Lecture 3: Analysis of

supplies
AHAD NAZIR
Agenda
Basics of specification of requirements

Types of requirements

Purchase specifications including through brand names, standards, samples, compositions, etc.

Forecasting of demand and supply

Analysis of delivery requirements

Analysis of supplier service and responsiveness

Specifying requirements
Types of Requirements

Operational requirements (needed to run day-to-day business)

Capital requirements
Types of Requirements

Production requirements (directly related to producing the goods

or services)

Non-production requirements
Purchase Specifications (Discussion
Points)

Specifying the required product/service

Product specification VS service specification

Over- and under-specifying are equally bad!!!

Elements that are required to specify the
requirements

Functionality Design Capacity Performance Recyclability

Safety
Size Colour Durability Flexibility
requirements

Conditions of
Labeling ....
use
 Specification Type
Brand or trade name
Supplier/industry codes
Samples
Technical specification
Composition specification
Functional/performance specification
Where Appropriate
• For commonly used item.
• When related to a brand name will differentiate your product.
• When quality is more important than cost.
• For simple items.
• To facilitate purchases from a particular supplier.
• When it is difficult to assess quality prior to purchase.
• When showing what is required is easier than describing it in writing or otherwise
specifying it.
• When suppliers do not possess the required design expertise.
• Where the organization wishes to keep the design expertise in-house
• Where there are complex interfaces with existing equipment.
• Where the buyer is prepared to accept the risk of the design not resulting in the
required performance.
• For products as raw materials, commodities and food products.
• When safety or enviornmental considerations are critical.
• When performance depends on composition.
• When suppliers have greater expertise than the purchaser.
• Where innovation is valued.
• When technology is changing rapidly in the supplying industry.
Quantity Forecasting
Demand and Supply Forecasting
methodology: Qualitative

Expert opinion: Market testing

• Scenarios (best, • Sample of
worst and likely) population
• Delphi technique • Trial sales
Demand and Supply Forecasting
methodology: Quantitative

Use past demand data to generate a

Time series analysis forecast - works well for short-term
forecasts.

Establishing a cause-effect relationship

Causal methods between independent variables and the
demand for a product. Linear regression!
 Quantitative methods are
not covered here because
the same methods will be
covered in Project
monitoring, evaluation, and
controlling management
course in the same
semester
Quantity Forecasting
Specifying delivery: Times & Schedules

When & where something is The lead-time available to the Reinforce through contractual
needed supplier terms & arrangements
Specifying delivery: Point of delivery

Full address Contact person Restrictions on deliveries Access to premises Supervision and confidentiality
(timings, weight & size of (services)
delivery vehicles and
packages)
Specifying delivery: Transport &
packing

Consider damage, time Nature of packing Special transport

and cost required arrangements
Specifying supplier service & responsiveness
 Specifying supplier service &
responsiveness

Supplier responsiveness Technical support Maintenance & repair

Levels of service Technical supervision/ assistance Maximum time frames for repair
& training & delivery of spare parts, etc.
Other information
Other information
Contact Basis for Background
Policies Legislation
information evaluating offers information
• Technical, • To help • Safety & • Information on • Requirements
purchasing & suppliers to environmental the buying related to
finance optimize their policies company hazardous
contact designs • Statement of goods, health
persons • Scope of intent & safety,
supplier’s environmental
responsibilities protection,
import
restrictions...
Thank
you