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CIPS M4L8 (Procurement and Supply) CHAPTER 1 STUDY GUIDE.
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CIPS M4L8 (Procurement and Supply) CHAPTER 1 STUDY GUIDE.
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CIPS M4L8 (Procurement and Supply) CHAPTER1 STUDY GUIDE.
The Invitation to tender should contain everything potential bidders will
need to know to fully understand the need and to prepare and send
suitable response. An ITT is likely to include the following
✔✔- Opening letter/brief
- Company details
- Overview of project
- Non-disclosure agreement (NDA)
- Specification of the requirement (including any KPIs or SLAs unless using
negotiated or competitive dialogue)
- Evaluation criteria
- Submission date
- Compliance requirements
- Bid style eg, email, through a portal, mail
- Contact details for queries
- Terms and conditions of contract
Tendering is a legal process and the procedure is based on fairness and
equality. Sending the invitation to tender is simple but the following rules
must be followed in all cases
✔✔- Provide the documents to all potential suppliers at the same time
- Provide exactly the same documents to all suppliers
The tendering process: Stage 5 Evaluate bids: The evaluation process is
usually carried out by a cross-functional team to guarantee complete
fairness and ensure that the chosen bid is fit for purpose in all areas.
,Evaluation considers the following aspects of the bid
✔✔- Supplier organisation
- Price
- Quality
- Ethics
- Sustainability
- Risk
- Payment terms
- Disposal
- Service levels
- Location
- Warranties
The tendering process: Stage 7: Contract management
✔✔During the contract, performance should be evaluated against the
criteria in the ITT. Contract management reduces the risk by spotting
defects or performance issues early
Which four procurement cycle stages happen after the award of the
contract?
✔✔- Warehouse/logistics
- Contract management
- Relationship management
- End of life/asset management
Supplier relationship management involves considering the following
✔✔- Behaviour
,- Culture
- Communication
- Collaboration
- Forecasting
- Transparency
There are no set rules about how a buyer should behave in all situations
as each relationship is slightly different. However, good behavioural
practice includes the following
✔✔- Good listening
- Empathy
- Open-mindedness
- Honesty
Relationship life cycle
✔✔- Pre-relationship stage
- Development stage
- Maturity stage
- Decline stage
Communication is key to supplier management. Communication includes
the following
✔✔- Face-to-face interaction
- Telephone
- Body language
- Active listening
, By forecasting requirements a buyer can foster a collaborative relationship
and so help with supplier management. Suppliers who are aware of future
demands can make plans and so are more likely to meet the buyers
requirements than if purchase orders are raised with little notice. For a
supplier, accurate forecasting can allow them to do the following
✔✔- Secure materials
- Obtain economies of scale
- Plan production
- Budget effectively
- Evaluate risk
Open book costing
✔✔A process where the buyer and the supplier are aware of each others
costs and required profits
Effective supply management can have the following benefits
✔✔- Enhanced control
- Reduced risk
- Continuous improvement
There are many ways to conduct supplier management, such as
✔✔- Credit checks
- Key performance indicators (KPIs)
- Service level agreements
- Regular reviews
- Audits
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