L4M2 Chapter 3

Question 1

Remember, engineering drawings as part of tender spec are often legally binding as they are understood worldwide, thus have little ambiguity.

Question 2

What’s the difference between functional and nonfunctional requirements?

Answer 2

Functional - describe what a product or service should do

Nonfunctional - describe how a product or service should operate

Question 3

Remember, performance specifications come in 3 major types

Answer 3

Outcome specs
Output specs
SoW specs

Capability –> Inputs–>Outputs–>Outcomes

Question 4

What is the starting point of writing a specification?

Answer 4

Start with the Business Requirements Definition BRD, which sets out what service or product needs to be delivered to satisfy all stakeholders.

One to model for identifying business requirements is the RACSCI model.

Regulatory
Assurance of supply
Quality
Service
Cost
Innovation

Then use Starburst model, which entails taking one element of the RAQSCI model in a six pointed star and rather than think of six idea, simply answer 6 questions - who, what, how, why, when, where. Questions must be exhausted before they are answered.

Question 5

Remember, outcomes should be at the heart of any good specification, however, there are three major difficulties with them:

Answer 5

1 - how to measure them - complexity

2- time delay between supplier taking action and the achievement of results

3 - more than one output can affect the outcome - supplier cannot control all variable. for example, if the outcome is to maintain office building heat and outcome is a temperature control unit then the outcome is achieved, but is subject to staff not messing around with control unit, which would undermine the outcome.

Question 6

Remember, …

Outcome spec - performance spec which describes the function/performance that a product/ service must fulfil

Output spec - specific deliverables that can be measured in terms of time, quality and cost. Often conformance

Outcomes are delivered by outputs, which are the result of inputs

Outcome spec enables suppliers to utilize their skills by not stifling innovation

Outcome spec can be difficult to measure success.

** both output and outcome spec can be supported by SoWs**

Question 7

How many types of SOWs are there?

Answer 7

Design - how the work should be done, quality levels and materials to be used.

Level of effort/ material/ unit rate - short term contracts which specifies the unit of delivery as an hour of work

Performance - supplier is supplied with the purposed of the project, not how to deliver it. Supplier is given free reign.

Question 8

Which agency provides international standards?

Answer 8

International Organisation for Standardisation (ISO)

Question 9

What is a Technical Specification?

Answer 9

One which is based on standards and have a clear spec to meet. if it fails, it is said to be out of spec. e.g. ISO spec or BSIin UK

Question 10

What model can be used to vet the accuracy/ reliability of information sourced from the internet?

Answer 10

SAMOA

Source
Audience - who is intended
Methodology - how is data gathered and organised
Objectivity - no bias
Accuracy

Question 11

What is Market Sounding?

Answer 11

Approaching suppliers to seek level of interest they would have towards an upcoming tender. Usually performed when buying organisation is uncertain that the market suppliers have what it needs

Question 12

What is Early Supplier Involvement?

Answer 12

Involvement of suppliers in product development process from an early stage in order to use the supplier’s experience/ expertise.

Advantages include:

Cost savings
Process improvements
Supply chain improvements
Reduced supply risk

ESI also helps ensure that cost are not embedded into product design which cannot then be removed at later stage of its life cycle. this can help ensure that fixed cost are reduce from product introduction and remain low through to decline.

Over the life cycle of a product, the longer the time goes on, the more embedded costs become and harder to reduce

Question 13

What are the key stages of ESI?

Answer 13

1 - establish customer need
2-identify project
3-develop target costs
4-prepare project plans
5-collaborate with operation
6-produce list of potential suppliers
7-engage in supplier workshops
8-conduct value engineering

Question 14

What is the definition of Through Life Contract?

Answer 14

Contract that gives a contractor sole accountability for support after the purchase/ acquisition

Typical part of through life contracts include:

Design
Manufacture
Installation
In service support
Decommission and disposal

Typically associated with purchase of capital asset. Think of machinery on a production line

Question 15

What are the 6 components of a through life specification?

Answer 15

1 - Scope - what is the purpose of the spec?

