M4 Flashcards
Identify the two types of “sourcing” and four characteristics of each type.
1.1
Tactical Sourcing - Short term and transactional in nature.
Strategic Souricng - Focuses on aligning procurment decisions with buisness stratergy.
- Explain the term outsourcing and identify six reasons why an organisation may decide to do this.
Outsourcing - Contracting certain business functions to external providers. they may do this so they can:
Cost saving
Focus on core competitors
flexibility and scalability
risk management
Time Saving
Advanced tech
- Identify the market analysis tool that uses forces to identify the level of competition within a market.
Porter Five Forces
- Identify each of the forces.
Bargaining of Buyer
Bargaing of supplier
Threat of new entrants
Rivalry
threat of substitues.
- When considering the make or buy decision – identify five arguments/factors for “make” decision.
Make decision:
Improved quality control
Reduced risk
Continius supply
Buy Decision
No capacity in house
reduced overheads
Advanced Tech that “make” do not have.
- Identify and explain the model that can be used to recognise external factors that affect the market.
STEEPLED
Social
Tech
Economic
Enviroment
Political
Legal
Ethical
Demographic
- Explain the term “intracompany trading”.
Different subsidaries within the same umbrella company.
- Identify and describe four other procurement structures
Decentralised - Individual locations are responsible for their buying activity
Centre led action network - Policy is determined by the centre.
Strategically controlled action network - centre sets stratergy and has control in local markets.
Distributed Network - no defined centre.
- Explain the term “transfer pricing arrangement”.
Pricing of goods services or assets within the same organisation
- Identify five advantages of transfer pricing arrangements.
Global tax bill can be reduced
Simplifies internal accoutning
Divisions can be evaluated on spend
- Identify five disadvantages of transfer pricing arrangements.
Careful and strict monitoring to avoid tax evasion
Sourcing locally may be more cost effective.
Some contries economies can be negatively affected.
- Identify the model which can be used to assess the impact a product/purchase has on the organisations profit and level of supply risk it poses to the organisation.
Kraljic Matrix
- Identify four related costs with outsourcing.
- Identify four benefits of outsourcing.
Continuity of supply
Continuity of employment
Protect Rep Damage
Supports local economy
- Identify the matrix to be used to help decide which organisations functions should be outsourced.
Thomas & Kilman
- Identify five functions that are frequently outsourced.
- Explain the terms “insource”, “offshored”, “reshored” and “onshored”
- Identify five risks of outsourcing.
- Identify the legislation that aims to protect employees when outsourced contracts are moved between supplier.
- Describe the work of the ILO and Fairtrade Foundation organisations
- Explain the term “single sourcing”
1.2
- Explain the term “sole-sourcing”
- Identify and explain four advantages of single sourcing
- Identify and explain four disadvantages of single sourcing
- Explain the terms “dual and multiple sourcing”
- Identify and explain four advantages of dual and multiple sourcing
- Identify and explain four disadvantages of dual and multiple sourcing
- Identify and describe the five stages of a generic tendering process.
- Identify the five types of tendering process.
- Explain the characteristics of each type of tendering process.
- Identify and describe the quadrants of the model that can be used to understand approaches to negotiation
- Identify and describe the four stages of the negotiating process
- Explain the term PQQ and some of the typical elements found within a PQQ. What is it trying to achieve?
1.3
- Identify six techniques used to prepare a list of potential suppliers
- Identify and explain Dr Ray Carters 10C framework of supplier appraisal
- Explain the term “quality assurance”
- Identify the two types of specifications which can be used for products or services.
- Identify the advantages and disadvantages of each type of specification.
- Explain the term “TQM”
- Identify the five aims of TQM
- Identify the ISO for Quality Management
- Identity four other criteria used to select external suppliers
- Identify and explain five impacts that could affect organisations if they don’t conduct due diligence on potential suppliers.
