When it becomes very costly to develop performance or technical specifications or if such a practice does not prove satisfactory, purchases are made on the basis of brand names, e.g. in case of items like trucks, scooters, tractors, cars etc it is not feasible for the buyers to develop specifications. There would be a small difference in each brand of different manufacturers, even though each product might be designed to provide almost identical performance at the same or slightly different prices charged for the competing brands e.g. prices of different brands of scooters – Bajaj, Priya, Allwyn Pushpak, Falcon, Avanti, Vijay Super, Girnar etc are not the same. Price of an Ambassador car is different from that of Premier Padmini. In case of such type of products each manufacturer would claim that his product is the best of all. But the buyer’ can judge the per6formance of each brand after using various products over a number of years and can decide the most satisfactory brand. The reliable and progressive manufacturer creates goodwill for his firm by ensuring the best performance of his products over a number of years. But the buyers have to keep a close watch over the working of different manufacturers and their products. The best product of the past may have become inferior due to change in quality, specifications, etc., while the new manufacturers with most modern machinery may have come out with better products than the best products of the past.
1) When a buyer has to purchase or is required to purchase a particular type of goods from more than one supplier, specifications ensure the identity of goods purchased. Thus, the materials with identical nature can be purchased from different suppliers on the basis of specifications only.
2) Specifications provide an exact standard to the inspection department of the buyer against incoming materials can be inspected or measured or tested with great accuracy and this ensures uniformity in quality of materials purchased.
3) Specification buying includes more suppliers to bid an offer because all of them know exactly what is required and they also know what the other suppliers are bidding for. Now increased competition proves very economical to the buyer in form of lower process.
4) Specifications are prepared considering various factors such as quality, sales potential, availability of raw materials, consumers’ acceptability etc. This may result in simplification of design, reduction in the quantity of materials used, increasing the productivity, decreasing the cost of production, lower selling price etc. Thus buyers are more benefited by specifications, if the benefits mentioned as above are passed onto them by the suppliers.
5) If the suppliers combine specifications with quality control measures, the buyers have not to worry much about the testing or inspecting of the products purchased and in such circumstances buyer’s money and time both are saved by doing less complete inspection.
6) Specifications buying is a necessary step towards industry wide standardization and standardization helps a lot in cost saving.
1) Specifications becomes inappropriate in case of patented items or items with brand names or items manufactured by patented process. Product of each manufacturer shows slight difference, even though each of them might be designed to provide same type of service e.g. trucks, scooters etc. Product of each manufacturer is unique and the buyers purchase the products of a particular manufacturer because they have confidence in the unique skill of that manufacturer e.g. Telco Trucks, Bajaj scooters, Maruti cars etc
2) Items purchased to specifications require detailed inspection to decide whether they are in conformity with specifications prescribed or not. This proves costlier. While items with brand names require only a casual check.
3) When specifications become very stringent, many problems arise. In case of very stringent specifications, the buyers have to pay more than necessary for the items.
4) Specifications buying proves economical only in case of large purchases. It is not wise or advisable step to prepare specifications for small purchases. Moreover, where the buyer has to purchase many types of items in small quantity it may prove very harmful to prepare specifications for such items.
5) When a buyer purchase items as per his / her specifications and if the product does not prove satisfactory even though the supplier has complied with the terms of the purchase the responsibility rests with the buyers for unsatisfactory performance.
6) Now once the specifications are fixed, it is in the interest of the buyer to review them. If the buyers do not review the specifications once fixed, considering technological developments, they may be thrown out of the markets by the consumers.