L4M1 Chapter 2: Key steps when procuring goods or services|| 50 QUESTIONS & CORRECT SOLUTIONS
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Course
CIPS L4M1
Institution
CIPS L4M1
What added value do structured procurement processes provide? - ANSWER Consistent best practice, less scope for laws and regs deviance, reduced opp for duplicated effort, faster procurement
Advantages of formal, systematic approach to structuring processes and procedures (8) - ANSWER Coordinatio...
L4M1 Chapter 2: Key steps when
procuring goods or services|| 50
QUESTIONS & CORRECT SOLUTIONS
What added value do structured procurement processes provide? - ANSWER Consistent best practice,
less scope for laws and regs deviance, reduced opp for duplicated effort, faster procurement
Advantages of formal, systematic approach to structuring processes and procedures (8) - ANSWER
Coordination of effort and collaboration between parties; process and outcomes consistency; prevents
conflict (reference point); mandating most efficient approach; good governance and managerial control;
compliance with standards, laws ands regs; documentation / sharing good practice.
CIPS Procurement Cycle (Sourcing / Pre-contract) stages (9) - ANSWER 1. Understand need, high level
spec 2. Market / commodity options, make or buy 3. Strategy 4. Pre-proc, market test and engagement
5. Develop documentation 6. Supplier selection to participate in ITT / RFQ 7. Issue ITT / RFQ 8. Evaluation
and validation 9. Contract award and implementation
STAGE 1 - Purpose and value of specification (5) - ANSWER Encourage accurate bids; communicate
expectations; fair bid evaluation; supplier performance measurement; generate competition
STAGE 2 - Supplier Appraisal, evaluation or pre-qualification - ANSWER Formal, systematic approach to
collecting information and identifying capable suppliers.
STAGE 2 - Possible sources of information about potential suppliers (5) - ANSWER Supplier databases;
catalogues (e-catalogues) and websites; trade/industry magazines and procurement journals; Trade fairs
and conferences; Procurement professional networking
STAGE 2 - Make (do) or Buy decision - ANSWER Internal competence availability and capacity low = buy,
if internal competence availability and capacity low = buy
, STAGE 2 - Key reasons for an organisation making a product or performing a service (5) - ANSWER Value
(extracting resources otherwise inactive); potential to reduce lead time; control (quality and production);
confidentiality (production); Supply risk (unreliable suppliers for essential items).
STAGE 2 - Why is the procurement function in a good position to add value through assessing Make or
Buy? (5) - ANSWER Supply market familiarity, supplier evaluation and selection, price negotiation, service
quality and spec, contract and relationship management.
Long-term benefits of direct negotiation (2) - ANSWER Long-term partnership with suppliers, improved
understanding of technical development in supply market
Drawbacks of direct negotiation (2) - ANSWER Product or service designed around supplier capabilities
(limiting and supplier lock-in), Supplier complacency (quality or innovation)
Post contract activities - ANSWER 9. Contract award and implementation (advise winner before
unsuccessful) 10. Warehouse logistics and receipt 11. Contract performance review and continuous
improvement (KPI) 12. SRM and SCM, development (Kraljic matrix) 13. Asset management/end of life,
lessons learned
Stage 10 - warehouse and logistics (receipting): What are the four questions should be asked in this
process? - ANSWER 1. Do all products need to be checked for conformance to quality standards? 2. Do
all products need to be unpacked? 3. Do all products need to be counted prior to being located in the
warehouse? 4. Do all products need to be scanned for barcodes?
Stage 12 - SRM and SCM differences - ANSWER SRM with specific relationship / supplier, SCM with the
supply chain tier
Why is SRM an important part of SCM? - ANSWER SRM reviews portfolio of suppliers to devote right
level of input in relationships (kraljic) to achieve specific objectives (proportionately).
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