SPECIFICATIONS are the means with which procurement functions communicates the requirements of the organisation to the market in general. They are descriptions of user requirements and form the basis of evaluation of compliance of offers submitted by suppliers in response to request for quotations and request for proposals. It also to some extent describes the composition and type of materials that shall be used in the manufacturing process.
PURCHASING & SUPPLY NYASHA CHIZU
Specifications may also define the methods of manufacture, type of finish and packaging. Specifications are also the basis of verification and assessment at the time of delivery or receiving.
Specifications have a bearing on the overall costs that organisations pay for goods and services acquired. The material in most instances averages between half and three quarters of the cost of production. The specifications then contributes directly to the profitability and the manner in which the product or services appeal to the customers.
Many items are described using generic specifications but in some cases, the descriptions relate to specific brands.
Branding involves registering of patents and trademarks so that similar products cannot be identified using the registered name. Generic brand is a type of consumer product that lacks a widely recognised name or logo because it typically isn’t advertised. They are usually less expensive compared to brand-name products due to the lack of promotions, which can inflate the cost of a good or service. A brand is therefore a unique design, sign, symbol, words, or a combination of these, employed in creating an image that identifies a product and differentiates it from its competitors. Brands help pressured consumers in crowded and complex marketplaces by standing for certain benefits and value.
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The common pitfall in specification design is the inclusion of specific designs or signs or symbols or words that relate to a specific brand in the pretext of designing generic specifications. In the end, generic products would be disqualified at the evaluation stage because of non-compliance to specific brand-related aspects of a requirement.
This results in inflated costs of inputs at the expense of avoidance of less expensive brands or generic products.
In recent years, buyers for fear of limiting competition unnecessarily, have increasingly moved away from the use of input specifications that detail the design, signs, symbols or words that might limit the product to a specific brand. They have favoured use of output specifications. An output specification would not prescribe how the suppliers is required to achieve performance standards set out in the specification. Simply put, input specifications are prescriptive and directs the manufacturer how to produce. Output specifications differ in that they define what is to be delivered but not how it will be manufactured.
An output based specification provides an obligation to suppliers to develop products and services that meet the clients requirements. The benefit to business is that it focuses on what the deliverables are rather than how they should be delivered. This allows the supplier to produce required products with the minimum of constraints and creates the freedom for a supplier to leverage existing facilities, adapt to new technologies, products or materials giving cost and efficiency benefits to the supplier and enhancing services for the customer.
The effectiveness of the output based specifications is the removal of constraints to manufacturers by removal of all detailed specifications. It simply looks to remove unnecessary constraints, positioning the supplier as the expert and allowing them to decide the best way to do things.
Nyasha Chizu is a Fellow of the Chartered Institute of Procurement and Supply writing in his personal capacity. Feedback: nya.chizu@gmail.com Skype: Nyasha.chizu