tail spend and managing it smartly, companies can make sure their projects run smoothly. It's important to remember that every little part matters when it comes to building a reliable network. So, don't let those small purchases become big headaches!