Long Tail

The 'tail' may not represent the majority of an organisation’s expenditure report, but it often covers 80% of the suppliers, who often generate most of the corporate 'noise' about supply issues (CIPS Australia: Managing the tail)

Information about Long Tail

In procurement, the long tail theory is related to spend analysis. It puts a following spin on the Pareto 80/20 principle: approximately 80% of the spend will be covered by 20% of the suppliers and conversely 20% of the spend will be comprised of a long tail of suppliers (80%), each with progressively smaller amounts of spend. Similarly, a plot of cumulative spend versus cumulative orders will follow the same principle where 20% of the spend will be comprised by 80% of the orders (CIPS Australia: Managing the tail).

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