2 - Definition - produce a user requirements document (URD) - statement of customer expected outputs, statement of expected limitation of liability, insurance warranty and other important definition to outline.

3 - Description of requirements - detailed requirements

4 - Testing and acceptance - acceptance testing is where you ask the question did we build the right thing? Functional testing is where you ask the question did we build a correctly working product? BOTH ARE NECESSARY! There are 5 main types of acceptance testing:
Alpha - during development stages to continually tweak spec to ensure it complies with spec. performed by supplier
Beta- testing product in real life environment performed by the customer on their customer premises. They are also referred to as field test. Customer provides supplier with feedback to again ensure it complies with spec
Contract acceptance - tested against spec criteria ana standards. Most basic of types
Regulation acceptance - tested against standard and regs such as ISO, law or health and safety standards
Operational acceptance - additional testing following both or either Alpha & Beta, to enable all operational functions of the product test it for any final feedback. Acceptance here leads to go live!
Black box - most common in software testing. Focuses on inputs and outputs without consideration for internal workings of the product.

5 - change control mechanisms and remedies - there are various reasons to change the spec of a project, however, you do not simple change and proceed. you must review the options available. to identify and approve changes to a spec:
Describe the change
Review the change
Look at options
Final approval

Sponsor - person who assumes accountability for the project

6 - Social and environmental criteria - Social capital/ value is network of relationships people work and the environment, for example a group of workers can band together to drive business growth which in turn employs more people locally which then raises standard of living and health - environmental - damage/ impact on environment

Question 16

What is a procurement specification?

Answer 16

A document that presents prospective suppliers with a clear, accurate and full description of the orgainsation’s needs and enables them to propose a solution to meet those needs

Question 17

What is a statement of needs?

Answer 17

The definition of a business problem or opportunity together with the criteria that define it

Question 18

What is a specification and its purpose?

Answer 18

A specification is a statement of needs to be satisfied by the procurement of external resources.

Its purpose is to present prospective suppliers with a clear, accurate and full description of the orgainisation ‘s needs

Question 19

What is a technical specification?

Answer 19

A detailed technical description together with acceptance criteria that forms the basis of a product design

Question 20

Define tolerances in relation to specifications

Answer 20

The permissible limit of a variable used to define a product - e.g. its physical dimensions

Question 21

Why should technical specifications be standardized and why is it beneficial to procurement?

Answer 21

Technical specifications should be standardized so that suppliers can make a product or deliver a service to an approved standard.

Prouduced by standarfds of a national or international body i.e. (IOS - International Organisation for Standardization)

The result is that a buyer can select from a wide range of suppliers knowing that it will receive the same quality from each of them.

Question 22

What is a design specification?

Answer 22

A detailed document that sets out the the precise way that a product must be built or a service delivered and includes any drawings, standards that must be met and dimensions

Question 23

Why are drawings important?

Answer 23

A drawing is complementary to a specification. It conveys to a supplier what the designer has in mind. It is usually supplemented with details and standards for all of the materials and components to be used

Question 24

What are functional and non-functional requirements?

Answer 24

Functional requirements describe what a product or service should do

Non-functional requirements describe how a product or service should operate

Question 25

What are the disadvantages for organisations to develop their own specificiations?

Answer 25

The disadvantage is that it often transfers risk from the supplier to the buyer as the organization is specifying factors such as tolerances The reason an organisation may develop thier own specification is there may be too few suppliers of the standard product or the cost is too high.

Question 26

What is a performance specification?

Answer 26

A description of the outputs or outcomes that are expected with the detailed design of the product or service left to supplier to decide There are three (3) major types Outcome specificitions Output specifications Statement of work specifications

Question 27

Define outcome-specification

Answer 27

Type of performance specification that describes the specific functions or performance that a product must fulfil. They require specific capabilities from suppliers. They identify what needs to be achieved and the capabilities that are required to achieve that outcome They focuses on the question: Who benefits from this and why? Outcome flow from outputs which in turn are delivered by inputs using a process Outcomes⇒Outputs⇒Inputs⇒Capability`

Question 28

Define business requirements definition (BRD)

Answer 28

It is the starting point for writing a specification and it sets out what the product or service needs to achieve if all stakeholders are to be satisfied RAQSCI model - *Regulatory *Assurance of supply *Quality *Service *Cost *Innovation requirement

Question 29

What is a useful tool for establishing requirements?

