INSTITUTE OF SUPPLY AND MATERIALS

MANAGEMENT (INCORPORATED BY ACT OF PARLIAMENT NO. 3 0F 1981)

MODULE 01: INTRODUCTION TO SUPPLY CHAIN AND LOGISTIC MANAGEMENT

PRESENTATION ABOUT; “SPECIFYING THE REQUIREMENT” IS ONE OF THE PRELIMINARY

FUNDAMENTAL TASKS RELATED TO THE PROCUREMENT PROCESS.

STUDENT NAME: W.V KAUSHAN NIMESH

REGISTRATION NUMBER: ADLWM/E/C/SUN/1-2023-55

CONTENT.
1. “SPECIFICATION” AND IDENTIFY THE MAIN ELEMENTS TO BE
INCORPORATED IN THE SPECIATION.
2. MEANING OF HARMONY IN PROCUREMENT.
3. IDENTIFY THE STAKEHOLDERS OF THE SELECTED PROCUREMENT
PROCESS.
4. DESCRIBE THE BENEFITS YOU CAN DERIVE FROM THE PROPER
SPECIFICATION.
5. MAIN ASPECTS RELATED TO PROCUREMENT PERFORMANCES.
6. RELATION BETWEEN “PROPER SPECIFICATION” AND PROCUREMENT
PERFORMANCES”
7. . CONCLUSION SUMMARY.
1. MEANING OF THE SPECIFICATION.
• In a procurement context, a specification can be defined as a “statement of needs requirements”. It provides a
detailed description of the goods or services a supplier is expedited to supply.it is also a record against which
suppliers can be measured.
• Need to provide adequate information to the supplier to get the right materials. Need to mention in the
requirement below the main elements.
▪ Right material (include a material description with a material number)
▪ Right Quality
▪ Right quantity (how many quantities need to receive)
▪ Right price (what price need to receive)
▪ Request location & Receiving location.
▪ Time (what time need to receive it)
2. MEANING OF HARMONY IN PROCUREMENT.
• ❖ Companies with advanced procurement functions know that there are limits to the value they can generate
by focusing purely on the price of the products and services they buy. These organizations understand that
when buyers and suppliers are willing and able to cooperate, they can often find ways to unlock significant
new sources of value that benefit them both.
Benefits
▪ Minimize lead time. ▪ Continues production.
▪ Reduce inventory holding costs. ▪ Reduce risks.
▪ Can more great value for products & services. ▪ Can improve product quality.
▪ Can make effective decisions.
▪ Stay in better relationships with stakeholders. ▪ Prevention of production delays.
▪ Accountability & Responsibility
3. IDENTIFY THE STAKEHOLDERS OF THE SELECTED
PROCUREMENT PROCESS.
❖ Procurement managers, budget owners, manufacturing, finance, and legal team members are examples of key
internal stakeholders in the procurement process. Those who contribute to the project, but they are not directly
related to the company are considered key external stakeholders.
There are two types of stakeholders.
▪ Internal stakeholders : People or groups of people are those who are involved directly with the business.
Ex: Directors , Managers , Warehouse team

▪ External Stakeholders – People or groups of people who have an interest in the organization and could either be
impacted by it or have an impact on it.
Ex: Customers, Local communities , Suppliers , Various government , Financial agencies
4. DESCRIBE THE BENEFITS YOU CAN DERIVE FROM THE
PROPER SPECIFICATION.
•❖ SPECIFICATION IS IMPORTANT BECAUSE IT ALLOWS BUYERS AND SELLERS TO UNDERSTAND EXACTLY
WHAT THEY ARE PURCHASING OR SELLING. THE SPECIFICATION ALSO AIDS IN THE IDENTIFICATION OF
POTENTIAL FAULTS WITH A PRODUCT BEFORE PURCHASE, IMPROVING THE LIKELIHOOD OF CORRECTING
ANY DIFFICULTIES BEFORE THEY BECOME SIGNIFICANT. FINALLY, SPECIFICATIONS CAN ASSIST IN
ENSURING THAT A PRODUCT FITS THE NEEDS AND EXPECTATIONS OF BOTH THE BUYER AND THE SUPPLIER.

❖ BELOW ARE THE BENEFITS OF PROPER SPECIFICATION.

▪ MAY BE NOT DELAYED SUPPLYING. (ON TIME) ▪ RECEIVING THE RIGHT CONDITION RAW
MATERIALS
▪ MINIMIZE THE 7 WASTES (TIM WOOD) ▪ PRODUCTIONS INTERRUPTION CAN BE
AVOIDED.
▪ CONTINUOUS PRODUCTION. ▪ EASY TO HANDLE STOCKS.
▪ EASY TO ISSUE MATERIALS TO PRODUCTION
5. MAIN ASPECTS RELATED TO PROCUREMENT
PERFORMANCES.
❖ Procurement performance is an important part of any company that aspires to long-term growth and
profitability. It is the process of finding, purchasing, and delivering goods and services to satisfy the demands of
the company while minimizing costs. On the other hand, high procurement performance is not always easy to
achieve because it necessitates excellent strategies, methods, and technologies.
❖ What are the main aspects of procurement performance?
1. Quality KPIs
2. Inventory KPIs
3. Delivery KPIs
4. Cost savings KPIs
6. RELATION BETWEEN PROPER SPECIFICATION AND
PROCUREMENT PERFORMANCES.
❖ A specification provides the procurement's needs. It is the foundation for all offers making it the foundation for
a contract. A specification is an important contract management document that is used to ensure that the chosen
provider delivers what is specified.
❖ Once the user sets specifications the first time, the procurement department can use the specifications in
subsequent orders, maintaining consistency. The specifications also provide uniformity in the item required at a
given time.
❖ The above matters clearly defined the Proper specification effect to enhance the procurement performance.
❖ How to impact specification for procurement and performance?
• Specifications enhance communication with Suppliers - Specifications are how you communicate your
requirements to your provider. While clear communication implies that you will receive the appropriate materials,
the contrary is true. You only receive what you request. This directly affects the quality of your goods.
7. CONCLUSION SUMMARY.

❖ Performance in procurement is critical for two reasons.

❖ The first purpose is to ensure that the company receives the best available bargains on
what it requires while also meeting its contractual responsibilities. This ensures that the
organization can stay afloat and run properly even when times are tough.

❖ The second reason procurement performance is crucial is that ensuring that the
relevant paperwork, signatures, and approvals are in place before a purchase guarantee
that everything proceeds smoothly once the purchase is made