L4M3- Chapter 2- Fundamentals of specifications

Question 1

What are the 5 rights?

Answer 1

Place
Time
Quantity
Quality
Price

A specification forms a legally binding document which ensures those 5 rights are delivered

Question 2

What are different types of market dialogue?

Answer 2

General networking
One to one meetings
Group visits
Meet the buyer events
Formal negotiations or competitive dialogue tenders

Question 3

What is different about market dialogue in regulated procurement?

Answer 3

Procurement is regulated in places like the EU

Dialogue must be equitable, transparent and halt once formal tendering processes have begun (unless authorised by the competitive negotiation procedure)

Question 4

What is market dialogue?

Answer 4

An ongoing conversation between suppliers and purchasers

It can be used to develop current or future specifications

Must be sure to avoid any supplier bias

Question 5

What is the first stage of creating a specification and why is it important?

Answer 5

The first stage of any project management is scoping

Scoping questions that are important to ask:
- Who will produce the draft?
- Is there an existing spec? Will it deliver requirements?
- If there is no existing spec, what fundamental objectives need to be achieved? (quality, technical, ESG)
- Which stakeholders need to be consulted

Question 6

When using a previously used existing spec (aka a sample spec) what should you consider?

Answer 6

A previously used spec needs to be robustly challenged to see how well it fits with your current circumstances.

It is important to consider some key questions:
- What are you trying to achieve
- Performance vs conformance
- relevance of things not required for current need
- Standards
- Ambiguity
- Regulations
- Operating environment

Question 7

What are the ADV and DISADV of using a pre written spec?

Answer 7

ADV
Easy to critique than it is to create (blank pages are a difficult starting point)
Necessary areas will be covered and therefore considered
Using multiple samples can provide different solutions
Prompts to check key legislation that may apply
May suggest potential innovation through the life of the contract
Consistent formatting

DISADV
Time wasted discussing irrelevant areas
Some relevant areas to you now may not be included previously
Combining different specs can create inconsistency and ambiguity
Sample spec may have different quality levels
Legislation or codes of practice may be obsolete
May be too much detail

Question 8

What is CoP?

Answer 8

Code of practice

A set of written rules that outline how people working in a particular process should behave

Question 9

How can you create shortcuts in specification writing?

Answer 9

Use of brands
Use of recognised standards
Use of samples

Question 10

ISO outlines the standard which can be product specific or at a holistic business level, give some examples of each?

Answer 10

Business management
ISO9001- Quality management
ISO 27001- Information security
ISO 5001- Energy management
ISO 14001- Environmental management

Product spec
ISO3630-1- dentistry root canal instruments
ISO 18890-2018- Clothing- standard method of garment measurement

Question 11

What is the BSI?

Answer 11

British Standards Institute

The key areas of a spec are outlined by BS7373 which aligns to SIO14084

Question 12

What are the key areas in a specification? (p90)

Answer 12

TVLFSDCRS

Title- precise description
Version control table- need the latest spec and the same version uniformly
List of contents
Foreword- context for the spec (inc viewpoints, assumptions_
Scope- Set the limits to ensure time is not wasted on areas not wanted
Definitions- terminology, abbreviations, units of measure, time
Consultation requirements- e.g. compliance with local/national requirements
References to other documents- standards, CoP
Substantive requirements- this is the bulk and includes characteristics, timescales etc

Question 13

In a specification, what are the substantive requirements?

Answer 13

This is the bulk of the specification and sets out the actual requirement

Includes:
Characteristics (design, dimensions)
Timescales (delivery dates)
Response times
Performance/reliability (operating KPIs, testing methods)
Lifespan
Packaging
Recycling criteria
Social criteria
Info requirements (manuals)
Implementation (training)
Guarantees/ warranties

Question 14

What happens when a spec is input into a contract?

Answer 14

It becomes legally binding. The contract must explicitly refer to the spec to be considered legally binding

It is included as an attachment to the contract AKA a schedule

Question 15

What are the ADV and DISADV of using published standards when writing a specification?

Answer 15

ADV
Spec is shorter
Understanding is easier
International standards removes barriers to trade
Up to date

DISADV
May need to familiarise yourself with the standard detail
may not have full understanding of the standards implications or operating environment
Insufficient thought to how the standard may change
SMEs may not be familiar

Question 16

What is an SME?

Answer 16

Small to medium sized enterprise

EU definition is fewer than 250 employees and less than 50 million turnover

Question 17

What is the advantage of standardised products?

Answer 17

Clarity of spec
Compatibility
Economies of scale
Reliability
Service enhancement
Time saving in the procurement process
Accuracy of quotations
Wider supply market (more suppliers can provide)
Narrower supply base (moving to comms with fewer suppliers due to less breadth of need)
Inventory savings (smaller product range)
reduced risk

Question 18

What are the considerations of standardisation?

Answer 18

There are many advantages but standardisation can limit innovation, create generic solutions and reluctance to develop new ideas

It reduces the range of products available

Question 19

Increased standardisation can reduce the range of products available, but what are the advantages of increasing the range of products?

Answer 19

Breadth- appeal to more segments of the market
Innovation
Product differentiation
Cultural differences e.g. in europe they prefer a sweeter mayonnaise than in UK
Economic factors (like pressures to do stuff cheaper)
Flexibility

Question 20

What is the purpose of a KPI?