Answer 29

The star-burst method - Six point star with the BRD in middle e.g. (service) → each point is labelled with the words what, why, how, who, where and when → questions are asked based on the six words→ when all the questions have been created they can be answered, and the answers then form the basis of the BRD (business requirement definition)

Question 30

What are the three (3) major difficulties with outcomes?

Answer 30

How to measure them Time lag between the cause and effect - government service to improve the mental health of the elderly will take months to see impact More than one output can affect an outcome (sub-outcomes) - installation of a heating system provides heat and make staff comfortable →sub-outcome staff must operate the system properly if not the ovmerall outcome is not met

Question 31

What are the key factors of outcome specifications?

Answer 31

Outcomes are delivered by outputs which are the result of one or more processes that use inputs Outcome specifications provide suppliers with the greatest scope for using their skills and experience to produce products and deliver services that fully meet the end users' needs and for reducing or eliminating any unnecessary costs Outcomes can be difficult to measure, so output specifications are often used instead in the belief that these outputs will deliver the outcome needed

Question 32

Define an output specification

Answer 32

An output specification defines specific deliverables that can be measured in terms of time to deliver, their quality and their cost

Question 33

What are the three (3) main types of specifications? When might they be used?

Answer 33

*The three (3) main types are: Technical specifications Design specifications Performance specifications Technical specifications and drawings can be used - *for a manufactured part *consturction of buildings Design/conformance specifications can be used - *for information technology (specific software) Performance specifications can be used - *for services e.g. call center and cleaning services

Question 34

Differences between technical, outcome- and an output-based specification

Answer 34

Example: Construction of a bridge. The technical specification - describes the materials to be used, the quality standards it must comply with, the volume of each material to use and the methods of preparing and using the materials using a detailed bill of materials The output specification - describes the need e.g. a 3m wide bridge with a hard surface that carries a warranty for both the workmanship and the materials used The outcome-based specification - provides an explanation as to why the bridge is needed e.g. to provide a convenient way for pedestrians to get from point A to point B that can cater for up to 1000 people using the bridge at the same time during specified peak times of the working day

Question 35

What is a statement of work (SOW)

Answer 35

A statement of work (SOW) - detailed description of the specific tasks or services a contractor must perform under the terms of a contract It is commonly used in projects and services and supports both output and outcome specifications

Question 36

List the three (3) main types of statement of works (SoW)

Answer 36

Design SoW - entails instructions as to how the work should be done, the quality levels required and the specifications of any materials used Level of effort and materials/unit rate SoW - specifies the main unit of delivery as an hour of work together with the materials needed to perform that activity and the number of hours of the activity needed Performance-based SoW - provides the purpose of the project or service but does not specifiy how the work will be done or what materials are to be used

Question 37

What is the definition of Standards?

Answer 37

Standards are the measures that show that the specifications (what is expected) of a product or service have been met e.g. *the level of performance *the quality of materials *safety levels International Organization for Standardization (ISO) - an independent, non-governmental international organization witha membership of 162 national standards bodies American National Standards Institute (ANSI)

Question 38

How can the internet be used to develop specifications?

Answer 38

The internet can be a very powerful tool for finding information to develop and find specifications Information gathered from the internet should checked and tested - SAMOA → Source (of the information), Audience, Methodology (used to collect and analyse the data), Objectivity (not bias), Accuracy

Question 39

What is Early Supplier Involvemen (ESI) and what are the main benefits?

