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What makes an effective specification in procurement

Getting it right the first time in procurement is very important if value for money goals should be accomplished. Make one mistake with your specification and you might as well have burn your hard cash  or simply hand it over to a thief. It is amazing how many naive buyers will engage in procurement activities ignorance of the characteristics of an effective specification. In this article I will explore some of the characteristics of an effective specification in procurement activities

To start off, it will be best I explain what specification is and the different types of specifications that may exist in procurement activities. This will be particularly useful for those who are new to the subject and hopefully help better understanding of the concepts.

A specification is a statement of the buying organisation's requirements that will form part of the invitation to tender package for  potential suppliers to make an offer. A specification is therefore the key documentation that forms the heart of the engagement between the buying organisation and the supplying organisation, interested in the potential business opportunity. In this regards, if a specification is not effectively developed, then there is a serious risk of  the buying organisation  attracting  the wrong types of suppliers, and with serious procurement risk in the supply chain.

So what makes an effect specification for the purpose of procurement. An effective specification must be:

·        Clear and unambiguous as to what is required. This simply means it must communicate correctly what it is the buying organisation is seeking potential suppliers to offer it with. Unclear specification will attract wrong bids and in the worst case scenario, the wrong suppliers will be awarded with contracts.

 

·        Concise and not overly lengthy that it causes confusion in the minds of suppliers. The more punchy and to the point a specification is the less preparation time and costs it will take to develop it. This means procurement  resources will be efficiently utilised on strategic and high risk projects.

·        Comprehensive covering all salient points of the requirement at the level of technicality and functionality. This is so important for complex purchasing activities where drawings and chemical specification may be called upon, as well as some element of functional specification not to mention brand specification for compatibility with existing items. The procurement team can work alongside stakeholders of the procured items to ensure that all aspects of business needs are covered in the development of the specification to guarantee effectiveness.

·        Value added focus which simply means that only requirements that add benefits to the organisation is included in the spec. Excess specification that adds costs with no corresponding benefits is to be eliminated as far as possible.

·        Compliant with all relevant policies and standards in the country of operation as well as standards pertaining to health and safety, best practice human resource management, environmental impact and dare I say international standards.

For more free resources on procurement and financial management matters, visit our website on http://www.businessservicessupport.com

 

Sheila Elliott is a qualified accountant with a masters in business administration and diploma in procurement. Sheila is a Senior Consultant and Trainer of Business Services Support Limited

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