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advantages of specification in procurement

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advantages of specification in procurement

What are the advantages of procurement planning. function of an organization. In both cases, suppliers have more information to work with when generating their quotes. This unorganized procedure can be difficult to change and can lead to exceptions. David Ingram has written for multiple publications since 2009, including "The Houston Chronicle" and online at Business.com. In most capitalistic countries, these benefits are almost taken as read, meaning any argument is usually about the scope and procedure of public sector procurement. Numerous organizations are spooky due to the disorganization. Knowing exactly what a buyer requires, allows a supplier to more accurately match the request with specific products and materials. Procurement process if well followed gives the buyer advantage to select the best suppliers for the job 2. The disadvantages are: it is bureaucratic and it has been know to be the causes of delays in delivering products and services. For example, ideally it should be possible to fully test a product’s conformance before sign-off and … Advantages of procurement planning are: ensures that procurement cycle are followed and each person in the cycle gets to know his or her task in delivering the product, it provides time frame indicating when the procurement process should be initiated; it is also used for soliciting/lobbying for funds for donors. However, prior to release of a specification, as part of a solicitation, the buyer must be satisfied that its inclusion will result in a fair and equitable purchase. A business's procurement, or purchasing, department is responsible for sourcing and purchasing inventory while building and maintaining relationships with suppliers. The specification is equally binding on both the buying organisation and the supplier — Omissions, incorrect information or imprecision in a specification can be cited by the supplier in any dispute with the buyer. Performance specification is result-and user oriented, leaving the supplier … Describe the Unique Challenges of Strategic Resource Management for a Manufacturing Company, Traditional Competitive Procurement Processes, The Concept of Supply & Its Uses in Business, TechSoup: An Overview of the RFP Process for Nonprofits, Charities, and Libraries, BusinessDictionary.com: Request for Proposals (RFP), An Inventory Control System RFP's Ethical Standards. 5382 words (22 pages) Essay. What are the advantages & disadvantages of Bookkeeping? Procurement is central to the government service delivery system, and promotes aims which are, arguably, secondary to the primary aim of procurement such as using procurement to promote social, industrial or environmental policies (Cane, 2007). (sustainable-procurement.org; see later section). It serves as a written interpretation of that brief and by ensuring that you have fully understood the client's wishes and the assets that they require, it serves as a key check on performance criteria… Compared to conformance specification, performance specification has a number of ADVANTAGES such as; The specifications are easier to draft; The efficacy of specifications does not depend on technical knowledge of the buyer; Supplier can use their creativity to develop the products; Greater share of specification risk is borne by the supplier. Since the purpose of a specification is to translate a user's need into the delivery of goods or services, the development of specifications must be a cooperative effort between the ordering department and Procurement. An RFP contains a detailed description of the goods or services that a buyer seeks, and it allows suppliers to provide price quotes for the materials and labor required before a purchase contract is drafted. Advantages of procurement planning  are: ensures that procurement cycle are followed and each person in the cycle gets to know his or her task in delivering the product, it provides time frame indicating when the procurement process should be initiated; it is also used for soliciting/lobbying for funds for donors. © 2000-2020 Bayt.com, Inc. All Rights Reserved. Register now Specifications describe in detail the supplies and services the City seeks. Here, E-procurement is the appropriate solution as it can streamline buying and furthermore diminish the danger of exception in your purchasing procedure. Rather than requesting a general quote for printing ink, for example, a print shop might specify that it requires printing ink made from soy-based pigments. DoF # of demands Procurement Chapter 4 - Specifications 4.1 Generally.. If they are not, the supplier may meet the specification but not at all satisfy the organisation’s actual needs. He has earned a Bachelor of Arts in management from Walsh University. You're working on the procurement plan for the computer software program that? This can allow a company to more easily locate the ideal suppliers who are able to deliver exactly what they require. You are the project manager for an upcoming outdoor concert event. Public sector procurement is when public bodies choose and contract commercial companies to provide goods and services. As a small-business owner, Ingram regularly confronts modern issues in management, marketing, finance and business law. Every day, thousands of new job vacancies are listed on the award-winning platform from the region's top employers. The other advantage of the standardization is that it has a positive effect in the formation of strategic alliances between different organizations; it is quite clear that the merger of companies concerning the matters of standardization is beneficial in that the outcome of synergy can help with the reduction of costs as well as increasing profits of business. This can save both time and resources for the buyer and any potential suppliers who cannot meet the buyer's precise specifications. When undertaking procurement, value for money factors should be included in the specification and the evaluation criteria. It is important, therefore, that all expectations are captured in the specification. An assurance of client satisfaction The specification is an interpretation of the initial brief provided by your client. Requests for proposal can be as general or specific as desired. Procurement Optimization Can Lead to Significant Savings. The factors should therefore be considered at the beginning of a procurement. One of the first points of contact between a procurement employee and a potential supplier is the request for proposal. Prior to 2002, public procurement in Kenya was geared towards large and established contractors. There are additional advantages when a technical specifications document is drawn up and it forms an integral part of the procurement process and order placement. However, procurement optimization can produce a host of benefits and add tremendous value to your organization as a whole. They may include such details as required power, strength of material, test methods, and standards of acceptability and recommended practices. The importance of Specification within the procurement places. ilI hope this answers your questions. Economic operators submit both selection (qualification) information and tenders at the same time in response to the contracting authority’s advertised require-ments. Rather than requesting a quote for drywall, as another example, a building contractor might specify that it requires drywall made from at least 50 percent recycled materials. The purpose of the specification is to communicate the buyer's requirements and … This, in