Answer 39

Early supplier involvement (ESI) is the involvement of a supplier in the product development process from a very early stage in order to use the supplier's experience and expertise The main benefits of Early Supplier Involvement are:*Cost reductions *Process improvements *Supply chain improvements *Reduced supply risk Early supplier intervention (ESI) can improve quality and reduce costs using an improved product design, which makes it easier for suppliers to produce efficiently. It can also help to reduce the time taken to bring a product to market and also is a good way of building trust and long-term relationships between organisations The key steps for ESI are: *Establish customer need *Identify a project *Develop target costs *Prepare project plans *Collaborate with operations *Produce list of potential suppliers *Engage in supplier workshops *Conduct value engineering studies

Question 40

What is the definition of Through-life contracts and its benefits of managing assets

Answer 40

It is a contract that gives a contractor sole accountability for the design, acquisition, operation, maintenace and disposal of an asset Its major advantage is that it covers the physical product or asset and the subsequent services needed to operate and support it. The benefits of through-life managment are: *Lower cost over the whole life of the asset *Lower risk as there is a single company accountable for costs and services over the life of the asset *A closer match between the asset delivered and the users' needs *Development of capability over the life of the asset as the supplier continues to get experience tof users' needs and can adapt services to meet them

Question 41

What is Limitation of liability?

Answer 41

A limit placed on the financial obligations of a party within a contract

Question 42

What are Warranties?

Answer 42

Written guarantee that requires a supplier to exchange or rectify a malfunction or a product or service within a specified time

Question 43

Why is managing risk a key activity for procurement?

Answer 43

So that ways of mitigating risks can be found Sources of future risk need to be identified at the specification stage

Question 44

What are the six (6) main sections of a through-life specification?

Answer 44

Definition - To define the user requirements. Produce a User Requirements Documents (URD) - a statement of the results or outputs, the technology and the boundaries that the users expect to receive in terms of performance, cost and timelines, Identify user requirements by asking open-ended questions e.g. who will be the users, what problem will this solve? Make sure that the functions, attributes, constraints, preferences and expectations for the product or service are fully explored and trade-offs are agreed Specification detail must give contractor sufficient information quickly and accurately to develop a price for the product or service Sufficient information to minimise risk Specification should provide on-site instructions as to what services should be delivered and how and the terms of outcomes e.g.a dirt free carpet (the outcome) by means of vacuming.

Question 45

What are the main six (6) sections of a through-life specification?

Answer 45

Description of requirement - To write a clear description of the requirement using phrases: 1. 'I expect the product/service to' - describe what the product/service should do 2. 'so that' - why does the user want to do this? 3. 'when' - describe what triggers the use of the product/service 4. 'because' - detail any constraints the user might have

Question 46

What are the main six (6) sections of a through-life specification ?

Answer 46

Testing and acceptance - Acceptance testing is a process for determining whether a product meets its specification before it is released to a customer - other terms for acceptance testing include *end-user testing, *field testing, *operational testing Acceptance tests are validation tests and answer the questions: 'did we build the right thing? and "is this what the customer really wanted? Functional tests answer the question: 'did we build a correctly working product? It is different from acceptance because the end user is not involved.

Question 47

What are the five (5) main types of Acceptance testing?

Answer 47

Alpha and beta testing - *Alpha testing takes place during the development phase and only involves contractor employees *Beta testing (also called field tests) takes place on customer's site and involves the customer's staff using the product in a real-life environment Contract acceptance testing - the product is tested against criteria and standards that were set out in the specification Regulation acceptance testing - the product is tested for compliance with any regulations required by law i.e. health and safety requirements Operational acceptance testing - final testing done after user acceptance testing (alpha and beta) and tests that all the operational functions of the product are working Black box testing - used in testing software. It focuses on inputs and outputs

Question 48

What are the main six (6) sections of a through-life specification?

Answer 48

Change Management Process - Identifying and approving changes to a specification without derailing the project : It is a four-step process. Describe the change - identify the change needed and describe it in a change request document Review the change - project team and customer review and comment on the change and suggest amendments to improve the change and give reasons for rejecting the change Look at options - document any options for the change and also identify an deadline for a decision and the impact on the project if no decision is made by the deadline date Final approval - formal approval or rejection of the change. Approved changes are incorporated into the revised specification and updated project plans

Question 49

What are the main six (6) sections of a through-life specification?

