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What we want

When purchasing any item there is a need to specify exactly what it is that is required. Whether consciously or subconsciously all purchases are made against a specification. Specifications are usually comprised of the core attributes describing Quality, Cost and Delivery.

  • Quality covers such issues as the ability of a product to satisfy the customers’ expectations, the products performance, any special features of the product, its reliability and serviceability.

  • Cost should be thought of not only in terms of the price paid but the cost of acquiring the goods or services, for example delivery charges, and the costs of ownership, for example the cost of maintenance.

  • Delivery can be thought of in terms of the time it takes for an item to be delivered, the responsiveness of a supplier for example to customer queries or the responsiveness of a supplier to meet a change in customer requirements.

In addition to these core attributes there may be other values held by the buyer, that are not directly associated with the deliverable features of the goods or services, for instance considerations of CSR (Corporate Social Responsibility) e.g. Fairtrade & ethical sourcing.

The specification can be used to identify the supplier market segment that best matches our needs and values. For instance, we may decide to make a weekly visit to the supermarket for our food needs, driven by a one-stop-shopping experience and perhaps price being some key elements of our buying specification. However, we may choose to shop locally if we have an unexpected day of good weather and decide to have a barbecue. In this instance the convenience of shopping locally for a few items or a perceived view of higher quality food or even a tailored service to produce individually created food may lead to us engaging with a different segment of the food supply market.

Additionally service offerings around core products and services are leading to further segmentation of the supply market. For example, you may have the choice to have your new kitchen appliance delivered the next day but have to install it yourself or you may be prepared to wait for a week and have it installed as part of the service.

The service from online retailer Amazon that offers to return faulty goods and replacement items are processed upon Amazon being notified of the issue. Amazon gives the customer up to one month to return the faulty item. Other internet or High Street suppliers may insist that the item is returned first and the fault evaluated before supplying a replacement. Both of these are examples of where there are different segments of the supply market differentiated through value added services.

It is important to realise that, when developing the specification, some elements of it will be more important than others as, when making the decision to purchase, compromises may have to be made against this specification. Probably the compromise made most often is the one between cost and quality. For example, in the 2013 UK horsemeat scandal generally these items were priced low giving an indication perhaps that they were not of premium quality. Anyone purchasing these items may have considered that price was of greater importance than quality.

Please watch the video below, from the UK’s Channel 4 news bulletin, as an example of this cost-versus-quality dilemma (some discretion is advised due to portrayal of raw meat handling):

“As the horsemeat scandal widens [February, 2013], police get involved, and the government launches “unprecedented levels” of food testing, Business Correspondent Sarah Smith examines what has gone wrong?”

YouTube: Horsemeat scandal: how safe is your food? YouTube: Horsemeat scandal: how safe is your food?

Talking point

  • How do our values influence the specification?

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This article is from the free online course:

Supply Chains in Practice: How Things Get to You

The University of Warwick

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