Prof. Beverly Williams
February 27, 2012
All companies have some type of supply need and must identify the specifications of the needs to be efficient. Supply strategies are best aligned with corporate strategies when requirements and procurability are determined, risks assessed, and suppliers are identified. Supply needs and specifications, early supplier involvement, and strategic requirements will be discussed in this paper.
It is preferable to separate need identification and defining commercial equivalents into two separate stages because a company must first know what it needs and why it is needed. The type or category of need should then be ...view middle of the document...
By supply and supplier being involved early in the development process, it can establish if the need that is specified will be procurable and represents good value. The organization’s needs should then be prioritized to figure out what is required and what is merely desired. Another important favorable factor to consider with effective early supply involvement is the ability to choose more preferable options based on the circumstances of the organization’s priority of needs and what the market can supply.
A disadvantage with specifying by performance is difficulty finding a supplier to respond with a bid or obtaining comparable quotes from two or more competitors. Also, suppliers will furnish products with a maximum performance based on the minimum performance specifications set forth by the buyer. There may be difficulty identifying the basic function an item must perform. It may also be more costly to the buyer specifying by performance because suppliers may add risk allowance and testing in the end price. There is a risk that the specifications identified will not be or perform better than what is already supplied on the market. Products that use specifications are not readily available and immediately procurable. When specifying by performance there are some advantages, as well as, disadvantages involved. An advantage to specifying by performance is the supplier designates how the product or service will be most suitable for use. Buyers transfer the responsibility of adaptability of the item’s intended use to the seller or supplier when specifications are made by performance.
A supply professional can determine if a certain requirement is strategic by being creative and assessing how the need aligns...