L4M1 Scope and Influence of Procurement and Supply Lesson Plan

Diploma in Procurement
and Supply
Module (L4M1)
Scope and Influence of
Procurement and Supply
Leading global excellence in procurement and supply

Learning outcomes
Further reading
Session introduction
Activities
Case study, questions, etc
Session summary
CIPS Global Standard for Procurement and

Supply
Segments: 1.1, 1.2, 1.3, 3.1, 3.2, 4.1, 6.1, 6.2,
7.1, 8.1, 11.1
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or transmitted in any form or by any means, in whole or in part, without the prior written permission of CIPS. 1

Module Content Overview
This is a core module in the Diploma in Procurement and Supply
Module purpose: On completion of this module, learners will be able to identify the key stakeholders in the
application of the sourcing process and analyse the procurement cycle, evaluating the influence that
procurement and supply has as a source of added value for the organisation.
Module aims: In any organisation, a significant proportion of costs are accounted for by the purchases of
products and/or services, hence organisations see procurement and supply as a key contributor to their value-
added strategies. Equally, any organisation will also be managing the supply of products and/or services to
their customers, be they internal or those from other external organisations, consumers or the general public.
This module is designed using the CIPS Procurement Cycle as its basis. It will provide those who are interested
in developing an informed awareness of different perspectives or approaches within the discipline, an
overview of the key stages associated with procurement and supply and will serve as an introduction for
those who are expected to address complex well-defined procurement and supply problems that are non-
routine in nature.
The module also serves as the initial study for learners who are embarking on the CIPS Level 4 Diploma in
Procurement and Supply, hence coverage is limited to the definition of concepts and ideas as well as to the
terminology used in procurement and supply, rather than detailed analysis, evaluation and practical
application which will be a feature of later CIPS level 4 modules.
Final overall knowledge and skills: the holder of the Diploma in Procurement and Supply will
demonstrate:
Knowledge Descriptor (the holder….) Skills Descriptor (the holder will….)

Has practical, theoretical or technical knowledge and Identify, adapt and use appropriate cognitive and
understanding of a subject or field of work to address practical skills to inform actions and address
problems that are well defined but complex and non- problems that are complex and non-routine
routine. while normally fairly well-defined.
Can analyse, interpret and evaluate relevant information Review the effectiveness and appropriateness of
and ideas. methods, actions and results.
Is aware of the nature of approximate scope of the area
of study or work.
Has an informed awareness of different perspectives or
approaches within the area of study or work.

Module Learning Time
In arriving at a final number of learning hours, CIPS applies the TQT Criteria 1 (equal to 10 x credit value
rounded to nearest whole number) and split learning hours for each module into:
• Guided Learning Hours (GLH): which CIPS define as a measure of the amount of input time required
to achieve the qualification. This includes lectures, tutorials and practicals, as well as supervised study
in, for example, learning centres and workshops. GLH also includes the time required for learners to
complete external assessment under examination or supervised conditions.
• Self-Study Requirement (SSR): which CIPS define as other required learning as directed by tutors will
include private study, preparation for assessment and undertaking assessment when not under
supervision, such as preparatory reading, revision and independent research and wider reading of the
subject areas.
For this module:
• 12 Credits
• Module Learning Time (inc assessment) = 120 hours
• GLH = 50 hours
• SSR = 70 hours
• Assessment = 3 hours
Assessment
• Constructed Response Exam – 3 hours

• Pass mark – 50 %
1
Ofqual: Total Qualification Time criteria Condition E7 available at: https://www.gov.uk/government/publications/total-
qualification-time-criteria

Learning outcomes, assessment criteria and
indicative content
Learning outcomes help to define the scope, style and depth of learning within a module. Delivery
organisations, tutors and learners can see where development should be taking place and the areas and
disciplines that should be actively researched and/or reviewed during the associated study. The student will
be assessed against each learning outcome during the final assessment.
Assessment criteria are the key areas that will be assessed on the module. Learners and delivery
organisations and tutors should have these in mind during study and CIPS assessors will utilise them during
the final writing and marking of assessments.
Indicative content is an indication of the key areas that should be covered during the modular learning. This
should not be regarded as an exhaustive list and delivery organisations and tutors are encouraged to include
more content by way of regional cases and/or examples. Similarly, learners should not see this as a final
listing and should be encouraged to develop their knowledge through further reading around the indicative
areas of content.
Module Content Overview

Learning outcomes, assessment criteria and indicative content
Understand and analyse the added value that can be achieved through
1.0 Session Chapter
procurement and supply chain management
1.1 Describe the categories of spend that an organisation may purchase
• Definitions of procurement and purchasing and supply 1 1
• Typical breakdown or organisational costs represented by procurements
1 1
of goods, services or constructional works
• Stock and non-stock procurements 1 1
• Direct and indirect procurements 1 1
• Capital purchases and operational expenditures 1 1
• Services procurements 1 1
1.2 Analyse the different sources of added value in procurement and supply
• The five rights of procurement 1 1
• Defining total life cycle costs or the total costs of ownership 1 1
• Achieving quality, timescales, quantities and place considerations in
1 1
procurements from external suppliers
• Other sources of added value such as innovation, sustainability and
1 1
market development
• Defining value for money 1 1
1.3 Compare the concepts of procurement and supply chain management
• Definitions of procurement, supply chains, supply chain management and
2 1
supply chain networks
• Comparisons of supply chain management with procurement 2 1
• Complex Supply Chains 2 1
• Definitions of logistics and materials management 2 1

Differentiate the stakeholders that a procurement or supply chain function
1.4
may have
• Defining stakeholders 2 1
• Examples of stakeholders for a procurement or supply chain function 2 1
• Mapping stakeholders for a procurement or supply chain function 2 1
2.0 Understand and analyse the key steps when procuring goods or services Session Chapter
2.1 Explain the key aspects of the Procurement Cycle
• The CIPS Procurement Cycle defining the stages of a generic sourcing
process from identification of needs to contract award and 3 2
implementation and end of life disposal
• Differentiating between pre-contract award and post contract award
3 2
stages
2.2 Analyse the key stages of a sourcing process
• Stages of the sourcing process that relate to defining needs, creation of
contract terms, supplier selection, contract award and contract or 3 2
supplier management
• The purpose and added value that is created by each of the stages of the
3 2
sourcing process
Explain how electronic systems can be used at different stages of the
2.3
sourcing process
• E- requisitioning, e-catalogues, e-ordering, e-sourcing and e-payment
4 2
technologies
• The impact of electronic purchase to pay (P2P) systems on the sourcing
4 2
process
Analyse the relationship between achieving compliance with processes and
2.4
the achievement of outcomes
• Organisational needs for structured sourcing processes 4 2
• The relationship between process compliance and the achievement of
4 2
added value outcomes
Understand and analyse the key aspects of organisational infrastructure
3.0 Session Chapter
that shape the scope of a procurement or supply chain function
Explain key aspects of corporate governance of a procurement or supply
3.1
chain function
• Conflicts of interest 5 3
• The need for documented policies and procedures for procurement 5 3
• Organisational accountability and reporting for procurement roles and
5 3
functions
• The status of procurement and supply chain management within
5 3
organisations
• Codes of ethics in procurement 5 3
• The CIPS Code of Conduct 5 3
Analyse the impact of organisational policies and procedures on
3.2
procurement
• Aspects that can be included in procedures for procurement and supply
such as responsibilities for procurement, regulations relating to
6 3
competition, levels of delegated authority, responsibilities for the stages
of the sourcing process, invoice clearance and payment
• The use of procurement policies, procurement strategies and 6 3

