CHAPTER SIX

6. MATERIALS SPECIFICATION AND STANDARDIZATION

What is materials specification?

The purchase description is the heart of the procurement. Whether or not a

purchase order or contract will b performed to the satisfaction of the buying
organization frequently is determined at the time the purchase description is
selected or written specifying quality requirement.
Quality definition
Quality is defined as “fitness; merit; excellence”. In industrial and
institutional purchasing quality has an entirely different meaning. Here
quality is related to suitability and cost (not price), rather than intrinsic
excellence. The best quality is that can be purchased at the lowest cost to
fulfill the need or satisfy the intended function for which the material is
being purchased. Quality has no meaning in purchasing except as it is
related to function and ultimate cost. This chapter discusses the important
aspects of written description of quality and their impact on good
purchasing.
The purpose of specification
 Communicate to the buyer in the purchasing dep’t what to buy
 Communicate to prospective suppliers what is required
 Serve as the heart of the resulting purchase order
 Establish the standard against which inspection tests and quality
checks are made
Purchase descriptions directly affect the quality and performance of the item
purchased and price paid. For example, unnecessary tight tolerances result in
needlessly high production costs and prices for purchased materials.

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Performance specification that describe the function to be performed without
specifying the materials and procedures to be used; it allows potential
suppliers to propose alternative approaches to satisfying the requirement.
When purchasing with performance specification, the buyers benefits
through a competition concepts, frequently with significant saving. Many
firms pay a fair and reasonable price for materials; however, they do not
always pay the right price. The right price is paid only when the right
materials are specified and after all reasonable efforts to improve the
purchase descriptions have been exhausted.
The followings are some of the things that must be found in specification
contents Identification title, Issue number, Contents list, The reason for
writing the specification, Introduction, Scope, Definitions of terms,
Requirements/ elements characteristic, performance, life& reliability of
materials, Index, References.
Purchase description is fall in to two broad categories; detailed specification
and other specifications
Detailed specifications
Specifications are the most detailed method of describing requirements.
Various types of design specifications are the detailed description of the
materials, part and components to be used in making a product. Hence, they
are the description that tells the seller exactly what the buyers want to
purchase. Because they impact the activities of engineering, operations,
purchasing and quality optimum specifications vitally influences the
contribution made by all these dep’ts to the firm’s success. In manufacturing
firm when specifications are fixed, the final design of the product also fixed.
When the final design is fixed the products competitive stance and its profit
potential are also fixed. It is estimated that 75 to 85 percent of avoidable

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total costs are controllable at design stage. Consequently early purchasing
involvement and supplier professionals are essential in the firm’s effort to
reduce total cost. Developing proper specification is an important
management task. The task is difficult because it involves many variables
including the problem of conflicting human sensitivity and orientations.
Many dep’t are capable of contributing to design, however, they frequently
are thwarted from fully doing so because of conflicting views. Before
optimum in design can be achieved these major conflicting views must be
reconciled.
Basic importance’s of specification is that it can enable to reduce cost and
control cost, markets materials and methods are constantly changing hence;
a second look to modify , simplify, or improve simplification will always be
necessary justified and profitable.
Preparing specifications for a product involves four major considerations:
 Design consideration of function; the designer analysis the essential
function, component parts of need & wants for requisition.
 Marketing consideration of consumer acceptance; through market
research consider the consumer interest, willingness and general
situation.
 Manufacturing consideration of economic production; manufacturer
should be analysis of economic scale for production & value analysis
for producing product in order to get profit.
 Procurement consideration of markets on value of materials, materials
availability & supplier capabilities.

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 How balanced specifications are developed?
To develop specifications that properly balance product quality
characteristics and costs, management must coordinate the company’s
technical and business skill. There are four approaches that serve us to
develop balanced specifications. These are
1. Early purchasing involvement and early supply involvement: a
progressive firm involves purchasing and potential supplier during
early stage of new product development. Such early involvements
optimize the development of specification since the technical and
commercial issues are addressed at the point where there is maximum
objectivity and flexibility. This can improve product quality
reliability, while compressing development time and reducing total
material cost. As more and more firms embrace the use of cross-
functional teams in the development of new products, early
purchasing and supplier involvement becomes an inherent component
of the process that culminates in the development of specifications.
2. The formal committee approach: this approach recognizes that a
good specification is a compromise of basic objectives. A
specification review committee is established with representative from
design engineering, production engineering purchasing, marketing,
operation (including production control), quality, and standards. Or
committee or professionals are selected from different dep’t. When a
new product design is proposed all members of the committee receive
copies of all drawing, bill of materials and specification. No design
becomes final until the committee approves it.

