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Specifications management is crucial for buyer-supplier relationship

Specifications management remains a key driver of cost and product quality for manufacturers. Specifications are crucial to ensure the orders are processed as per the manufacturer’s guidelines and delivered on time. They are critical to industries such as automobile and heavy equipment where even a slightest deviation in specifications would affect the compatibility of the component.

Suppliers have to exhibit caution in processing the orders; non-compliance to standards would lead to rejection of their supplies and may result in cancellation of contracts. Manufacturing industries generally have a tight hold on specifications. Therefore managing specifications requires a calculated effort and there are software tools available to support the function.

When the manufacturer decides to modify component specifications, communicating with suppliers regarding the change can be a daunting task. It may warrant multi-channel global communication and multiple meetings with suppliers. However, service providers can facilitate these changes by providing a closed loop process for reviewing and approving changes related to component specifications.

Benefits of managing specifications

Communicating material changes needs a coordinated effort from plants, labs, and suppliers. Stakeholders also take into account the production, testing labs and suppliers for a hassle-free transition.  Professional support ensures compliance with testing procedures and designated unit measurements. Other key aspects include:

  • Electronic document distribution for policies and procedures, packaging and high valued handcrafts
  • Notifying suppliers on the timeframe for implementing the changes
  • Providing an avenue for suppliers to offer their comments or suggestions for changes in specifications.

Procurement managers can adopt process automation for specifications management. This helps the production teams to keep track of the product batches, testing procedures and data specifications for quality control. For those with global operations, automation simplifies the procedures and ensures transparency in communication and eliminates ambiguity.

Ensuring sustainability

Many companies expect suppliers to conform to the environmental and social standards and it is one of the major parameters for selecting them. Some train suppliers on these aspects and seek a declaration on maintaining the green standards.

The need for implementing production-related environmental and social standards has become strong in the wake of globalization. Producers and suppliers are expected to adopt green standards to improve their brand value and for wider acceptance of their products or services in the market.

Some of the auto majors in Europe require suppliers to submit their ISO 14001 environmental management certificate or the European Eco-Management and Audit System (EMAS) as part of their partnership agreement. Alternatively, they have to prove their own designs and processes conform to the standards set by the buyers.

Specifications management ensures suppliers understand the material requirements and adhere to stipulations so that issues related to safety, defects and rejections can be avoided.

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