procurement manuals
• The involvement of internal functions and personnel in the sourcing
6 3
process
• Responsible Procurement and the International Labour Organisation core
6 3
conventions
3.3 Examine the different structures of a procurement or supply chain function
• The use of centralised and devolved structures 7 3
• Hybrid structures of a procurement or supply chain function (such as
consortium structures, shared services, lead buyer structures, and 7 3
outsourced) Interacting with people and building rapport
• The need for customer service and value for money outcomes 7 3
Explain the common IT systems that can be used by a procurement or
3.4
supply chain function
• P2P systems 7 3
• Systems for inventory management 7 3
• Enterprise Resource Planning (ERP) technologies 7 3
• Communications systems for internal and external use 7 3
Understand and analyse the need for compliance with requirements when
4.0 Session Chapter
undertaking procurement activities in different sectors
4.1 Classify different economic and industrial sectors
• Economic classifications including Public and Private Sectors, charities,
8 4
not-for-profit and Third Sector
• Industrial classifications and sectors such as manufacturing, retail,
8 4
construction, financial, agriculture and service
Analyse the impact of the Public Sector on procurement or supply chain
4.2
roles
• Objectives of Public Sector organisations such as improving services,
8 4
communities and corporate social responsibility
• Regulations that impact on procurement and supply chain operations 8 4
• Need for competition, public accountability and value for money 8 4
Examine the impact of the Private Sector on procurement or supply chain
4.3
roles
• Objectives of Private Sector organisations such as profitability, market
9 4
share, shareholder value and corporate social responsibility
• Regulations that impact on procurement and supply chain operations 9 4
• The importance and role of branding 9 4
Examine the impact of the not-for-profit or Third Sector on procurement or
4.4
supply chain roles
• Objectives of the not-for-profit or Third Sector 9 4
• Regulations impacting on charities 9 4
• Need for regulated procurement exercises 9 4
Final module recap and discussion
10 1, 2, 3, 4

Diploma in Procurement and Supply
Module L4M1 – Scope and Influence of Procurement and Supply
Session 1
Understand and analyse the added value that can be
Assessment Criteria
achieved through procurement and supply chain
1.1, 1.2
management
Understand and analyse the added value that can be achieved through procurement and
supply chain management
• Describe the categories of spend that an organisation may purchase
• Analyse the different sources of added value in procurement and supply
CIPS Global Standard for Procurement and Supply

Segments: 1.1, 1.2, 1.3, 3.1, 3.2, 4.1, 6.1, 6.2, 7.1, 8.1, 11.1
Describe the categories of spend that an organisation may purchase

• Procurement involves something which may be tangible (i.e. goods) or intangible
(i.e. services)
• The procurement process begins by identifying a need and is completed once the
goods or services that meet the need are delivered
• Procurement is a strategic function of a business and involves high level of skill
• Procurement takes place in almost all organisations; everything that needs sourcing
and buying for an organisation involves procurement. Therefore, the costs of an
organisation can be linked to procurement
Analyse the different sources of added value in procurement and supply

• Added value in monetary and general business sense takes into account all the costs
that contribute towards making the product or service
• Added value in procurement can be added in a variety of ways.
Describe the categories of spend that an organisation may purchase:
Definitions of procurement, purchasing and supply (cover each of the following using
examples to illustrate advantages and disadvantages and their typical uses – use locally
based examples wherever possible and where each would be typically used or appropriate
and their characteristics)
• Procurement elements:
o Added value
o Cost
o Inventory

o Logistics
o Purchasing (ordering and expediting)
o Quality
o Supply (delivery)
o Waste management
Typical breakdown of organisational costs represented by procurements of goods, services

or construction works (cover each of the following using examples to illustrate advantages
and disadvantages and their typical uses – use locally based examples wherever possible and
where each would be typically used or appropriate and their characteristics)
• Fixed
o Examples
• Variable
o Examples
• Direct
o Examples
• Indirect
o Examples
• Typical costs to an organisation
• The role of the procurement department (their influence upon costs within an
organisation)
o Capital purchases and insurance
 Evaluate potential suppliers
 Be involved in preparing specifications
 Review quality and standards
 Assess ethical requirements
 Compare buy or lease options
 Investigate transport
 Review packaging options
 Research total life cost
 Calculate currency differences
 Benchmark process
 Ensure assets are ‘fit for purpose’
o Marketing
o Raw materials (i.e. inventory and economies of scale)
o Research and development (R&D)
o Salaries
o Sundries
o Training
o Vehicles, transport and haulage
Stock and non-stock procurements (cover each of the following using examples to illustrate
advantages and disadvantages and their typical uses – use locally based examples wherever

possible and where each would be typically used or appropriate and their characteristics)
• Stocked procurements (linked to inventory costs)
o Raw materials (primary sector products)
o Components (secondary sector products)
o Finished goods
o Examples of each
• Non-stocked procurements (not stored within an organisation, i.e. one-off or capital
purchases)
o May be intangible (i.e. clearing service. Internet contract, belonging to
tertiary sector)
• The Procurement Cycle – followed for both stock and non-stock procurements
o Also covered later in Chapter 2
Direct procurements (cover each of the following using examples to illustrate advantages
• Directly related to a specific job (i.e. raw materials) and integral to an organisation
• Use of Kraljic Matrix to understand supplier relationship categories and risks
associated with each type of procurement
o Leverage suppliers
o Strategic suppliers
o Routine suppliers
o Bottleneck suppliers
Indirect procurements (cover each of the following using examples to illustrate advantages
• Often sourced from several different suppliers
• Use of Kraljic Matrix to understand supplier relationship categories and risks
associated with each type of procurement
o Leverage suppliers
o Strategic suppliers
o Routine suppliers
o Bottleneck suppliers
Capital purchases and operational expenditures (including the differences) (cover each of
the following using examples to illustrate advantages and disadvantages and their typical
uses – use locally based examples wherever possible and where each would be typically
used or appropriate and their characteristics)
• Organisational budgets
o CAPEX – capital purchases
o OPEXX – operations expenditure
• Capital purchases – an asset of the organisation (‘spending of money with a view to

making money’)
o Depreciation (including cross functional ways of working)
• Operations expenditure
o Rent
o Raw materials
o Wages
o Insurance
o Transport
Services procurements (intangible, i.e. cleaning contracts, insurance, utilities) (cover each of
• Follows the procurement cycle; however, can be harder to manage and evaluate
than tangible items
Analyse the different sources of added value in procurement and supply:
The Five Rights of Procurement (cover each of the following using examples to illustrate
• Price – fair and reasonable
o Currency (if purchasing from overseas suppliers)
o Inclusion of tax (nett or gross price)
o INCO terms (i.e. EXW, FCA, CPT, CIP, DAT)
• Quantity – ensuring that the most cost-effective amount of product or service is
procured to avoid unsatisfactory consequences
o Economies of scale
• Quality – fit for purpose
o Quality standards (i.e. ISO 9000 family)
o Product specification – to ensure that the standard of quality demanded is
met
 Conformance specification – what the product or service will consist
of
• Advantages and disadvantages
 Performance specification – what the product or service is to do or
achieve
• Time – orders and contracts should state the time the order is required to avoid:
o Stock outs
o Additional costs
o Negative impact on supplier relationship
• Place – ensuring that goods or services are delivered to the right place avoids:

o Stock outs
o Non-delivery of goods to customer
o Additional costs
Defining total life cycle costs or the total costs of ownership (cover each of the following
using examples to illustrate advantages and disadvantages and their typical uses – use
locally based examples wherever possible and where each would be typically used or
appropriate and their characteristics)
• Total costs of ownership (TCO) – total costs that will be incurred over the lifetime of
a material or service
o TCA
o Tooling
o Insurance
o Operating
o Maintenance
o Training
o Storage
o Disposal
• Total cost of acquisition (TCA) – the amount of money an organisation has to budget
to physically receive the product or service. Relates to additional associated costs
and forms part of TCO
o To achieve good value for money, the following need to be considered:
 Purchase price
 Quality of product
 Cost of carriage and insurance
 Lead time
Achieving quality, timescales, quantities and place considerations in procurements from

external suppliers (cover each of the following using examples to illustrate advantages and
disadvantages and their typical uses – use locally based examples wherever possible and
• Internal suppliers
• External suppliers
o Key performance indicators (KPIs) – qualitative or quantitative
 Examples
 Benefits and limitations
o Contracts (enforceable in law) – there has to be:
 Intention
 Consideration
 Agreement
 Includes all 5 ‘Rights’ of procurement
 Capacity
Other sources of added value such as innovation, sustainability and market development
(cover each of the following using examples to illustrate advantages and disadvantages and
their typical uses – use locally based examples wherever possible and where each would be
typically used or appropriate and their characteristics) i.e.
• Additional features
• Brand – strong brand identity adds value through:

o Awareness
o Engagement
o Communication
• Convenience
• Excellent service, i.e.
o Attention to detail
o Consideration of buyer’s perspective
o Going beyond the requirement
• Innovation
o Porter’s Five Forces Model
• Market development – finding new markets and acquiring new consumers
• Reduced input costs
• Sustainability – ensuring something is long lasting and not going to cease or
disappear
o Risk minimising and management
 Risk matrix
• Reputation – i.e. ethical values
Defining value for money (cover each of the following using examples to illustrate
possible and where each would be typically used or appropriate and their characteristics) is
the consideration of:
• Currency/exchange rates
• Environmental factors
• Freight costs
• Maintenance costs
• Packaging
• Payment terms
• Place
• Product/service price
• Quality
• Quantitative/inventory
• Supplier reputation
• Time
• Warranty
See final case study for the module

• Discuss key elements within it that demonstrate the key discussion points in this
session of the module
Offer contextual case studies relevant to the region and industrial focus of the area
• Give students the opportunity to apply knowledge to areas of practical interest
relevant to their international region
See short case studies within the associated Chapter of the CIPS Study Guide

See student exercises based on modular learning outcomes
Students should leave this session with an overall appreciation of the key stages and
categories of spend in the procurement process for goods and services within
organisations, exploring the different perspectives and approaches involved. Students
should also understand how to analyse the different sources of added value in order to
achieve the most effective and efficient outcomes

Session 2
Understand and analyse the added value that can be
Assessment Criteria
achieved through procurement and supply chain
1.3, 1.4
management
Understand and analyse the added value that can be achieved through procurement and
supply chain management
• Compare the concepts of procurement and supply chain management
• Differentiate the stakeholders that a procurement or supply chain function may
have

Segments: 1.1, 1.2, 1.3, 3.1, 3.2, 4.1, 6.1, 6.2, 7.1, 8.1, 11.1
Compare the concepts of procurement and supply chain management

• Supply chains are integral to a well-functioning procurement operation
• Supply chains must be managed in order to be effective; this takes skill and may
involve several methods
• A supply chain may be simple or extremely complex
Differentiate the stakeholders that a procurement or supply chain function may have
• Stakeholders are very important to all organisations, regardless of the sector or type
of business
• Stakeholders may be suppliers, customers, consumers (end users) or the local
community
• Stakeholders are integral to procurement
Compare the concepts of procurement and supply chain management:
Definitions of procurement, supply chains, supply chain management and supply chain
networks (cover each of the following using examples to illustrate advantages and
• What is a supply chain?
o Typical supply chains:
 Primary sector
• Examples
 Secondary sector
• Examples
 Tertiary sector

• Examples
• Stages in a supply chain
o Upstream
o Downstream
• Supply chain management
o Value in the supply chain – effective management of:
 Price
 Delivery
 Storage
 Ethics
 Environment
 Sustainability
 Communications
 Quality
o Supply chain networks, including managing flows, designed around:
 External suppliers
 Manufacturers
 Distribution/wholesale centres
 Logistics
 Consumer demand
Comparisons of supply chain management with procurement (cover each of the following
using examples to illustrate advantages and disadvantages and their typical uses – use
locally based examples wherever possible and where each would be typically used or
• Supply chain management and procurement are not the same thing, although they
are inter-related
• Procurement as part of supply chain management
Complex Supply Chains (cover each of the following using examples to illustrate advantages
• Supplier tiering
• Original equipment manufacturer (OEM)
o Examples
Definitions of logistics and materials management (cover each of the following using
• What is logistics?
• Logistics in the supply chain network (inbound and outbound)
• Internal logistics – processes related to getting materials into the desired end state
o Extraction/production
o Manufacturing
o Warehousing/storage
• External logistics

o Distribution
o Transport
o Retail
• Demand planning – knowing what is required and when
• Fleet management – solutions to physically transport goods from one place to
another
• Inventory management
• Materials management – handling, storage, inspection and issuing of raw materials,
components and finished goods
o Materials Requirement Planning (MRP I and II) – electronic system for
scheduling orders, monitoring inventory and managing the production
process
o Enterprise Resource Planning (ERP) – evolution of MRP, including more
functions of an organisation
Differentiate the stakeholders that a procurement or supply chain function may have:
Defining stakeholders (cover each of the following using examples to illustrate advantages
• Any individuals or groups of individuals that have an interest in an organisation
o Internal stakeholders
o External stakeholders
Examples of stakeholders for a procurement or supply chain function (cover each of the
following using examples to illustrate advantages and disadvantages and their typical uses –
use locally based examples wherever possible and where each would be typically used or
• Internal stakeholders
o Colleagues with a ‘need’
o Accounts department
o Company owner
o Manufacturing department
o Stores department
o Quality department
o Sales department
o Transport fleet
• External stakeholders
o Producers
o Shareholders
o Suppliers and external manufacturers
o Banks
o Local community

o Couriers and haulage companies
o Media
o Governments and regulatory bodies
o CIPS
Mapping stakeholders for a procurement or supply chain function (cover each of the
• Assists with managing stakeholders and understanding different levels of authority
and interests
• Mendelow’s stakeholder matrix
o Keep satisfied
o Manage closely
o Minimum effort
o Keep informed

• See student exercises based on modular learning outcomes
Students should leave this session with an overall understanding of the concepts of
procurement and supply chain management. They should also have an appreciation of the
complexity of supply chains and supply chain networks and how to manage them. Finally,
the students should understand how to manage stakeholders and the most appropriate
approach for the different internal and external stakeholders