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 3. Formal approaches: this method emphasizes the concept of a buyer’s
responsibility to challenge materials requests. At the same time, top
managements urges designers to request advice from buyers and work
with them on all items that may involve commercial considerations.
Emphasis at all time is placed person to person communication and
cooperation between individual buyers and designers.
4. The purchasing coordinator approach: one or more positions
created in the purchasing dep’t, for industrial frequently called
material engineers, to serve in a liaison capacity with the design dep’t.
Typically, the materials engineer spends most of his or her time in the
engineering dep’t reviewing design work as it comes off the drawing
boards. The materials engineer’s searches for potential purchasing
problems in an attempt to forestall them before they become serious.
This approach is highly structured and expensive. It also very
effective. There fore it should be used when ever coordination
problems stemming from the technical nature of the product or from
the magnitude of its cost justify such an investment.
Writing specifications
After the design of a product is determined, the next step is to translate the
individual part and materials specifications in to written form. The need for
clarity and precision of expression is important in all business
communication. Nowhere is it more important than in the communications
emanating from purchase contracts. Optimal performance in all dep’ts is
contingent on good specifications. To meet the need of all dep’t
specification must satisfy many requirements such as:
 Design & marketing requirements for functional characteristics,
chemical properties, dimensions of products &appearance.

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  Manufacturing requirements; for workability of materials and
product ability, predict ability.
 Inspections requirements; to test materials for compliance with
the specifications.
 Store requirements to receive, store & issue the material
economically.
 Purchasing & supply management requirements to procure
materials without difficulty and with adequate competition from
reliable source of supply.
 Production controls requirements to substitute materials when the
action becomes necessary.
 The total firms requirement for suitable quality at the lowest
overall cost
 The total firm’s requirement to use commercial and industrial
standard material whenever possible and to establish company
standards in all other cases where nonstandard material is used
repetitively.
 Quality requirements; for suitable quality at the lowest cost &
establish standards of materials.
Procurement importance for specification
One of the basic requirements of a good specification is to satisfy the
procurement consideration of clear, concise and unambiguous
communication. Clarity in written expression is not always easy to achieve.
There are three principal types of detailed specifications: commercial
standards, design specification and material and method of manufacturer
specification

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 1. Commercial standards: a commercial standard is nothing more than
a complete description of the item standardized. The description
includes the quality of materials and workman ship that should be
used in manufacturing the item along with dimension, chemical
composition, and so on. It also includes a method for testing both
materials and workman ship. Commercial standards are the corner
stone of the mass production system. Commercial standard is
applicable for raw materials, fabricated materials, individual parts and
component and subassemblies. Purchasing by commercial standard
somewhat similar to purchasing by brand name. In both methods, the
description of what is wanted can be set forth accurately and easily.
Inspection is only moderately expensive for materials purchased by
commercial standards. Commercial standard products require periodic
checking in addition to sight identification to assure buyers that they are
getting the quality specified. Commercial standard items should be used
whenever possible. They contribute greatly to the simplification of
design, purchasing procedures, inventory management, and cost
reduction. Copies of standard specification can be obtained from a
number of government, trade association and testing association sources.
2. Design specification
Not all items and materials used in industry are covered by standard
specification or brands. For many items, therefore, a large number of buying
firms prepare their own specification. By doing so, these buyers broaden
their field of competition. By preparing its own specifications, a company
can often avoid the premium price of brand name items and sole source
problems of patented copy righted and property product. When preparing
specification a company should attempt to make them as close as possible to

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industry standards. If any special dimension, tolerances, or features are
required, every effort should be made to attain these “specials” by designing
them as additions or alterations to standard parts. This action will save time
and money. Generally design specification is prepared by the buying
organization. B/c the buying organization avoids the premium price of brand
name items and sole source problems of patent items.
3. Material and method of manufacturer specification. When this method
is used, prospective suppliers are instructed precisely as to the specific
materials to be used and how they are to be processed. The buyer
assumes full responsibility for product performance. Further, the
buyer assumes that his/her own organization has the latest knowledge
concerning materials, techniques, and manufacturing methods for the
item being purchased. In this case, purchasers see no reason to pay
another company for this knowledge. Also, these specifications are
used most appropriately in those situations where technically
sophisticated buyers in large companies deal with small suppliers
having limited research and development staffs. Normally, however,
this technique is used in industry because it puts such great
responsibility on the buyer. It can deny a company the latest
advancement in both technical development and manufacturing
processes. Specification of this type is expensive to prepare.
Inspection generally is very expensive. There are two important
features of this method of description. First, the widest competition is
possible, and thus good pricing is assured. Second, since the product
is nonstandard, the ant discriminatory provisions of the Robinson
atman Act pose no barrier to obtaining outstanding pricing and
service.

