What is a performance specification?

A performance specification is indeed focused on outlining what the product or service is intended to do or achieve. It sets clear criteria for the expected performance and functionality of the product or service, providing essential guidelines that suppliers or contractors must meet. This type of specification is crucial in procurement and supply management because it ensures that the final output aligns with the buyer's needs and quality standards, without dictating how those outcomes should be achieved.

Establishing these performance criteria allows organizations to assess potential suppliers based on their ability to meet these specific requirements, leading to more informed sourcing decisions. By concentrating on the 'what' rather than the 'how,' performance specifications foster innovation and flexibility among suppliers, enabling them to propose solutions that may exceed basic specifications while still aligning with the desired outcomes. This approach ultimately drives better results and value for the organization.