Session 3
Understand and analyse the key steps when procuring Assessment Criteria
goods or services 2.1, 2.2
Understand and analyse the key steps when procuring goods or services
• Explain the key aspects of the procurement cycle
• Analyse the key stages of a sourcing process

Segments: 1.1, 1.2, 1.3, 3.1, 3.2, 4.1, 6.1, 6.2, 7.1, 8.1, 11.1
Explain the key aspects of the procurement cycle

• The procurement cycle is an important management technique within procurement,
whether procuring goods or services
• The CIPS Procurement Cycle is a comprehensive diagram which shows each stage
relating to the procurement process
Analyse the key stages of a sourcing process
• Sourcing relates to the stages of the Procurement Cycle that deal with the ‘need’
and supplier selection (stages 1-6)
Explain the key aspects of the procurement cycle:
The CIPS Procurement Cycle defining the stages of a generic sourcing process from
identification of needs to contract award and implementation and end of life disposal
typically used or appropriate and their characteristics)
• Stage 1: Understanding the need and develop a high-level specification (this may
take a significant amount of time), should include:
o Description of what is required
o Quantity of what is required
o Delivery time and place of what is required
o Quality of what is required
• Stage 2: Market/commodity and options (make or buy decision); evaluates:
o Economic situation
o Currency fluctuations
o Supply, demand and subsequent price
• Stage 3: Develop strategy/plan
o Types of suppliers to approach

o Evaluation of the competition (Porter’s Five Forces Model)
o Invitation to tender (ITT) or request for quotation (RFQ)
o Differences between ITT and RFQ
• Stage 4: Pre-procurement, market test and market engagement to gain advance
understanding of the market process or trends
o Product life cycle
 Introduction
 Growth
 Maturity
 Decline
• Stage 5: Develop documentation for distribution to potential suppliers; details to
include:
o Description and specification
o Quantity
o Delivery dates
o Service level agreements (SLA)
o Terms and conditions
• Stage 6: Supplier selection to participate in ITT/RFQ negotiation
o Site visits
o Pre-qualification questionnaires (PQQ)
 Company history
 Financial activity
 Insurance
 Membership to professional bodies
 Quality accreditations
 Capabilities
 Health and safety
 CSR policy
 Code of ethics
 Conflict of interest
o Pre-purchase questionnaires (PPQs)
o Request for information (RFI) (Carter’s 10 C’s)
• Stage 7: Issue ITT/RFQ
o Short list of suppliers
• Stage 8: Bid/tender/quotation evaluation – consideration of TCO
• Stage 9: Contract award and implementation
• Stage 10: Warehouse, logistics and receipt – for products
• Stage 11: Contract performance review
o Key performance indicators (KPIs)
• Stage 12: Supplier relationship management (SRM) and supplier contract
management (SCM) and development
o SRM – the management of supplier relationship by buyers
o SCM – the management of contractual performance by buyers
o Kralijc Matrix to help manage supplier relationships
 Strategic product supplier – close management
 Bottleneck product supplier – relatively close management (often
monopolies)
 Routine product supplier – little management
 Leverage product supplier – high value items

• Stage 13: Asset management and lessons learnt
Differentiating between pre-contract award and post contract award stages (cover each of
• Pre-contract award stages – before the contract is awarded
o Understand the need
o Market commodity options
o Develop strategy/plan
o Pre-procurement market test
o Develop documentation
o Supplier selection
o Issue ITT/RFQ
o Bid/tender/quotation evaluation
o Consequences of incorrect pre-contract award
• Post-contract award stages – after the contract is awarded
o Asset management
o SRM and SCM
o Contract performance
o Warehouse, logistics and receipt
o Consequences of incorrect post-contract award
Analyse the key stages of a sourcing process:
Stages of the sourcing process that relate to defining needs, creation of contract terms,
supplier selection, contract award and contract or supplier management (cover each of the
• Defining needs
• Creation of contract terms
o Developing documentation
o PPQ or PQQs
o Offer and acceptance
• Making an offer – response to an RFQ or ITT
• Acceptance of offer
o Unconditional acceptance
o Counter offer
• The supplier’s offer
o Offer details
 Price
 Delivery
 Packaging
 Frequency

 Lead time
 Quality
 Minimum order quantity (MOQ)
 Payment terms
• Express and implied terms
• Service level agreements (SLAs)
• Key performance indicators (KPIs)
o SMART objectives
• Supplier selection
o Public sector approach
o Private sector approach
• Contract award
• Contract or supplier management
o SLAs and KPIs
o Different contract management styles
 Collaborative
 Distributive
The purpose and added value that is created by each of the stages of the sourcing process
• Purpose of each of the stages in the sourcing process
o Understanding needs/developing specification
o Market/commodity and options
o Develop a strategy and plan
o Pre-procurement, market test and market engagement
o Developing documentation and send PPQ or PQQ
o Issue RFQ/ITT
o Contract award
o Warehouse logistics and receipt
o Contract/supplier management
o Asset management/end of life/lessons learned
• Added value in the sourcing process
o Understanding needs/developing specification
o Market/commodity and options
o Develop a strategy and plan
o Pre-procurement, market test/market engagement
o Developing documentation
o PPQ or PQQs
o Issue RFQ/ITT

o Contract award
o Contract/supplier management

Students should leave this session understanding the CIPS Procurement Cycle and the
stages of a generic sourcing process, from identifying a need to contract award,
implementation and end of life disposal. The students should also be able to differentiate
between pre and post contract award stages. They should also have an appreciation of the
purpose and added value that is created by each stage.

Session 4
Understand and analyse the key steps when procuring Assessment Criteria
goods or services 2.3, 2.4
Understand and analyse the key steps when procuring goods or services
• Explain how electronic systems can be used at different stages of the sourcing
process
• Analyse the relationship between achieving compliance with processes and the
achievement of outcomes

Segments: 1.1, 1.2, 1.3, 3.1, 3.2, 4.1, 6.1, 6.2, 7.1, 8.1, 11.1
Explain how electronic systems can be used at different stages of the sourcing process
• Many procurement cycle stages take place electronically
• The theory remains the same even when method of delivery has changed
• E-procurement consists of
o E-sourcing (knowledge, specification, RFQ/tender, negotiation/evaluation,
contract)
o E-purchasing (select/requisition, authorise, order, receive, payment)
Analyse the relationship between achieving compliance with processes and the
achievement of outcomes
 Compliance is about adhering to regulations, following legislation and conforming to
rules
 Processes form an important part of the procurement function to ensure that
compliance is carried out and the outcomes are monitored

Explain how electronic systems can be used at different stages of the sourcing process:
E-requisitioning, e-catalogues, e-ordering, e-sourcing and e-payment technologies (cover

each of the following using examples to illustrate advantages and disadvantages and their
typical uses – use locally based examples wherever possible and where each would be
• Elements of stages of CIPS Procurement Cycle commonly carried out electronically:
o E-requisitioning - raising and receipt of requisitions
o E-catalogues – researching product ranges
o E-ordering and e-sourcing – sourcing
o E-payment – payment
• Electronic procurement
o E-sourcing
o E-purchasing
• E-requisitioning
o Advantages
o Disadvantages
• E-catalogues
o Advantages
o Disadvantages
• E-ordering
o Manual input system
o Automated systems (MRP)
o Advantages
o Disadvantages
• E-sourcing
o E-specification
o E-RFQ/e-ITTs
o E-negotiation
o Preparing an e-contract
o Supplier evaluation
 Criteria
• Reverse and e-auctions
o Reverse auctions
 Suppliers reduce their bid price
 Specifications are simple
 Large and competitive supplier base
 Relatively long lead times
 Stable prices and market forces
 Short term contracts
 Low costs from changing suppliers
 Regular and simple delivery schedule
 High purchase value
 Advantages
 Disadvantages
o E-auctions – takes place between a buyer and a seller on an electronic
platform (i.e. E-bay)
• E-payment
 Final stage of e-procurement

