The Purchase Specification: An Overall View

The Purchase Specification:An Overall View8YOU SHOULD BE ABLE TO:Give examples of information that should be included on purchase specifications.Create a purchase specification.Identify factors that influence the information included on purchase specifications.YOU SHOULD BE ABLE TO (CONT.):Explain the potential problems related to purchase specifications.Describe how quality is measured, including the use of government grades and packers’ brands.SPECIFICATIONSProduct specification -- description of characteristics in a product to fill needs. Includes only information of product.Purchase specification – includes product spec information and also includes services required from suppliers. WHY HAVE SPECS?Create quality and cost control standardsHelp avoid misunderstandingsCan be used as a training deviceAssist in the bid processWHO DECIDES WHAT TO INCLUDE ON A SPEC?Owner or managerBuyerUserSome combination of the threeWhat May be Included on a Spec?Performance requirementExact namePacker’s nameGradeSizeTrimPackage sizeType of packagePreservation or processingPoint of originPackaging procedureRipenessFormColorWhat May be Included on a Spec? (cont.)Trade association standardsApproved substitutesExpiration dateChemical standardsInspection procedureCost and quantity limitationsGeneral instructionsSpecific instructions to biddersWHAT INFLUENCES THE SPEC?Goals and policiesTime and money availableProduction systemsStorage facilitiesSkill levels of employeesMenu and pricesService styleWHO WRITES THE SPEC?Company personnelIndustry publicationsHire an expertBuyer and supplier can work togetherPOTENTIAL PROBLEMS WITH SPECSUnreasonable requirementsInadvertent discriminationToo high of quality standardsBroad gradesNot flexibleEmployees expertise in understanding informationPROBLEMS ASSOCIATED WITH BID BUYINGLowball bidsInequality among biddersRestrictive specificationsRedundant favoritismDelivery schedulesQUALITYMust determine optimal quality to include on speckWho makes quality decision?Ultimately the customerOwner/managers have more leeway with supplies not encountered by customersMEASURES OF QUALITYFederal government gradesAP pricesPackers’ brandsSamplesEndorsementsTrade associationsCompany’s specificationsIS THE QUALITY AVAILABLE?Sometimes the desired quality is not available, e.g., low-quality apples for applesauceDesired quality may only be available from one supplierTHE BUYER’S MAJOR ROLEMaintain quality standards often set by others