Question 3

Explanation

Performance specification is a document that buyer can use to define their needs and communicate with the supplier. Performance specification normally include the functions, outputs and the outcomes of the product or service instead of the input and how the product or service should be produced or delivered. When the buyer uses this type of specification, the supplier would have the freedom over the method of production and delivery.

The advantages of performance specification may include:

• Enhance the innovation of the supplier and buyer may get the opportunity to get optimal product or service. By focusing on the desired results rather than the prescribed methods, performance specification encourages the supplier to use their creativity and expertise to find the best solution for the buyer’s needs. This can lead to improved quality, efficiency, and customer satisfaction. For example, a buyer who wants to install a water treatment system can use performance specification to define the water quality standards and let the supplier decide how to achieve them 1.

• Reduce the time to develop the specification because the buyer can utilize the supplier’s expertise. Performance specification can save time and resources for both parties by avoiding unnecessary details and allowing flexibility in design and implementation. The buyer does not need to specify every aspect of the product or service, but only the essential requirements and criteria. The supplier can then use their knowledge and experience to propose the most suitable solution for the buyer’s needs. For example, a buyer who wants to buy new computers for a school can use performance specification to define the minimum specifications and features of the computers and let the supplier offer different options.

However, performance specification is not suitable for every purchase. There are some circumstances where conformance specification, which defines the exact requirements and standards for the product or service, is a better option. For example:

• The buyer already has a standard or specification for the product or service that they want to follow, and any deviation from it would make the product or service unfit for their use. For instance, if the buyer needs to buy a spare part for an existing machine, they would need to use conformance specification to ensure compatibility and functionality.

• The product or service is a key component or material for the buyer’s core business, and the buyer wants to have more control over the quality and performance of the product or service. Using performance specification would give more freedom and flexibility to the supplier, which might compromise the buyer’s quality standards and expectations. For example, if the buyer is a pharmaceutical company that needs to buy active ingredients for their drugs, they would need to use conformance specification to ensure safety and efficacy.

• The buyer needs to purchase a product or service that fits into an existing system or process, and any variation from it would cause problems or inefficiencies. Using performance specification would allow the supplier to propose different solutions that might not be compatible or consistent with the buyer’s system or process. For example, if the buyer is a school that needs to buy new computers for its classrooms and labs, they would need to use conformance specification to ensure interoperability and uniformity.