 Any form of transferring funds that does not physically involve an
exchange of money (i.e. bank transfer, debit/credit card, PayPal)
 Advantages
 Disadvantages
 Cryptocurrencies (i.e. Bitcoin and Blockchain technology)
The impact of electronic purchase to pay (P2P) systems on the sourcing process (cover
• Reduced waste
o Lean – 7 areas of waste:
 Motion
 Inventory
 Over production
 Waiting
 Defects
 Over processing
 Transportation
• Automated processes
• Reduced costs
• Faster payments
• Continuous improvement
o Electronic data exchange (EDI), i.e. purchase orders, delivery notes and
invoices
 Advantages
 Disadvantages
• Enhanced relationships
• The impact of e-procurement on the sourcing process
Analyse the relationship between achieving compliance with processes and the
achievement of outcomes:
Organisational needs for structured sourcing processes (cover each of the following using
• Structured sourcing process is important within an organisation
• Organisational processes within sourcing help guide procurement professionals and
protect a business and its reputation by reducing risk and increasing control
o Examples of such processes:
 Ethics
• Human slavery
• Working conditions
• Trafficking

• Bribery
• Coercion
• Conflicts of interest
 Sustainability
• Performance of supplying organisation and likehood of
continued existence
• Environmentally aware supplying organisation, replacing
and natural resources used
• Credit rating score checks
• Consider the market – is there a long-term requirement
• Understanding the culture
 Corporate and social responsibility (CSR)
• CSR policies within an organisation
o Environmental
o Social
o Ethical
The relationship between process compliance and the achievement of added value
outcomes (cover each of the following using examples to illustrate advantages and
• Process compliance
o Effects
• Process non-compliance
o Effects
• Consequences of unsuitable suppliers

Students should leave this session with an overall appreciation of how electronic systems
can be used at different stages of the procurement cycle. They should also understand the
relationship between achieving process compliance and the achievement of added value
outcomes, including the need for and importance of structured sourcing processes from an
ethical, sustainable and CSR perspective

Session 5
Understand and analyse the key aspects of
Assessment Criteria
organisational infrastructure that shape the scope of a
3.1
procurement or supply chain function
Understand and analyse the key aspects of organisational infrastructure that shape the
scope of a procurement or supply chain function
 Explain key aspects of corporate governance of a procurement or supply chain
function

Segments: 1.1, 1.2, 1.3, 3.1, 3.2, 4.1, 6.1, 6.2, 7.1, 8.1, 11.1
Explain key aspects of corporate governance of a procurement or supply chain function

 Structure is a key element within procurement and helps individuals to perform
effectively and achieve their objectives
 A recognised structure provides accountability to the shareholders of an
organisation
 Structures can be in the form of standards, policies and procedures, or the way a
department is set up
 Corporate governance is the system of standards, procedures and policies by which
an organisation is controlled; it is a framework that is created around the
organisation’s values and objectives
 Corporate governance is about making organisations effective, efficient, successful
and their procedures and policies ethical
 Corporate governance aims to direct and control the actions of stakeholders to
ensure that an organisation is not taken advantage of in any unfair way
Explain key aspects of corporate governance of a procurement or supply chain function:
Conflicts of interest (COI) (cover each of the following using examples to illustrate
 Opposing loyalties and multiple interests
 Examples of COI and possible outcomes
 Identifying potential COI
o Disclosure of potential COI (code of ethics)
o 4-D Model to address potential COI
 Disclosure
 Distance

 Delegate
 Disassociate
The need for documented policies and procedures for procurement (cover each of the
• Policies may be based on:
o Organisational objectives
o Legislation
o Regulation
o Standards
 Procedure is the way in which the policy will be carried out or delivered
 Purpose of policy and procedures
o Ensure conformance
o Ensure compliance
o Protect from coercion, bribery or fraud
o Organisational protection
o Continuity of supply
o Promote efficiency
o Promote ethical behaviour
o Provide references
o Assist audit processes
o Aid with legal cases
Organisational accountability and reporting for procurement roles and functions (cover
 The procurement is a strategic function within the organisational structure
 Organisation accountability
o Belbin’s nine team roles:
 Resource investigator
 Team worker
 Co-ordinator
 Plant
 Monitor evaluator
 Specialist
 Shaper
 Implementer
 Complete finisher
o Tuckman’s four stages of team development
 Forming
 Storming
 Norming
 Performing
o Reporting within procurement
 Procurement accountability relates to:

•Conformance to CIPS Code of Conduct
•Compliance with ethical policies
•Conduct supplier appraisals fairly and transparently
•Award of contracts to most suitable and cost-effective
supplier
• Managing spend to keep within budget constraints
• Specifications are representative of the need
• Addressing/reporting potential areas of concern
 Reporting concerns or poor practice
 Reporting budget variances
 Other reporting matters
• Examples
The status of procurement and supply chain management within organisations (cover each
of the following using examples to illustrate advantages and disadvantages and their typical
Codes of ethics in procurement (cover each of the following using examples to illustrate
 Humans rights
 Bribery and coercion
 Fair trade
 The environment
 Main elements of code of ethics
o Values
o Principles
o Personal responsibility
o Compliance
o Reporting (whistle blowing)
 Benefits of ethics for the procurement profession:
o Framework
o Reputation
o Protection
o Focus
o Involvement
o Diversity
The CIPS Code of Conduct (cover each of the following using examples to illustrate
• Promotes ethical processes within procurement and supply through:
o Enhance and protect the standing of the profession
o Maintain the highest standard of integrity in all business relationships
o Promote the eradication of unethical business practice

o Enhance the proficiency and stature of the profession
o Ensure full compliance with laws and regulations

Students should leave this session with an overall understanding of the key aspects of
corporate governance of a procurement or supply chain function. They should also be
aware of and be able to identify possible conflicts of interest and the need for
documented policies and procedures, as well as how and why codes of ethics are
important within procurement, in particular the CIPS Code of Conduct

Session 6
Assessment Criteria
3.2
 Analyse the impact of organisational policies and procedures on procurement

Segments: 1.1, 1.2, 1.3, 3.1, 3.2, 4.1, 6.1, 6.2, 7.1, 8.1, 11.1
Analyse the impact of organisational policies and procedures on procurement

• The impact of policies and procedures is significant
• Policies and procedures are a point of reference, reassurance and guidance to help
individuals keep to the high standards expected within the profession
Analyse the impact of organisational policies and procedures on procurement:
Aspects that can be included in procedures for procurement and supply such as
responsibilities for procurement, regulations relating to competition, levels of delegated
authority, responsibilities for the stages of the sourcing process, invoice clearance and
payment (cover each of the following using examples to illustrate advantages and
• Responsibilities within procurement
o Authority to accept and process orders
 Issues with unauthorised or uncontrolled expenditure (maverick
spend)
o Authority to make decisions
 Responsibility flow charts
• Regulations relating to competition
o Competition policies
 Intellectual property
 Cartels
 Merger control
 Monopolies
o Independent regulatory bodies (i.e. Ofcom, Ofgem)
• Levels of delegated authority and responsibility
o Reporting structures

