Requirements Definition

•  Define Spiral 1 Requirements

o  Collect requirements from stakeholders. This information can be obtained from MAJCOMs, bases, and contingency units. A lesson learned is to include a "major" user representative on the commodity council. If one or more users participate in the forecasting process, accuracy increases.

o  Develop customer-approved demand forecast based on the requirements information. Often this will consist of a conversation with requirements owner determining if they anticipate the same volume or higher/lower? Double/half? 50% higher/lower? Sometimes requirement owners will have a separate system to track anticipated demand. Other times teams will need to rely on conversations. Teams should not focus on obtaining 100% accuracy.

o  Establish cost estimate for demand forecast. To estimate cost, multiply the current price by the estimated inflation rate, and then multiply that by the forecasted quantity required. The end result provides the estimated total cost. The estimate total cost provides important information for the development of strategic sourcing decisions. Consider quantity discounts as well as learning curves. These factors may have a significant impact on the average price over time.

o  Develop standards for the requirements to minimize costs and effort, if appropriate

o  Analyze projected funding against demand forecast. Determine the portion of the demand plan that can be satisfied within the funding constraints based on cost estimate and within any supplier capacity constraints.

o  Validate spend plan with stakeholders. Engage the stakeholders in discussions about requirements funding. Can command buys be consolidated once a quarter? Can buys be coordinated with other users to enable spend leveraging?