Comprehensive and Detailed Explanation (paraphrased from CIPS L4M2 content)
CIPS L4M2 warns against over-specification – defining requirements in more detail, higher quality, or tighter tolerances than are actually needed. Key consequences include:
Increased costs – suppliers incur higher production and quality costs, which are passed on to the buyer.
Fewer potential suppliers – only a small number can meet the demanding specification.
More complex supplier relationships – closer collaboration and management may be needed to meet the demanding spec.
Assessing each statement:
Ineffective SLA – if the specification is unnecessarily detailed or unrealistic, SLAs can become difficult to meet, overly complex, or focused on the wrong priorities. Likely outcome.
Higher supplier costs – very clearly a result of over-specification (tight tolerances, special materials, complex processes).
Increased SRM – when the requirement is demanding and fewer suppliers can comply, buyers often need more intensive SRM to manage performance and risk.
Reduced inventory costs – this is not a typical outcome of over-specification; if anything, higher unit costs and longer lead times can increase inventory risks and carrying costs.
Thus 1, 2 and 3 are in line with CIPS treatment of over-specification; 4 is not, so:
Correct option: C (1, 2 and 3 only)
Relevant CIPS L4M2 areas:
Dangers of over-specification (cost, risk, supplier base)
Service Level Agreements and realistic performance measures
The role of SRM in managing complex or high-dependency suppliers
