Comprehensive tail spend approach
The WNS Procurement programme manages Merck KGaA’ s tail spend, focusing primarily on site-related categories including MRO, CapEx, site services and facilities management. The initiative targets transactions below € 100,000— a threshold that has evolved from an initial € 50,000“ in order to drive more of that tail under management,” according to Mita.
She continues:“ In areas like tail spend, the key elements that are part of best practice include spend visibility. It’ s absolutely critical to understand the spend, uncover any hidden costs and understand spend behaviours.”
Measurable business outcomes
The partnership has delivered impressive results for Merck KGaA
f Cost savings at a consistent 7-8 % annual rate f Improved cash flow of US $ 50-60m through payment term optimisation f Reduced requisition turnaround time to less than two days f Enhanced compliance with procurement policies and processes
Beyond cost savings
Mita highlights that modern procurement transformation extends far beyond cost reduction:
“ Procurement should always have an ongoing focus on total value creation. It includes cost optimisation, risk mitigation, compliance to policies, process efficiencies, reducing supplier fragmentation and even items such as payment term rationalisation and optimising delivery timelines.”
This brings procurement to the forefront of the agenda, with its extensive reach across all business functions and spend categories. Enabling collaboration ensures that both hard and soft financial benefits directly impact the bottom line. The WNS Procurement-Merck KGaA partnership exemplifies how procurement functions are evolving in response to changing business landscapes.
As Mita highlights:“ We’ ve not seen such a fast-evolving environment, especially when it comes to changes in the geopolitical and global environment, as well as the evolution of Gen AI and how to use it.”
By combining human expertise with advanced technology— what Mita calls“ AI plus HI”( human intelligence)— modern procurement teams can navigate complexity while delivering strategic value.
She concludes:“ These are all part of the overall equation that procurement can bring to the business to, as we say, to be that top value creator in the organisation.”