Answer 49

Social criteria - social capital: the network of relationships between people who work in a particular environment Factors that influence social views are: Media, Work ethic and working practices, Brand, company, technology image, Lifestyle trends, Cultural taboos, Consumer attitudes and opinions and their buing patterns, Buying access and trends, Publicity

Question 50

What are the main six (6) sections of a through-life specification?

Answer 50

Environmental criteria - physical environment factors: Recovery from natural disasters - floods, hurricance, earthquakes: when assessing the risks ask the questions: *How long can you go without a product? *Where else could the product come from? *Is it possible to build up a surplus? *How might it affect the company's brand Management of waste emissions - Recycling and its costs. Sustainability of raw materials Pollution - this affects the environment e.g. greenhouse gases contribute to climate change and ozone-depleting gases damage the ozone layer. Procurement should evaluate products or services that are sourced from suppliers in industriess that are likely to ceate air pollution, asses the risks and source from alternative suppliers or re-specify the product Energy efficiency - can increase profitablity and competitiveness by reducing the cost of doing business *Priority list for improving energy efficiency: Energy efficiency programme, Energy audit, Energy Managment Plan, Low-cost measure to improve energy efficiency

Question 51

What are the two (2) ways in which social and environmental factors can be used by Procurement when understanding markets and producing specifications?

Answer 51

Ensure that manufacturing methods used by suppliers do not create pollution or hazardous waste or have a negative impact on the environment and can be done through specification and in the criteria used to evaluate supplier bids for a contract Identify supply chain risks especially when sourcing from overseas e.g. suppliers in areas with history of severe weather conditions which may affect their ablity to ship their product

Question 52

Why do specifications fall short?

Answer 52

People are inexperienced Lack of proper training Lack of information

Question 53

What is an Under-specified need and the four (4) risks involved?

Answer 53

Under-specificed needs occur when not all of the users and their requirements have been identified and assessed The risks of an Under-specified need are: Unsuitable product or service Waste of money - having to rectify or procure an alternative Customer need not satisfied Limited alternatives - because it is difficult or impossible to switch to a lower-cost product

Question 54

What is an Over-specified need and the four (4) risks involved?

Answer 54

A long wish-list of needs that are not the real essentials. The risks of an Over-specified need are: Greater expense - incorportae more features Poor competition - limited suppliers Variety of offers - suppliers who can provide some of the features and few that can supply the full features Difficult to evaluate - trade-offs between different features and attributes in the specification

Question 55

What is an Misinterpreted need and the four (4) risks involved?

Answer 55

Wrong interpretation of users need. The risks of an Misinterpreted need are: Unacceptable purchases Time overrun - product has to be adapted Increased costs - re-work to adapt the product

Question 56

What is the four (4) step process for Managing risks?

Answer 56

Identify the possible risks - Create a list of all the potential risks that might be assoicated with the specification Risks from under- and over-specified and misinterpreted needs are: Insufficient funding - delaying procurement, require a re-tender Impractical Timescales - few responses becuase suppliers are given insufficient time to prepare bid Insufficient market research - not all potential suppliers invited to bid Inapproprate procurement method Unacceptable terms and conditions to suppliers Lack of confidentiality and perceived bias No response

Question 57

What is the four (4) step process for Managing risks?

Answer 57

Assess the risks: The three factors to identify and prioritise risks The impact of the risk if it was to ccur The likelihood of the risk being detected before it causes any damage The likelihood of the risk being eliminated Techniquie for prioritising risks using the three factors is to give each factor a score from 1 to 10 with the scale ranging as follows: 1 (low impact) to 10 (high impact) for the effect the risk could have 1 (high probability) to 10 (low probability) for the likelihood of detecing the risk 1 (low probability) to 10 (high probability) for the likelihood of being able to eliminate the risk once it has been detected and before the impact has taken effect Mutiplying the three scores will give a score between 1 and 1000 for each risk which can be sorted to the value of the score and mitigation activities can start for the highest scores.

Question 58

What are Mitigating actions? and what are the four (4) basic ways to mitigate risks?

Answer 58

Actions taken to lessen the impact of a risk to people or organisations The four (4) basic ways to mitigate risks are: Tolerate the risk - low risk category - if they occure then the impact is low Treat the risk - Take action to reduce the risk Transfer the risk - transferring to another party e.g. isnurance company Terminate the risk - adopt a different part to avoid the risk

Question 59

How to Monitor risks?