• Responsibilities for the stages of the sourcing process
• Invoice clearing and payment
The use of procurement policies, procurement strategies and procurement manuals (cover
• Procurement policies are derived from an organisation’s strategy and can include:
o Competition
o Ethics
o KPIs
o Quality
o Supplier appraisal
o Sustainability
o Transparency
• Procurement strategies outline what the procurement department must achieve
and may be based on:
o Achieving cost reductions
o Adding value to the supply chain
o Encouraging local supply
o Environmental issues
o Ethical improvements
o Fair trade
o Just-In-Time (JIT) implementation
o Quality
o Reducing the amount of suppliers
o Sustainability
o May be in response to a significant event and so there is a requirement for
step change
 Lewin Change Model
o Advantages and disadvantages of procurement strategies, policies and
manuals
The involvement of internal functions and personnel in the sourcing process (cover each of
• Typical functions/departments that work towards implementing organisational
strategy:
o Procurement
o Marketing
o Sales
o Finance
o Human Resources
o Operations
o Research and Design
• Reducing risk through clear and cross functional specifications

• Economies of scale
• Changes to the product
• Effect on organisational budgets
Responsible Procurement and the International Labour Organisation (ILO) core

conventions (cover each of the following using examples to illustrate advantages and
• Regulatory body to try to protect against exploitation in the workplace
• ILO tripartite structure enables all parties involved to have an equal voice:
o Employees
o Employers
o Government
• ILO core conventions
o Freedom of Association and Protection of the Right to Organise: 1948
o Right to Organise and Collective Bargaining: 1949
o Forced Labour: 1930
o Abolition of Forced Labour: 1957
o Minimum Age: 1973
o Worst Forms of Child Labour: 1999
o Equal Remuneration: 1951
o Discrimination (Employment and Occupation): 1958

Students should leave this session with an overall appreciation of the international
standards that exist to protect individuals within the supply chain such as the ILO. They
should also understand how these standards contribute towards improving global ethical
behaviour and how organisational policies and procedures are developed and
implemented

Session 7
Assessment Criteria
3.3, 3.4
 Examine the different structures of a procurement or supply chain function
 Explain the common IT systems that can be used by a procurement or supply chain
function

Segments: 1.1, 1.2, 1.3, 3.1, 3.2, 4.1, 6.1, 6.2, 7.1, 8.1, 11.1
Examine the different structures of a procurement or supply chain function

 The structures of a procurement function or supply chain can vary
 Different structures suit different organisations
Explain the common IT systems that can be used by a procurement or supply chain
function
 Within procurement, IT systems are now common place and the use of paper-based
systems is being phased out
 Each organisation has its own bespoke set up for IT and associated processes, but
some of the systems are derived from a common starting point or theory
 IT systems can be used for:
o The entire purchase to pay (P2P) process
o Inventory management
o Enterprise resource planning (ERP)
o To enhance communications
Examine the different structures of a procurement or supply chain function:
The use of centralised and devolved structures (cover each of the following using examples
to illustrate advantages and disadvantages and their typical uses – use locally based
examples wherever possible and where each would be typically used or appropriate and
their characteristics)
 Centralised structure
o The vast majority of all purchasing is done from one central location
o Advantages and disadvantages
 Devolved structure

Various individuals within an organisation are given responsibility for their
o
own procurement
o Advantages and disadvantages
 Hybrid structures of a procurement or supply chain function (such as consortium
structures, shared services, lead buyer structures, and outsourced)
o A mix of centralised and devolved structures
o Examples of hybrid structures within procurement include:
 Consortium structures, i.e:
• Loose
• Voluntary
• Regional
• Profit-making
• Member-owned
• Not-for-profit
 Shared services, i.e.:
• Human resources
• Administration
• ICT
• Finance
• Objectives of shared services:
o Uniformity in policies, procedures and standards
o Continuous improvement
o Cost efficiencies
 Lead buyer structures
• One organisational department takes the responsibility for
the purchasing of a specific product or service (i.e. ICT)
 Outsourcing, can be used to:
• Reduce costs
• Save time
• Enable focus on core competencies
• Reduce staff
• Integrate external expertise into an organisation
 Interacting with people and building rapport
o Interacting with other functions
o Interacting with external customers
o Interacting with stakeholders
 Mendelow’s Stakeholder Management Matrix
 Kraljic Matrix
o Methods of building rapport
 Positive body language
 Make eye contact
 Listen and use positive gestures for emphasis
 Ask questions
 Be empathetic
 Respect all ideas

 Remove preconceptions
 Be honest
 Justify opinions and feedback
 The need for customer service and value for money outcomes
o Achieving good customer service
 Examples
 Maslow’s Hierarchy of Needs
o Value for money
Explain the common IT systems that can be used by a procurement or supply chain
function:
P2P systems (cover each of the following using examples to illustrate advantages and
• Refresh on what a P2P system is and their impact on souring
Systems for inventory management (cover each of the following using examples to
illustrate advantages and disadvantages and their typical uses – use locally based examples
wherever possible and where each would be typically used or appropriate and their
characteristics)
 Holding more inventory than is needed at any time may incur additional costs
 Running out of core products may cause production to stop
 Examples of systems to manage inventory:
o Electronic MRP systems
 Information gathered from Bill of Materials (BOM), Minimum Order
Quantities (MOQ) and lead times
o Just In Time – minimise unnecessary inventory
o Kanban – continuous improvement
 The importance of IT systems in procurement and the supply chain
o Advances in technology
 The internet
 Bespoke software
 Bar codes, scanners and tag readers,
 Artificial intelligence (AI)
o Advantages and disadvantages of IT systems when managing inventory
Enterprise Resource Planning (ERP) technologies – co-ordinates and integrates businesses’

processes and automates back office procedures to enhance efficiency (cover each of the
 Functions of an ERP system:
o Supply chain management
 Requisitions
 Purchase order creation and sending
 Delivery of purchase order

 Invoice payment
 Contract management
 Supplier relationship management (SRM)
 Supplier database
 Supplier evaluation
o Manufacturing
o Human resources
o Project management
o Finance/accounting
o Customer relationship management
 Recent developments
o Remote access
o Cloud based systems
o Social media modules
Communications systems for internal and external use (cover each of the following using
 Communication within procurement contributes towards:
o Agreeing specifications
o SRM
o Customer service
o Conflict resolution
o Expediting
o Supplier performance management
o Contract management
 Email – within procurement and supply chain management is used for:
o Sending specifications
o Sending RFQs or ITTs
o Negotiation
o Requesting samples
o Awarding contracts
o Expediting
o Arranging meetings
o Evaluating KPIs
o Dispute resolution
o General correspondence
 Communication has evolved to be:
o Machine to machine (M2M) communication – Internet of Things (IoT)
 Examples
 Advantages and disadvantages of IT related communications

Students should leave this session with an overall appreciation of the different structures
of a department and factors that influence upon the structure. They should also
understand the importance of good customer service and how to build rapport with
stakeholders whilst sourcing and supplying goods and services and ensuring value for
money is achieved. The students should know what IT systems can be used by
procurement professionals to ensure that standards are met, using IT as a form of
communication

