Many orders, little spend, too much time
Tail spend, or the long tail, is hundreds of small orders to suppliers you rarely buy from again. Each one needs quotes, supplier onboarding, approval and follow-up.
It is work that doesn't move results, yet it ties up your team and delays the operation waiting for the spare part.
What tail spend management is
In almost every company, most purchase orders account for a small share of spend: spare parts, PPE, industrial hardware, supplies and one-off services. That is tail spend. Because each order is small, it rarely goes to tender. In a large company, every new supplier must also go through accreditation, which can take weeks, and the purchasing team spends many man-hours on low-value orders the operation needs resolved fast.
Managing the tail, or tail spend management, brings order to that volume: one channel to request, compared quotes, one purchase order per request, follow-up through delivery and a spend report. AROLICO does this work as an outsourced procurement service in Chile.
Who it is for
For procurement, purchasing and supply chain teams at mid-sized and large companies in mining, energy, construction, manufacturing and services that need their low-value purchases handled without adding headcount or suppliers to the vendor master.
Low-value purchasing in one channel
We source and buy
We find suppliers, compare quotes and issue the order once you approve.
One point of contact
Your team deals with AROLICO. We manage the suppliers.
Follow-up through delivery
We confirm dates with the supplier and alert you before any delay.
Spend visibility
A monthly report of your tail spend by category and supplier.
Getting started is simple
Assessment
We review your recent purchase orders and define which share is worth handing over.
Decision and onboarding
You decide to proceed, we sign the framework agreement and AROLICO is set up as your supplier.
Operation
Your team sends requests. We quote, buy and deliver.
Lead times committed by contract
We don't promise a savings percentage before we know your operation. What we do sign are the response times.
On time, or that order is free of chargePut numbers on your tail spend
Three calculators to size what your tail spend costs today and what you recover by managing it.
Tail spend guides
- Tail spend: low value, high workloadWhere its real cost lies and how to take it out of the process without losing control.
- Urgent purchases: how to issue the PO the same daySeven practices to stop waiting weeks for a spare part.
- How to reduce your supplier masterSix steps to clean it up and keep it from growing back.
- Procurement outsourcing vs. MRO distributorTwo models for low-value purchasing, and when each one fits.
- Procurement BPO vs. AROLICOWho buys, in whose name, and how many suppliers end up in your vendor master.
Frequently asked questions
What procurement managers ask us before getting started.
Have another question? Let's talk
What is tail spend?
It is the long tail of a company's purchasing: low-value, high-frequency purchases that never go through a strategic process. Spare parts, consumables, PPE, industrial hardware and one-off services. They are most of your purchase orders and a small share of spend. Tail spend management gives them a single channel, verified suppliers, one purchase order per request and a full audit trail.
How is this different from procurement outsourcing or a distributor?
A distributor sells its own catalogue at its own margin. AROLICO has no catalogue: we quote with several suppliers for each request, present the comparison and buy the option you approve. It is purchasing outsourcing limited to the tail, with a purchasing mandate per request; strategic categories stay with your team.
Is AROLICO a platform or a marketplace?
No. We don't ask your team to buy on a platform. We buy for you: we source quotes, present the comparison, issue the order once you approve it and follow it through to delivery.
Do we have to accredit every supplier?
No. You accredit AROLICO once. Tail suppliers are accredited in our vendor master, with no paperwork or man-hours from your procurement, HSE, legal or treasury teams.
What do you buy, and what is out of scope?
We handle MRO and consumables, technical spare parts, third-party services, facility services, events and trade fairs, and early-stage engineering to specify the purchase. Out of scope: permitting (building permits, municipal fees, professional sign-offs and municipal filings), signed detailed engineering, staffing, explosives and controlled substances, and energy and commodities.
How much can we save?
It depends on your starting point and your category mix, so be wary of anyone quoting a fixed percentage before seeing your data. We measure it in the diagnostic. The calculators on this site use editable assumptions, not client results. What we do sign from day one are the lead times.
What happens if you miss a deadline?
If we don't issue the order within the committed time, that order is free of charge. It comes off the monthly invoice automatically, with no letters or negotiation.
Do you handle urgent requests?
Yes. If you flag a request as urgent, we issue the order the same business day, with a surcharge agreed in the contract.
Do we need to replace our ERP?
No. AROLICO enters your systems as one more supplier. You receive one consolidated electronic invoice per month, reconciled order by order, which your accounting team processes like any other.
How do we get started?
With a diagnostic of your tail spend. You send us an extract of your purchase orders under CLP 5M from the last 12 months; we classify it by category, supplier and lead time, and show you which part makes sense to hand over.
Let's talk about your tail spend
In one meeting we show you how the service would work with your operation.