Answer 59

Create a risk register which lists: the risk, the date the risk was identified, the owner of the risk, the description of the risk, the assessment of the risk, the action to be taken to mitigate the risk, the date when the risk will be next reviewed

Question 60

What is a Project Initiation Document (PID) and its importance?

Answer 60

A document that sets out the scope of the project and is the mandate from senior managment. It documents the key parts of the project for reference and also act as a vehicle for collecting the necessary approvals. It is very important and should precede any specification writing project. A PID will contain: Background information to the specification, Initial definition and scope of the specification, Any constraints or dependencies, Any assumption made, Outline business case for the specification, Identify the benefits, List the acceptance criteria

Question 61

What are the metrics for Managing projects - production of a specification

Answer 61

Schedule variance - completed by its due date Cost variance - opportunity costs - in terms of time spent Stakeholder satisfaction - ask stakeholder to complete survey

Question 62

What are the steps for monitoring a specification writing project effectively?

Answer 62

Monitoring of the project throughout its life cycle Measuring and Collecting the right data - too much data and over measuring Assign responsibility Identify who should receive monitoring reports Make strong and time bound decision Have open and clear communication Focus on people

Question 63

What are the two ways to regulate specifications?

Answer 63

Standardisation - use of standardised products or service Value analyis and value engineering technique - ensure users receive the highest level of value and cost

Question 64

What are the three levels of Standardisation?

Answer 64

Process standardisation - Standardising products, materials and componets allows a larger quanity of a product to be made at a time which reduces the cost of the manufacture. A significant benefit for a company is the move from a high unit cost environment to a lower unit cost environment of batch production Lean concept (services) - creating more more value for customers with fewer resources which is achieved by standardising processes Product standardisation - a product or service with no variations. Product standardisation reduces costs, reduces the complexity of operations in terms of production processes for products and delivery processes for services e.g. Mc Donald and also improves quality Parts standardisation - simplifying the range of parts or materials used. Use the zero-based approach - e.g. remove everything and only put back what are really required Benefits include: Reduced costs, Increased flexibility, Freeing up of people

Question 65

What is Value analysis?

Answer 65

Value analysis is a systematic process of imporving the value of a product, service or project and is used to determine the value of each component used and find cost reduction opportunities by optimising the components used

Question 66

What is target costing?

Answer 66

Analysis of market price, volume and profit, from which a target production cost is delivered. Target cost is = Sales price - profit

Question 67

What are the four (4) steps of the target costing process?

Answer 67

1. Decide on the selling price market will accept 2. Decide the minimum acceptable profit 3. Deduct profit from selling price to arrive at target cost 4. Project to work out how to reduce current actual costs to target level.

Question 68

What are the three (3) factors to ensure success in target costing?

Answer 68

Targets must be valid - based on reliable financial data & costs Targets should be achievable Function requirements must be defined unambiguously & stated publicly - reduce risk of cost target being met by reducing quality

Question 69

What is the process for carrying out value analysis

Answer 69

Gather information Carry our functional analysis - Functional Analysis (FA) Analysis of the relationship between product functions, their perceived value to the customer and their cost provision Primary functions - reason for existence Secondary functions - things product can do in addition Quality Functional deployment- Pugh analysis Transform the voice of the customer into engineering characteristics for a product Be creative - having an abundance of ideas that are more than just superfical changes Evaluate - ORAPAPA: Opportunities, Risks, Alternative & improvements, Past experience, Analysis, People, Alignment & ethics Develop

Question 70

What is value engineering?

Answer 70

An approach used to optimize project life cycle costs, save time, increase profits, improve quality, expand market share, solve problems, and/or use resources more effectively - used for new products and services

Question 71

Explain the Kano model

Answer 71

The Kano model is a simple method of deciding which functions a new product or service should have. It identifies five (5) types of requirement: Attarctive requirement One-dimensional or performance requirements Mandatory requirements Indifferent requirements Reverse requirements