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Purchase specification

By Anonymous - Posted on 07 January 2012

Purchase specification is a detailed description of the measurable characteristics desired in an item to be purchased, such as quality, size, weight, performance parameters, safety requirements, etc.

The first concern of purchasing—what to buy—is not necessarily a simple decision. For example, someone deciding to buy a car should consider how the car will be used, how often, how much one is willing to pay, and so on. Only then can an individual specify the type of car needed to make the “best buy.” In purchasing an item or a service from a supplier, several factors are included in the package bought. These must be considered when specifications are being developed and can be divided into three broad categories:

Quantity requirements: Market demand first determines the quantities needed. The quantity is important because it will be a factor in the way the product is designed, specified, and manufactured. For example, if the demand was for only one item, it would be designed to be made at least cost, or a suitable standard item would be selected. However, if the demand were for several thousand, the item would be designed to take advantage of economies of scale, thus satisfying the functional needs at a better price

Price requirements: The price specification represents the economic value that the buyer puts on the item—the amount the individual is willing to pay. If the item is to be sold at a low price, the manufacturer will not want to pay a high price for a component part. The economic value placed on the item must relate to the use of the item and its anticipated selling price.

Functional requirements: Functional specifications are concerned with the end use of the item and what the item is expected to do. By their very nature, functional specifications are the most important of all categories and govern the others.

Functional specifications and Quality

In a sense, functional specifications are the most difficult to define. To be successful, they must satisfy the real need or purpose of an item. In many cases, the real need has both practical and aesthetic elements to it. A coat is meant to keep one warm, but under what circumstances does it do so and what other functions is it expected to perform? How cold must it get before one needs a coat? On what occasions will it be worn? Is it for working or dress wear? What color and style should it be? What emotional needs is it expected to fill? In the same way, we can ask what practical and aesthetic needs a door handle or side-view mirror on a car is expected to satisfy.

There are many definitions of quality, but they all center on the idea of user satisfaction. On this basis, it can be said that an item has the required quality if it satisfies the needs of the user.

There are four phases to providing user satisfaction:
Quality and product planning.
Quality and product design.
Quality and manufacturing.
Quality and use.

Product planning is involved with decisions about which products and services a company is to market. It must decide the market segment to be served, the product features and quality level expected by that market, the price, and the expected sales volume. The basic quality level is thus specified by senior management according to their understanding of the needs and wants of the marketplace. The success of the product depends on how well they do this.

The result of the firm’s market studies is a general specification of the product outlining the expected performance. appearance. price, and sales volume of the product. It is then the job of the product designer to build into the design of the product the quality level described in the general specification. If this is not properly done, the product may not be successful in the marketplace.

For manufactured products, it is the responsibility of manufacturing, as a minimum, to meet the specifications laid down by the product designer. If the item is bought, it is purchasing responsibility to make sure the supplier can provide the required quality level. For purchasing and manufacturing, quality means conforming to specifications or requirements.

To the final user, quality is related to his or her expectation of how the product should perform. Customers do not care why a product or service is defective. They expect satisfaction. If the product is what the customer wants, well designed, well made, and well serviced, the quality is satisfactory.

Functional specifications should define the quality level needed. They should describe all those characteristics of a product determined by its final use. Function, quantity, service, and price are interrelated. It is difficult to specify one without consideration of the others, indeed, the final specification is a compromise of them all, and the successful specification is the best combination of the lot. However, functional specifications ultimately are the ones that drive the others. If the product does not perform adequately for the price, it will not sell.

Value analysis is an approach to improving the value of a product or process by understanding its constituent components and their associated costs. It then seeks to find improvements to the components by either reducing their cost or increasing the value of the functions.

Value engineering (VE) is a systematic method to improve the "value" of goods or products and services by using an examination of function. Value, as defined, is the ratio of function to cost. Value can therefore be increased by either improving the function or reducing the cost. It is a primary tenet of value engineering that basic functions be preserved and not be reduced as a consequence of pursuing value improvements

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