Session 8
Understand and analyse the need for compliance with
Assessment Criteria
requirements when undertaking procurement
4.1, 4.2
activities in different sectors
Understand and analyse the need for compliance with requirements when undertaking
procurement activities in different sectors
 Classify different economic and industrial sectors
 Analyse the impact of the public sector on procurement or supply chain roles

Segments: 1.1, 1.2, 1.3, 3.1, 3.2, 4.1, 6.1, 6.2, 7.1, 8.1, 11.1
Classify different economic and industrial sectors

 There are a variety of sectors within industry; sectors are the way in which
organisations are classified.
 Classification is often how organisations are funded, what their objectives are and
with what products or services they are involved
 Regardless of the sector, there are always regulations that should be followed and
standards that should be achieved
Analyse the impact of the public sector on procurement or supply chain roles
 The three economic sectors all have varying objectives as they are funded through
different means, as such, the investors, contributors or donors need to see different
results
Classify different economic and industrial sectors:
Economic classifications including Public and Private Sectors, charities, not-for-profit and
Third Sector (cover each of the following using examples to illustrate advantages and
 Public Sector
o Owned and controlled by the government
o Purpose is to provide the general public with services that are integral to
their well-being or lifestyle
o Examples of Public Sector organisations
o Funded through taxation
o Privatisation
o Stakeholders in the Public Sector

 Private Sector
o Owned and funded by individuals or enterprises
o Objective is to make a profit
o Examples of Private Sector businesses
o Sole traders
 Examples
o Partnerships
 Examples
o Private limited companies
 Examples
o Public limited companies
 Examples
 Third Sector Organisations (TSO)
o Neither public nor private sector
o Exist to support and promote social, environmental or cultural objectives
o Do not aim to make a profit
o Examples of TSOs
 Charities
 Co-operatives
o Aspects of a TSO
 Goals
 Inclusion
 Speed of delivery
 Resources
 Budget
 Ambience
 Main differences between the three economic sectors
o Ownership
o Funding
o Shares
o Floatation of shares
o Objectives
o Internal administration
o Benefits
Industrial classifications and sectors such as manufacturing, retail, construction, financial,

agriculture and service (cover each of the following using examples to illustrate advantages
 Organisations are also linked to an industrial sector:
o Primary – extracts raw materials from the earth
 Examples
o Secondary – manufactures things
 Examples
o Tertiary – provides services
 Examples
 Where do Public, Private and Third Sector organisations fit in the industrial
classifications?
o Public Sector examples

o Private Sector examples
o Third Sector examples
Analyse the impact of the Public Sector on procurement or supply chain roles:
Objectives of Public Sector organisations such as improving services, communities and

corporate social responsibility (cover each of the following using examples to illustrate
 Caring for its citizens
 Improving services
o Public Sector facilities, i.e. libraries, public toilets
 Enhancing facilities
 Interacting with communities, i.e. social housing, children play areas
 Corporate social responsibility (CSR)
o Sourcing and evaluating suppliers for sustainability
o Embarking on projects that give something back to the community
o Regeneration of waste land or cleaning up of polluted areas
o Undertaking business in an ethical way
 Public Sector payments and benefits, including:
o Disability allowances
o Job seekers allowances
o Child benefit
o Family tax credits
o Housing benefits
Regulations that impact on procurement and supply chain operations (cover each of the
 Public Sector regulations within procurement and supply chain operations are
considerably stricter than those in the Private Sector
 Common themes of regulations
o Non-discrimination
o Free movement of goods
o Equality of treatment
o Transparency
 Procurement procedures in the Public Sector
o Open – single stage process
o Restricted – two stage process
o Competitive dialogue – several stages
o Competitive with negotiation – similar to competitive dialogue, with added
negotiation
 Procurement policy notes (PPNs)
o Prepared and maintained by the Crown Commercial Services (CCS) to help
the Public Sector procure fairly and transparently
 Examples of Public Sector regulations

o Public Contract Regulations 2015
o Utilities Contract Regulations 2016
o Concessions Contract Regulations 2016
o Public Procurement Regulations 2016
o Small Business Enterprise and Employment (SBEE) Act 2015
o The Late Payment of Commercial Debts Regulations 2013
o Energy Efficiency Directive Article 6
o Equality Act 2010
o Public Services (Social Value) Act 2012
o Local Government Transparency Code 2015
 Impact of regulations on procurement
o Advantages of regulation
o Disadvantages of regulation
Need for competition, public accountability and value for money (cover each of the
 Competition is necessary within the Public Sector to ensure money is spent fairly
and ethically to achieve value for money
 Competition – increases value for money and avoids monopolies
o Levels of competition are much lower than in the Private Sector
o Strict regulations often discourage new entrants
 Public accountability – obligations of organisations that provide services to be
answerable to those who fund it; includes:
o Transparency
o Efficiency
o Responsibility
o Integrity
o Trustworthiness
 Value for money – paramount in the Public Sector and audited by the National Audit
Office (NAO)
o 3 E’s to establish whether value for money is being obtained:
 Efficiency
 Economies
 Effectiveness



Students should leave this session with an overall understanding of and differences
between the different economic classifications (private, public and third sectors) and also
the different industrial classifications and sectors (manufacturing, retail, construction,
financial etc.). They will also have an awareness of the impact of the public sector on
procurement and supply chain roles and how regulations impact upon procurement, in
particular the importance of competition within the Public Sector to achieve value for
money

Session 9
Understand and analyse the need for compliance with
Assessment Criteria
requirements when undertaking procurement
4.3, 4.4
activities in different sectors
Understand and analyse the need for compliance with requirements when undertaking
procurement activities in different sectors
• Examine the impact of the Private Sector on procurement or supply chain roles
• Examine the impact of the not-for-profit or Third Sector on procurement or supply
chain roles

Segments: 1.1, 1.2, 1.3, 3.1, 3.2, 4.1, 6.1, 6.2, 7.1, 8.1, 11.1
Examine the impact of the private sector on procurement or supply chain roles
 As Private Sector organisations have a different means of funding to the Public
Sector, some of their objectives also differ
Examine the impact of the not-for-profit or third sector on procurement or supply chain
roles
 Not-for-profit or TSOs are neither aiming to be profitable like the Private Sector, nor
serve the tax payer like the Public Sector. The purpose of a TSO is to provide hep to
a cause
 TSOs and not-for-profits often have volunteers as staff who are happy to work for
free to provide support in achieving the goals and objectives
 A TSO has to ensure that procurement offers exceptional value for money, as
funding has been donated or generated by levies
 TSOs cannot necessarily afford or justify the expense of employing a skilled
procurement person
Examine the impact of the private sector on procurement or supply chain roles:
Objectives of Private Sector organisations such as profitability, market share, shareholder

value and corporate social responsibility (cover each of the following using examples to
characteristics)
 Objectives of the Private Sector:
o Make a profit

o Not reliant on government funding or public accountability
 Income
• Examples
 Expenditure
• Examples
 Gross profit
 Net profit
• Pay the net profit to its owners
• Invest money into the growing business
• Take over other companies to increase market share and
reduce competition
o Increase market share, through:
 Volume of sales
 Value of sales
o Increase shareholder value
 Shareholder ‘rights’:
• A right to influence company decisions
• A right to buy more shares or to increase their holding
• A right to a share of the company’s profits
• A right to vote in company decision making
• A right to take legal action against the organisation if it
commits wrongful acts
o Ensure actions are socially responsible (CSR), through:
 Using sustainable suppliers
 Using recycled packaging
 Donating a percentage of profits to a local charity
 Contributing towards a community project
Regulations that impact on procurement and supply chain operations (cover each of the
• Internal regulations are likely to be based around:
o CIPS Code of Conduct
o Code of ethics
o Anti-bribery policy
o Sustainability policy
o Environmental awareness
o Transparency
o Accountability
• Generic regulations
o International Labour Organisation (ILO)
o International Organisation for Standardisation (ISO)
o Consumer Right Act 2015
o General Data Protection Regulation (GDPR)
o Health and Safety Regulations
o Transport Driving Regulations
• Public Sector versus Private Sector regulations

