The 1,027 suppliers nobody calls
Why the rest behind the 20% isn't unimportant, just overlooked
Only 4% of companies actively manage most of their tail spend. The rest just 'runs along,' and in the fourth quarter, that turns into an opportunity nobody captures.
There's a moment I've lived through more times than I can count in 25 years, in almost every spend analysis. The spend cube is finished, the Pareto curve is up on the wall, and someone in the room says: "Let's focus on the top 20%." Everyone nods, and rightly so. Then everything below the line gets hidden. It stays hidden until the next spend analysis.
Take a typical industrial company with €500 million in external spend and 1,284 active suppliers. Roughly 20% of them, 257, are actively managed: negotiated, tendered, evaluated. That leaves 1,027 suppliers, together worth about €100 million. (This is a model calculation, not a real customer figure. Compare it with your own vendor list.)
Tail spend typically accounts for around 20% of a company's spend, spread across 80% of its suppliers. Only 4% of companies actively manage most of it. (Source: The Hackett Group, Tail Spend Management Study 2025)
Even looking at total volume, the gap holds up. On average, around 71% of company spend is under active management today (the highest figure in 20 years), and yet nearly three out of every ten euros still move without active procurement oversight. That's also a 9-point gap between the textbook target state ("we manage 20% of suppliers, covering 80% of spend") and the reality of what's genuinely under active management. Every additional dollar brought under management yields 6 to 12% in savings in the first contract period. (Source: Ardent Partners, Procurement Metrics That Matter 2025)
The problem isn't that these suppliers are unimportant. The problem is that often nobody knows which of them actually are. The 1,027 might include the supplier for a component nobody flagged as single-source: the one part that stops a production line if it's missing. It might be the service provider who's been billing day rates for four years with no framework contract. Or eleven suppliers for the same consumable across five sites, at eleven different prices. "Long tail" isn't a category label. It's a catch-all term for "not yet looked at."
In fairness, one caveat is worth making. Not every one of the 1,027 needs the full toolkit of strategic procurement. When you're talking about 1,000 ballpoint pens, a should-cost analysis isn't diligence. It's waste. Whether the last percentage point in the long tail deserves every available lever is a question of impact, not just capacity. That's exactly why sorting matters: only once you know where the ballpoint pens are, and where a single-source supplier or spend volume still carries real savings leverage, can you decide where depth is worth it.
Two topics, though, apply regardless of spend size: compliance and sustainability. Supply chain due diligence, sanctions screening, and emissions data, for example, apply just as much to the supplier with €8,000 in annual revenue as to the one with €8 million. Here, active oversight of even the smallest suppliers isn't optional. It's mandatory.
Why this gets expensive right now:
- Notice periods. Many framework contracts auto-renew at year-end. With a three-month notice period, September 30 is the last day to act (twelve days from now).
- Price increase letters. They arrive between October and December. Top suppliers get negotiated with; for the 1,027, the increase often just gets accepted, or someone makes a single attempt to push back with a form letter.
- 2027 budget planning. Savings targets get set based on what was touched last year. The €100 million doesn't show up there as potential. It shows up as fixed cost.
Do the math yourself: even if only half of that €100 million offers a real lever, 6 to 12% savings puts €3 to €6 million on the table. That's the savings target of an entire category team.
I've essentially seen three responses to this challenge:
- A procurement policy requiring a minimum number of quotes. I think it curbs sprawl on new awards. The existing base is usually left untouched.
- A catalog or ordering platform. I think it makes ordering in the long tail easier, but not negotiating it.
- An annual long-tail optimization project, often with outside support. I think it delivers a clean snapshot. Twelve months later, the list is unsorted again.
What I haven't seen is a procurement function that systematically sorts the 1,027 and then deliberately decides: full depth here, bundling there, compliance-only over there. Not because nobody wanted it. Just sorting them would cost person-years no budget allows for. So everyone agreed it wasn't important. After all, Pareto is everyone's go-to yardstick. The more honest answer: it simply wasn't affordable until now.
This week's question for my network of procurement experts: What percentage of your spend is genuinely under active management? Are you above or below that 71%?
I'm interested in your honest estimate (a range works too), and I welcome every comment! If you don't want to miss the Elevatry video and upcoming Friday notes, you can sign up for free here.
— Heiko, founder of Elevatry. 25 years of strategic procurement. My next note will be published on September 25: Why the same project is re-tendered two years later.