turn, can provide greater insight for your purchasing decisions. Specifying the required composition of materials or goods is a highly precise way to to obtain more-specific quotes from suppliers. You can view samples of our professional work here. For goods that are made to order, specifying the required composition can help suppliers to determine their exact costs, allowing them to calculate their prices more precisely. Performance Specification—A type of specification in which the goods and/or services are described in terms of required performance. cluding the specification and contract, to all economic operators that request to participate. Specifying your required composition in requests for proposal can help to narrow the field of potential suppliers quickly. Terms of Use - The factors and determinants of procurement effectiveness can be de-rived from the objectives and means of the corporate and procurement strategies. You're working on the procurement plan for the computer software program? Procurement Strategies: Advantages and Disadvantages. Procurement function should be INVOLVED as one of the function in the preparation of the specification of the items to be ordered, and not to leave marketing or engineering people to decide on the specification and procurement to proceed on other steps like sourcing. Get Fresh Updates On your job applications, and stay connected. Design and Build is a way to fast track construction and the contractor often should dictate a fixed cost or a guaranteed maximum price that offers certainty to the client. 13th Aug 2018 Construction Reference this Disclaimer: This work has been submitted by a university student. 1. There are so much advantage for procurement, but this a few of them. From the procurement perspective, the purpose of specifying requirements is to provide the information that the supplier requires in order to reliably meet the organisation’s expectations. Bayt.com is the leading job site in the Middle East and North Africa, connecting job seekers with employers looking to hire. When sending RFPs, specifying the exact composition of the goods a buyer seeks can provide a range of advantages to both the buyer and potential suppliers. As a recent publication frames it, the shift towards performance-based Traditional procurement has focused upon value for money considerations. Again, a detailed discus-sion is beyond the scope of this article, but this author hopes to stimulate further dis-cussion on the topic of standards within the public procurement process. Procurement serves as the primary activity involved in developing specifications for items purchased under indefinite quantity term contracts and definite quantity scheduled purchases. The planning for procurement though depends on a number of factors which define a procurement plan for present and future needs. Overview of procurement need specification and the organisation of supply chain processes to fulfil customers' needs in South Africa July 2013 Corporate Board: Role 9(2):12-21 Specifying Composition in Procurement Requests for proposal can be as general or specific as desired. to join your professional community. Specification is necessary to specify the equipment tools and plants to be engaged for a work and thus enables to procure them beforehand. Public Procurement Practice SPECIFICATIONS Element 1.2a: Advantages of performance specifications n Provide opportunity for innovation; allow offerors to put forth unique solutions to defined needs n Allow end user to benefit from the latest products and technologies n Corrective action may be applied if service levels are not achieved Element 1.2b: Disadvantages of performance specifications You are the project manager for an upcoming outdoor concert event. The main advantages are reduced costs and the ability to benefit from specialist expertise. Advantages It throws the responsibility for a satisfactory product back to the seller. The ordering school/department has the authority and responsibility for specifications. Procurement is often a misunderstood and disregarded (unfortunately!) The duty of Procurement to promote both product and price competition requires that specifications be as non-restrictive as practicable, consistent with satisfying … It can also be advantageous to those suppliers who can meet the specifications, because it allows them to stand out from their competitors. The main objective of the thesis was to create a procurement effectiveness reporting tool that the organisation could start using in practise. The necessity of specification is to verify and check the strength of materials for a work involved in a project. The more specific a request, the less likely each supplier is to be able to fulfill it. The purchasing function typically acts as the interface between the customer (internal or external) and suppliers. The advantages of design and build tend to counter the disadvantages of traditional contracting procurement methods. accessibility, safety, comfort, travel time, sustainability evenness, friction, noise reduction bearing capacity, strength, durability resistance to fatigue and permanent deformation, stiffness, durability, thickness material spec's, aggregate quality, grading, binder content, void content, binder characteristics etc. or log in In this regard, identified as one major tool to improve public buying has been the employment of performance-based specifications (PBS) in the early stages of the procurement process. procurement strategies that would provide a basis for effectiveness report-ing. Organisations must comply with the Sustainable Procurement Duty set out in the Procurement Reform (Scotland) Act 2014. take into account accessibility criteria for persons with disabilities. the procurement process to maintain cer-tain levels of consistency and hence, quality and overall value. When you take the time to specify the exact composition of materials you seek, it can help potential suppliers to understand your procurement needs and objectives more clearly. Or you may design your specification for all users, except in justified cases, including a conformity assessment e.g. What are the advantages of Financial Planning? Businesses around the world hire top procurement companies in an effort to perfect their procurement function and ensure efficiency in all related functions. This can be significantly lower when the length of a specification is short and the time taken in its preparation is reduced. Specifying the exact composition of materials in your order can help potential suppliers to provide more accurate and detailed price quotes. Filed Under Blog . 4. Such organizations struggle to manage purchases and place order according to the schedule. A rule of evidence is that words are construed against the party … This is not an example of the work produced by our Essay Writing Service. The aim and challenge of sustainable procurement is to integrate environmental and social considerations into the procurement process, with the goal of reducing adverse impacts upon health, social conditions and the environment, thereby saving valuable costs for public sector organizations and the community at large. The size of staff necessary to do this would be prohibitive. Privacy Statement - Dealing with Advantage (2) Natural World Products v Arc 21 [2007] •Bent over backwards to be fair to others •And in so doing was unfair to the advantaged bidder Allpay Limited v NI Housing Executive [2015] •Not illegitimate for a bidder to use its advantage in the market for its own benefit in a procurement. The more specific the details of an RFP, the greater the advantages that can be realized.

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