The importance and role of branding (cover each of the following using examples to
characteristics)
• Functions of a brand
o What the product is
o What the product can do
o Why the product is the desired choice
• Concept of branding – the creation of a unique name and image for a product,
service or organisation
• Branding versus marketing
• Examples of branding:
o Goods
o Services
o Retail outlets
o People
o Destination
o Companies
o Concepts
• Effective branding
o Positive branding through:
 Convincing consumers that they need the product or service
 Displaying a strong image
 Having values consumers can relate to
 Being empathic to consumer needs
 Being forward thinking
 Offering sustainable solutions
 Creating environmental change
 Demonstrating value for money
o Benefits of effective branding:
 Increased awareness
 Increased profitability
 Increased loyalty
o Rebranding
Examine the impact of the not-for-profit or third sector on procurement or supply chain
roles:
Objectives of the not-for-profit or Third Sector (cover each of the following using examples
to illustrate advantages and disadvantages and their typical uses – use locally based
examples wherever possible and where each would be typically used or appropriate and
their characteristics)
 Objectives will depend upon the nature of the TSO and differ from both the Private

and Public Sectors
o Charities
 Raise awareness of the cause
 Attract donations and funding
 Ensure continuity of support
 Engage stakeholders
o Buying groups
 Negotiate the best price for members
 Provide support to members through advice on relevant issues and
matters relating to the buying group and associated trades, share
best practice, contacts and information
 Keep membership fees and levies as low as possible
 Attract more members
• Regulations impacting on charities
o Charities Act 2011
o The Charities Commission, empowered to:
 Restrict the operations of the Charity
 Appoint new trustees
 Suspend a trustee
 Appoint a new manager
 Freeze the bank account
• Need for regulated procurement exercises
o Procurement should be regulated regardless of the sector
o Common regulations for TSOs:
 Achieving best value for money
 Conducting ethical procurement
 Promoting sustainability
 Benchmarking to ensure fair pricing
 Supply chain management


Students should leave this session with an overall understanding of the impact of the
Private Sector and not for profit, or Third Sector on procurement or supply chain roles.
They should have an appreciation of the differing objectives for the different sectors and
the regulations and requirements that procurement professionals are required to adhere
to

Session 10
Assessment Criteria
Final module recap and discussion All assessment criteria
for module
All learning outcomes for the module as discussed in sessions 1 to 9
CIPS Module Study Guide for Module L4M1 – Chapters 1, 2, 3 and 4

Segments: 1.1, 1.2, 1.3, 3.1, 3.2, 4.1, 6.1, 6.2, 7.1, 8.1, 11.1
Discuss the overall aims of the module:
Module aim:
In any organisation, a significant proportion of costs are accounted for by the purchases of
products and/or services, hence organisations see procurement and supply as a key
contributor to their value-added strategies. Equally, any organisation will also be
managing the supply of products and/or services to their customers, be they internal or
those from other external organisations, consumers or the general public. This module is
designed using the CIPS Procurement Cycle as its basis. It will provide those who are
interested in developing an informed awareness of different perspectives or approaches
within the discipline, an overview of the key stages associated with procurement and
supply and will serve as an introduction for those who are expected to address complex
well-defined procurement and supply problems that are non-routine in nature.
The module also serves as the initial study for learners who are embarking on the CIPS
Level 4 Diploma in Procurement and Supply, hence coverage is limited to the definition of
concepts and ideas as well as to the terminology used in procurement and supply, rather
than detailed analysis, evaluation and practical application which will be a feature of later
CIPS level 4 modules.

Discuss the final assessment
Format
• Constructed Response Exam – 3 hours
• Pass mark – 50 %
Content and question types

• Use the sample questions provided for types and formats of questions

• Use this to pull together all of the key elements discussed within sessions 1 to 9 of
this module, highlighting associated assessment criteria
• Help students to cement ideas and concepts through practical application of ideas,
theories and models
• Use these to highlight key learning against assessment criteria
Student Exercises
• Use these to highlight key learning against associated learning outcomes for the module
On completion of this module, learners will be able to identify the key stakeholders in the
application of the sourcing process and analyse the Procurement Cycle, evaluating the
influence that procurement and supply has as a source of added value for the organisation

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Diploma in Procurement

Leading global excellence in procurement and supply

Case study, questions, etc

CIPS Global Standard for Procurement and

Leading global excellence in procurement and supply

Knowledge Descriptor (the holder….) Skills Descriptor (the holder will….)

Leading global excellence in procurement and supply

For this module:

• Constructed Response Exam – 3 hours

Leading global excellence in procurement and supply

Module Content Overview

Leading global excellence in procurement and supply

Leading global excellence in procurement and supply

Leading global excellence in procurement and supply

CIPS Global Standard for Procurement and Supply

Describe the categories of spend that an organisation may purchase

Analyse the different sources of added value in procurement and supply

Describe the categories of spend that an organisation may purchase:

Leading global excellence in procurement and supply

Typical breakdown of organisational costs represented by procurements of goods, services

Leading global excellence in procurement and supply

Leading global excellence in procurement and supply

Analyse the different sources of added value in procurement and supply:

Leading global excellence in procurement and supply

Achieving quality, timescales, quantities and place considerations in procurements from

Leading global excellence in procurement and supply

See final case study for the module

Leading global excellence in procurement and supply

Leading global excellence in procurement and supply

CIPS Global Standard for Procurement and Supply

Compare the concepts of procurement and supply chain management

Compare the concepts of procurement and supply chain management:

Leading global excellence in procurement and supply

Leading global excellence in procurement and supply

Leading global excellence in procurement and supply

See final case study for the module

• See student exercises based on modular learning outcomes

Leading global excellence in procurement and supply

CIPS Global Standard for Procurement and Supply

Explain the key aspects of the procurement cycle

Explain the key aspects of the procurement cycle:

Leading global excellence in procurement and supply

Leading global excellence in procurement and supply

Analyse the key stages of a sourcing process:

Leading global excellence in procurement and supply

Leading global excellence in procurement and supply

See final case study for the module

• See student exercises based on modular learning outcomes

Leading global excellence in procurement and supply

CIPS Global Standard for Procurement and Supply

Leading global excellence in procurement and supply

E-requisitioning, e-catalogues, e-ordering, e-sourcing and e-payment technologies (cover

Leading global excellence in procurement and supply

Leading global excellence in procurement and supply

See final case study for the module

• See student exercises based on modular learning outcomes

Leading global excellence in procurement and supply

CIPS Global Standard for Procurement and Supply

Explain key aspects of corporate governance of a procurement or supply chain function