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To maximize your overall profits you need to minimize the potential mistakes in the purchasing process.

I have always believed an experienced procurement officer can greatly contribute to the profits and bottom line for every public and private sector company.

As a consultant in the field of procurement for decades, the ability for purchasing to contribute to savings on major projects can be the difference between making and losing money on the completion of the job.

In my opinion, no amount of strategic planning and no amount of auditing and control can eliminate the risk of loss, or general mistakes that can be made in the procurement process.

Mistakes will inevitably happen and so too will outright misconduct. The procurement process enjoys no special immunity from error or deliberate wrongdoing. When problems arise, the best long-term solution is often to accept that this is the case and move on.

Rather than seeking to allocate blame, it is very often better to identify cause and see to it that steps are taken to prevent similar problems arising in the future.

When mistakes of particularly severe magnitude are chronic, a change in personnel may be necessary in order to maintain the integrity of the system, but as with all other aspects of the procurement process a balanced approach must be followed.

There is no reason to assume every error demands sacking. Even in the public sector, a procurement system (and the political system that blocks it) should be sufficiently mature to accept the fact mistakes arise.

The goal of the system should be to minimize the chance of mistakes (or wrongdoing) and to position itself so that it can respond effectively to the damage arising from mistakes. A culture of blame fosters a culture of denial.

Diversion of resources to seeking a scapegoat (or defending oneself from the risk of becoming a scapegoat) stymies the effort to correct problems.

Skillfully managed, any organization can use the problems that it encounters as an opportunity to improve itself and emerge stronger from the experience.

In the procurement world, as in many other areas of business, what is most necessary when problems arise is the taking of appropriate corrective action to prevent those problems from occurring again.

The most powerful weapon that wrongdoing employees have in their arsenal is not a knife or gun, but the refusal of employers to accept that a problem exists and to devote sufficient resources to its correction.

One of the deficiencies of a culture of blame is that it does not deal with a problem, but merely fixes on finding a scapegoat. Where a system has broken down, it is not sufficient to rely on former methods.

If existing controls did not work the first time, there is no reason to believe they will work the second time. The starting presumption must be that they are deficient and the emphasis should then be placed upon finding cost-effective methods of preventing repetition.

Useless poor procedures have been identified and weeded out, those of limited value must be similarly identified and shored up and new procedures must be worked out to deal with previously unanticipated problems. In a sense that reducing risk leads to cost savings in the long-term, municipalities must be able to learn from mistakes.

It is also advisable to avoid total reliance upon a top-down solution. There are benefits in taking advice from those who are at the coalface, with respect to the best method of responding to a problem.

In particular, junior employees are often better able to identify potential problem areas due to their familiarity with the day-to-day administrative process.

They may also serve as a source of constructive advice as to the practicality of proposed solutions.

Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com. Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.