“It was difficult in the beginning because everyone was calling it ‘low value spend’ and I said, ‘No, we’ve got to stop that because low value automatically means it doesn’t have any meaning for anyone, they can just ignore it.’ By calling it tail spend, it got a little more attention and we were able to get the traction that we wanted and build momentum. That was really important.” – Tom Cicale
Despite the fact that the need to manage tail spend is hardly a new idea in procurement, it continues to be one of the greatest challenges we face. Tail spend is messy, risky, hard to analyze, and – if you take the wrong approach – very costly to address.
Merck was faced with a huge, global tail spend management problem, but they refused to let it fester or get the best of them. Starting with a U.S.-based pilot in their life science division, they partnered with WNS Denali to get a grip on their tail spend without alienating the business or breaking the bank.
Tom Cicale is the VP of Procurement for Merck KGaA, where he is responsible for global plant services consisting of MRO, CAPEX/OPEX, site services, utilities and logistics, and Sameer Sharma is a client engagement leader in WNS Denali’s delivery organization. They have worked together to design and implement a truly unique tail spend management program.
In this podcast, which is based on an AOP Live session that one attendee described as “the most impactful webinar I have ever been on in my entire career,” Tom and Sameer candidly answer questions such as:
- How do you measure the impact and success of your tail spend program in such a way that procurement showed positive ROI and secured finance’s validation for your numbers?
- Did Merck’s global footprint (and complex technology landscape) present a problem in the wider program rollout and, if so, how did you overcome it?
- If you had to do something differently, what would it be?