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CIPS L4M1 EXAM STUDY GUIDE SUMMARIZED AND VERIFIED
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CIPS L4M1 EXAM STUDY GUIDE SUMMARIZED AND VERIFIED
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CIPS L4M1 EXAM STUDY GUIDE SUMMARIZED AND VERIFIED1. Stakeholders In any activity an organization undertakes, whether strate-
gic, operational or tactical, the activity can only be suc-
cessful with the input, commitment and support of its
key stakeholders. Gaining and maintaining the support
and commitment of stakeholders requires a continuous
process of engaging the right stakeholders at the right
time and understanding and managing their expectations.
2. Global Supply a dynamic worldwide network when a company purchas-
Chains es or uses goods or services from overseas. It involves
people, information, processes and resources involved in
the production, handling and distribution of materials and
finished products or providing a service to the customer.
3. Whole Life Cost- takes into account the total cost of a product or service
ing over its lifetime, from concept through to disposal in-
cluding purchase, hire or lease, maintenance, operation,
utilities, training and disposal. It is important for procure-
ment to take all these elements into consideration when
making decisions and comparing the costs of buying,
renting or leasing equipment particularly. In most cases
the purchase costs are only a small proportion of the cost
of operating it.
4. Stakeholder A systematic way to identify the expectations, needs,
mapping importance, and relative power of various stakeholders.
5. Value Generation Creating value from the supply base can be achieved by
not only focusing on price but also increasing operational
performance, driving efficiencies, working collaboratively
or developing continuous improvement activities.
6. Procurement Cy- the cyclical process of key steps when procuring goods or
cle services.
7. Steps of the Pro- 1. Understand Need and develop High level Spec.
curement Cycle 2. Market/Commodity and options (inc make or buy as-
sessment).
3. Develop Strategy/plan
, CIPS L4M1 EXAM STUDY GUIDE SUMMARIZED AND VERIFIED
4. Pre-procurement market test and market engagement.
5. Develop documentation, PPQ/detailed spec/combine
with 1.
6. Supplier selection to participate in ITT/RFQ/negotia-
tion.
7. Issue ITT/RFQ.
8. Bid/Tender Evaluation and validation.
9. Contract award and implementation.
10. Warehouse logistics and receipt.
11. Contract performance review and continuous im-
provement.
12. SRM and SC management and development.
13. Asset management/end of life and lessons learnt.
8. Contract Man- delivers a great amount of data and intelligence that sup-
agement port the smooth running of a business. Historically, the
purpose of a contract as a legal document was to protect
the parties from negative consequences of its breaches.
Today, when companies are facing increasing pressures
to reduce costs and improve financial and operational
performance, forming and managing new trading rela-
tionships is critical for success. How well an organisation
manages its relationships with partners defines the two
core elements of bottom line performance: increasing rev-
enues and decreasing costs .... plays an important role by
ensuring the smooth running of operations, protecting the
organisation from risks and shaping the buyer-supplier
relationships (Aberdeen Group, 2007; Saxena, 2008).
9. Application of E-Procurement systems can be utilised in the Request
Technology for Information (RFI), Request for Proposal (RFP) and
Request for Quotation (RFQ) process as well as for e-Ten-
dering, e-Auctioning, vendor management, catalogue
management, purchase ordering, order status, shipment
status, e-invoicing, e-payment and contract management.
10. eSourcing / ePro- relates to the electronic procurement of products or ser-
curement sys- vices via the internet. Other systems such as electronic
tems P2P
, CIPS L4M1 EXAM STUDY GUIDE SUMMARIZED AND VERIFIED
data interchange (EDI) and enterprise resource planning
(ERP) are also forms of...
11. International The only tripartite U.N. agency, since 1919 it brings to-
Labour gether governments, employers and workers of 187 mem-
Organisation ber States , to set labour standards, develop policies and
devise programmes promoting decent work for all women
and men.
12. Supplier evalua- is conducted at the tender stage and can be in the form of
tion & appraisal either a questionnaire, interview or site visit to assess the
supplier's capability in terms of capacity, financial stability,
quality standards, performance and organisational struc-
ture and processes in place. Both existing and potential
suppliers are scored on suitability and either approved or
rejected to be added onto the approved supplier list (ASL).
This helps to improve existing suppliers performance and
also can periodically ensure you have the right sized and
fit of suppliers on you approved list.
13. Supplier Selec- is an important organisational process: purchased prod-
tion ucts represent between 40% and 60% of end product
sales and have a direct impact on the cost and quality
of products. In addition, even a small cost gained by se-
lecting a good supplier can have great impact on benefits
(Aiter et al., 2011).
It relies on multiple assessment techniques which include
both quantitative and qualitative methods (Choi and Hart-
ley, 1996). At the same time, many organisations continue
to select suppliers based on experience and intuition -
selective and unreliable approaches (Kontio, 1996). The
most common evaluation criteria used to select suppliers
are: financial health, expertise, operational performance
metrics, business processes and practices, enabling be-
haviours or cultural factors and risk factors (Aiter et al.,
2011).
14. eSourcing automates contract lifecycle management (CIPS: Elec-
tronic Commerce and e-Business). Today, eSourcing and
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