1 chapter 8 the purchase specification an overall view

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Chapter 8The Purchase Specification

An Overall View

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Purchase Specification

Product specification -- description of characteristics in a product to fill needs. Includes only information of product.

Purchase specification -- also includes services required from suppliers.

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Why Have Specs?

Create quality and cost control standards Help avoid misunderstandings Can be used as a training device Assist in the bid process

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Who Decides What to Include on a Spec?

Owner or manager Buyer User Some combination of the three

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What is Included on a Spec?

Performance requirement

Exact name Packer’s name Grade Size Trim Package size

Type of package Preservation or

processing Point of origin Packaging

procedure Ripeness Form Color

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What is Included on a Spec? Cont.

Trade association standards

Approved substitutes Expiration date Chemical standards Inspection procedure

Cost and quantity limitations

General instructions

Specific instructions to bidders

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What Influences the Spec?

Goals and policies Time and money available Production systems Storage facilities Skill levels of employees Menu and prices Service style

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Who Writes the Spec?

Company personnel Industry publications Hire an expert Buyer and supplier can work together

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Potential Problems with Specs

Unreasonable requirements Inadvertent discrimination Too high of quality standards Broad grades Static information Employees expertise in understanding

information

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Problems Associated With bid Buying

Lowball Inequality among bidders Tight specifications Redundant favoritism Delivery schedules

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Measures of Quality

Federal government grades Packers’ brands

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Copyright ©2008 John Wiley & Sons, Inc.