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Other purchase descriptions
1. Performance specification: instead of describing an item in terms of its
design characteristics, performance specification describe in words, and
quantitatively where possible, what the item is required to do. This type
of description is used extensively in buying highly technical military and
space product. Potential suppliers are told only the performance that is
required. Though performance is specified in precise detail, suppliers are
not told how the product should be manufactured or what material should
be used in its manufacture. There are two primary advantages of
describing quality by performance specification:
a) Easy of preparing the specification
b) Assurance of obtaining the precise performance desired.
2. Market grades: grading is a method of determining the quality of
commodities. A grading is determined by comparing a specific
commodity with standards previously agreed on. Grading is generally
limited to natural product such as lumber, wheat, hides, cotton, food
products and so on. The value of grades as a description of quality
depends on the accuracy with which the grades can be established & the
ease with which they can be recognized during inspection. In buying
graded commodities, industrial buyers often use personal inspection as a
part of their buying technique.
3. Brand or trade names: brand is a name, sign, symbol or design a
company uses to distinguish or differentiating its products from others.
Branding or differentiating a product is generally done to develop a
recognized reputation and thus gain repeat sales, protect the product
against substitutes, maintain price stability, and simplify sales promotion.
The primary reason most firms manufactures brand their product is to

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 obtain repeat sales. Consumers develop a preference for brands.
Therefore, branded products can generally be sold at higher prices than
unbranded products of similar quality. A brand represents the
manufactures pledge that the quality of the product will be consistent
from one purchase to the next. Brand name products are among g the
simplest to describe on a purchase order. Thus they save purchasing
time and reduce purchasing expenses. An inspection expense is also low
for branded products. The only inspection required is sight verification of
the brand labels. The brand is quality ordered. The higher prices usually
paid for name brands thus are offset to some extent by reduced
description preparation and inspection costs.
4. Sample; samples have been the lazy persons method of describing
requirements. Samples generally should be used only if the other
methods of description are not feasible. The actual description or
definition of quality is sometimes avoided, because the buyer
submits a sample to prospective suppliers.
5. Market grade grading is a method of determining the qualities of
commodities. A grade is determining the quality by comparing specific
commodities with standards previously agreed on.
6. Function and fit specifications; such purchase descriptions are a
variation of performance specifications and are used in early supplier
involvement programs. With this approach, the design team describes the
function(s) to be performed and the way the item is to fit in to the larger
system (e.g. Automobile, computer, etc). as early supply involvement
becomes more common, this approach to describing requirements
undoubtedly will increase in popularity. With careful prequalification of
suppliers, there are no significant disadvantages with this approach.

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7. Qualified products: in some situations, it is necessary to determine in
advance of purchase whether a product can meet specifications. These
situations normally exist when: 1) it takes too long to conduct the normal
post-purchase inspections and tests that are required to insure quality
compliance, 2) inspection to ensure compliance with the quality aspects
of specification requires special testing equipment that is not commonly
or immediately available, and 3) the purchase involves materials
concerned with safety equipment, life survival equipment, research
equipment or materials described by performance specifications. When
advance qualification is indicated, suppliers are pre-qualified by a
thorough review and test of the entire process by which they ensure
compliance with their specifications. After qualification, the products of
the approved suppliers are placed on what is called a qualified product
list (QPL). Approved products are described by trade name, model
number part number, place of manufacture, and similar identifying data
on the QPL
Standardization
Definition standardization as the process formulating an applying rules for
an orderly approach to a specific activity, for the benefit cooperation of all
concerned, promotion of economy functional performance and safety
requirements. Standards are documents that recommend minimum level of
performance and quality of goods and service & optional conditions for
operations in a given environment. The objective of standardization is select
not least expensive or most expensive, but the right quality to meet the need.
In business, the concept of standardization is applied in to two area:
industrial standardization and managerial standardization.

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Industrial standardization is concerned with the standardization of things
based on their size, shape, color, physical properties, performances
characteristics etc. The second application deals with the managerial
standardization are concerned with about operational practices, procedures,
and systems.
Managerial standardization can be defined as the process of establishing
agreement on uniform identification for the definite characteristics of
quality, design performance, quantity services etc. a uniform identification
that is agreed on is called standard.
The broad implication of standardization
Mass production; is the production of many diverse products assembled
from standardized parts which them selves have been mass produced. The
use of the standards permits a firm to purchase fewer items in large quantity
at lower prices. Purchase of standardized items saves money in four ways;
lower price, lower processing cost, lower inventory carrying cost and fewer
quality problems.
Simplification means producing the number of standard items a firm uses in
producing and carries in its inventory. Simplification savings result primary
from reduced inventory investments more competitive price greater quantity
discounts reduced clerical effort and handling cost.
Some of the examples of standards
National standards: - guide to the economic of quality, total quality
management (TQM), quality management system within country or local.
International standards: - the principal of producing worldwide standards.
Get the acceptance from international standards organization (ISO).
ISO 9000: provides guidelines and definition used to select the standard
most applicable for a give organization.
ISO 9001: provides a quality assurance model for assuring conformance in
design, development, production, installation and servicing.

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