In the world of Procurement and Purchasing, leakage is what happens when the best-laid plans of Purchasing fail to live up to monetary expectations.

Failing to achieve cost savings potential promised in a contract can undermine the status and stability of Purchasing pros.

There are four reasons for leakage, according to one expert:

• communication
• inconvenience
• fear of the unknown, and
• lack of trust.

Good news: There are three action steps you can take that’ll help seal the “leaks” and put your Purchasing plan back on track.

Where did the money go? It’s essential to have an efficient and visible system for tracking spending. The better your system for monitoring spending, the more quickly you’ll be able to react and plug the leaks.

Pat yourself on the back. Everybody loves a success story. Check the trade magazine available in your industry or service sector and offer to be interviewed. Get everyone in on the act — there’s plenty of room in the spotlight. This is key to building ownership across the company — and with the CFO, too.

Bring in your own experts. Call in a rep from each department that purchases and procures from your vendors, and give them a ride in the driver’s seat. Talking to vendors and comparing prices and contracts. When you give the head of production, for example, an inside look at how the process works and the hoops you leap through every day – you’re going to build plenty of buy-in.

Tags: CFO, procurement, purchasing