Answer 20

Measure how well a contract is performing in delivering the requirements (these will be outlines in the specification and deliver the 5 rights of procurement)

Question 21

What are the 3 main types of data used in KPIs?

Answer 21

Binary data- yes/no scenarios
Numerical measures- a number of percentage explaining performance
Qualitative/subjective assessments- opinions about how well something is performing/ being delivered

Question 22

What are the 5 steps in defining a KPI?

Answer 22

STEP 1- What are you going to measure? (aka deciding what matters, why is it important, will it improve a problem, do you have authority)

STEP 2- How is it measured? (what data is used, does it exist)

STEP 3- Who is going to measure it? (Need to agree on the outcome and be transparent, but it may be easier for one party, or to use an agreed source)

STEP 4- How often, or over what period, will it be measured?

STEP 5- How does the measure convert to a score? (What does good look like)

Question 23

What is an SLA?

Answer 23

Service level agreement

Document outlining a minimum level of service expected between a service provider and a client

It covers scope, responsibilities and how to escalate (and some other areas)

Question 24

What is the breakdown of key areas of how an SLA works?

Answer 24

Service- a provider could be a consultant/trainer/accountant/cleaner/supplier of goods

Recipient- a person/organisation/third party

Quality- physical quality of goods/ aspects of delivery e.g. timeliness, location etc/ responsiveness/ availability of the service

Standards- mutually agreed or contractually specific

Question 25

When might an SLA be defined by the supplier?

Answer 25

Often when there is a single product being sold to many purchasers.

It is common in IT on software packages and the central methodology for solving bugs, patches, glitches etc

Often purchasers will aim to avoid supplier drafted SLAs

Question 26

What elements make up an SLA?

Answer 26

Service definition- what is to be provided
Quality definition- minimum standards, unacceptable through to good standards
KPI details- what is measured, how, who, how often, converting to scores and targets
KPI management response- actions and consequences if targets are not reached/ exceeded
Operational performance- may not be a KPI but flags possible significance of operational failures e.g IT outage
Operational performance management response- How operational issues are resolved
Constraints or mitigating factors- under what circumstances are normal service levels waived

Question 27

Often and SLA and a spec are similar/ overlap. Is an SLA needed if the speciation has sufficient detail?

Answer 27

There is no definitive answer on this and it will depend on what is being procured

An SLA can be supplementary to a spec by defining what will happen if the specification KPIs are not met

Question 28

When and how does an SLA become legally binding? ie making it contractual = legally binding

Answer 28

Internal SLAs are not normally contractual so do not need to be legally binding

If the only document in the contract is an SLA then this is bad practice. For it to be legally binding the usual rules need to be followed:
Offer -> acceptance -> capacity to contract -> consideration -> intention to be legally bound

Question 29

What is ADR?

Answer 29

Alternative dispute resolution

Any method of resolving a dispute between two parties that does not involve court action e.g. mediation

Question 30

What is a deed?

Answer 30

A deed is usually an agreement for the transfer of an asset, it differs from a contract as there may not be any need for consideration (in commercial contracts this is often payment)

Question 31

When would an SLA be executed as a deed?

Answer 31

If the SLA is the only agreement there is and it does not reference consideration, the agreement must be executed as a deed to be legally binding

Question 32

What is another name for an SLA?

Answer 32

Performance management framework

Question 33

Give examples of KPIs that measure delivery compliance?

Answer 33

OTIF- quantities supplied matched quantity ordered
Delivery on time- delivered in an agreed time frame
Average lead time
Average time to fill emergency orders
Consignment stock availability- supplier holds adequate range/ units

Question 34

Give examples of KPIs that measure quality?

Answer 34

Product/service compliance- meeting standards
Reliability/durability- number of times non routine call outs are required for servicing
User satisfaction- possibly though user surveys
Technical support- acceptable quality of info
Response time
Repair lead time

Question 35

Give examples of KPIs that measure Health and safety?

Answer 35

Endangering H&S- zero reports of impacting staff, visitors, public etc

Question 36

Give examples of KPIs that measure administrative requirements?

Answer 36

Number of credit notes per month
Invoice prep
Provision of quotations
Documentation- received for installs in a timely way
Management information

Question 37

Give examples of KPIs that measure best practice/ continuous improvement?

Answer 37

Innovation
Value added activities (may be a target list identified in advance and a % of those achieved)
Proactivity
Responsiveness
Flexibility
Openness and cooperation
Understanding of accountabilities

Question 38

Give examples of KPIs that measure contact center performance?

Answer 38

Abandonment rate of calls (caller hanging up whilst waiting to be answered)
Average speed to answer
Time service factor- percentage of calls answered in a given timeframe
First time resolution

Question 39

Give examples of KPIs that measure cost management?

Answer 39

Savings- reduction in unit price or total cost reduction (final account sum vs original quoted)
Cost avoidance- value of spend avoided by pre-emptive action (e.g. agreeing forward orders to avoided market wide price increases)
Transaction cost reduction- reduction in the number of invoices

Question 40

KPIs can be used to assess performance, give examples of some categories that KPIs could fall under

Answer 40

Delivery compliance e.g. OTIF
Quality e.g. reliability, satisfaction, repair lead time
Health and safety e.g. counts of endangerment
Admin e.g. number of credit notes per month
Continuous improvement e.g. innovation
Call center service e.g. abandonment rate
Cost management e.g. savings