What is a Specification?

Every industry that makes a product needs specifications: food & beverage, beauty & cosmetics, CPG, medical device, automobile, and many other industries all rely on specifications. A specification, or spec, is one of the most business critical aspects when it comes to making products. Specifications dictate what’s in the products we use, how they’re produced, and essentially, whether or not the product will meet the needs of target consumers. 

Defined, specifications are the granular data and instructions that go into the production of items we use every single day. Specifications include everything from raw materials, ingredients, formulas, packaging, labels, and even machinery. Modern supply chains have tens of thousands of specification data points. But what does this really mean? 

Imagine your favorite smoothie. What do you need to make it? You need ingredients, the recipe, a glass, and a blender, which are all specifications of the product, your smoothie. Now think of something a bit more complex, like the computer you’re currently using. What goes into the production of that? Aside from the parts necessary to make a computer, specifications also include any directions or methods needed for successful production, such as tools or machines that are used in the manufacturing process. 

Why are Specifications Important?

If you ask a manufacturer to produce something for your company without providing them with exactly what you want via specifications, you’ll likely get something different. Going through multiple iterations of production forces projects to be over budget and behind schedule, inhibiting the growth of the company as whole.

Thinking about specifications from a business perspective, CPG companies typically have an abundance of specifications for any given product they carry, which includes both the product and its packaging. Specs influence millions of dollars in the CPG industry – consider what happens to production without specs. Companies can experience product variation, material waste, loss of consumer trust, the list goes on. Well-managed specifications enable consistent quality that builds brand loyalty and gives companies the space to innovate, rather than focusing on correcting current processes.

Who Uses Specifications?

Specifications function as the communication vehicle that contractually binds internal and external stakeholders in agreement of the expectations of the final product. Internal stakeholders, such as engineers, product developers, and graphic designers are able to utilize specifications as formal documentation in which they can explicitly state the technical details of the product, ensuring what they want out of the production cycle is effectively communicated. Other internal departments such as purchasing need specifications to procure materials. Quality teams need specifications to compare what’s coming off the product line to see if it meets the criteria. 

External stakeholders, such as suppliers, manufacturers, and distributors use the specifications they’re given as a production map, guiding them to deliver what is asked with quality and precision. If there is an issue, specifications are referenced by all parties involved and variance in specifications can create challenges when it comes to accountability. 

How Most Specifications are Managed Today

Specifications have become a bit of an enigma, as they’re supposed to free internal and external stakeholders from the confusion and ambiguity that often surrounds production by bridging gaps in communication. However, without proper management of specifications, it’s impossible to use them to their fullest potential.

Current methods of specification management include spreadsheets, PDFs, Enterprise Resource Planning systems (ERPs), home grown databases and even pen and paper. These legacy systems frequently cause issues because, frankly, they weren’t built to manage the granular data in specifications and the relationships between them. These issues often result from a lack of version control, which can result in both internal and external stakeholders not being on the same page. 

Companies using these systems often find themselves emailing spreadsheets and PDFs back and forth, struggling to update all stakeholders when a change has been made, or scrambling to find that one piece of paper that was “just on the desk a second ago!” These challenges have been compounded by SKU proliferation. As the number of products companies manage continues to grow, these outdated methods of managing specifications makes it difficult to scale.  

To take control of specifications, companies need a single source of truth that can be accessed by stakeholders across and outside of their organization. This need has led to a rise of a new category of software – specification management. 

The Rise of Specification Management

The reality is that companies have been making products for hundreds of years. So why has it taken so long for companies to adopt a specification management approach? The answer is that major trends have created a need for specification management. 

Globalization, SKU proliferation, and changing consumer tastes have led to an explosion of specifications. For example, it was easy when a soda company had one bottle and one can and one label to manage. Now, there are tens of different flavors, various packaging sizes, and languages that have made this data impossible to manage using legacy systems. 

No industry is immune to these changes but the most impacted are typically food & beverage, beauty and cosmetics, and consumer goods companies. In fact, companies are realizing that when they go beyond the bill of materials and manage their supply chain at the specification level, they can unlock tremendous benefits. Benefits range from procurement saving, faster speed-to-market, and more sustainable products and packaging. 

Manage Specifications with Specright

Specright eradicates the inefficiencies of legacy systems, giving companies better insight into their supply chain, streamlining communication, and centralizing master product and packaging data. 

Companies are able to house all of their data on a single platform that can be accessed by approved stakeholders, effectively reducing costly errors. Learn more about Specright’s specification management platform.