A procurement manager is writing a conformance specification for a non-core component. She thinks that if the requirements in specification are…

The specification that is produced too detailed will incur unnecessary cost because it does not allow

suppliers to use their expertise in finding the most efficient way to produce it.

'No, because higher requirements in specification, the greater bargaining power of buying organi-

sation': more detailed specifications could tighten the supplier base and potentially leave buying

organisation with fewer potential supplier. This may reduce buyer's bargaining power in negotia-tion.

'Yes, because higher requirements will help buying organisation find the best supplier': in some

circumstances, higher requirements will lead to smaller supplier base. In the worst scenario, there is

no supplier who has capability to carry out those requirements

'Yes, because optimising the specification is the only method to achieve value for money': There are

other methods to achieve cost saving and value for money, inter alia, volume concentration,

relationship restructuring, etc.

Reference: CIPS study guide page 118-119

LO 3, AC 3.1