- Identify and explain five areas of supplier financial performance that can be evaluated
- Explain what a profit and loss / income statement is used for
- Identify the P & L calculation
- Explain what a balance sheet / statement of financial position is used for
- Identify the formula for shareholder equity
- Identify the financial ratios which can be calculated to gain an overview of a supplier’s financial health.
- Explain the use of the Pareto Analysis.
2.1
- Explain the use of ABC analysis
- Identify the 11 relationship types as per the CIPS relationship spectrum
- Identify five common Indices that measure economic data.
- Explain the term “commodity” and identify five types of commodities.
- Identify five factors that influence commodity pricing.
- Explain the term “futures contracts” and the associated benefits and risks.
- Identify three futures exchange markets.
- Identify and explain the two forms of data that can be collected on suppliers.
- Identify five source of secondary data.
- Identify and explain the use of three financial statements that can help procurement to evaluate supplier financial stability
- Identify three benefits of ensuring suppliers are financially stable.
- Explain the role of credit rating agencies and the five elements that make up a credit score
- Explain the terms “cyber-attacks”, “cyber crime” and “cyber-security”
Identify five pieces of important information that should be included in advertisements of contracts.
Explain the use of an RFI and the typical information this looks to identify.
Explain the use and purpose of an RFQ.
Identify five typical stages in a best practice tender arrangement.
- Explain the use of a weighted point system.
- Identify three of the six steps in the weighted points procedure.
- Identify five areas/criteria which may be included in a weighted points process.
- Identify three questions that could be asked upfront in terms of a supplier’s ESG and ethical practices
- Identify five areas of added value suppliers can deliver.
- Identify and explain five areas that a business case will cover when making recommendations
- Explain why it is important to have procedures in place for the contract award stage
- Identify five key areas of regulation
3.1
- Identify three product safety standards
- Identify the public sector regulations that impact the sourcing process
- Define the term “bribery”
- Identify and explain the regulation regarding bribery in the UK
- Define the term “corruption”
- Define the term “fraud”
- Identify five forms of fraud
- Define the term “embezzlement”
- Identify and explain the components of the fraud triangle
- Define the term “conflict of interest” using examples
- Identify the model that can be used to manage conflicts of interest
- Define the term “human rights”
- Identify five rights outlined in the Universal Declaration of Human Rights
- Define the term “modern slavery”
- Identify and explain five forms of modern slavery
- Identify five potential signs of modern slavery in supply chains
- Identify and explain five tender procedures
- Identify five advantages of undertaking a tendering exercise
- Identify three disadvantages of undertaking a tendering exercise
- Explain the term “EU Single Market”
3.2
- Explain the term “Non preferential origin”.
- Explain the term ‘Preferential origin’
- Identify and describe five documents to facilitate the flow od international import.
- Identify the currency market determined by supply and demand.
- Identify five benefits of international sourcing.
- Identify five disadvantages of international sourcing.
- Identify four reasons for limiting the import of goods.
- Identify three types of incoterm.
- Identify five types of payment mechanism that can be used in international trade.
- Explain the use of border controls and customs clearance.
- Identify the UK customs controls.
- Identify and explain the Vienna Convention (CISG)
- Explain the term “code of ethics”
3.3
- Identify and explain the five key principles of the CIPS code of ethics
- Identify Nolan’s seven principles of public life
- Explain the three key levels of implementing ethical codes
- Identify the acronym for SMART KPIs
- Identify thee examples of ethical KPIs
What are the benefits of carrying out supplier audits?
What are the constraints or limitations of carrying out supplier audits?
What are the benefits of not announcing planned audits to suppliers before carrying them out?
Explain the use and what is included in a corrective action plan.
- Explain the term “ESG”
- Explain the term “sustainability”
- Identify and describe the 3Ps of sustainability and the triple-bottom line concept
- Identify and explain five internal social impacts
- Identify and explain five external social impacts
- Identify the Iso for sustainable procurement
- Identify five benefits of monitoring and reporting on ESG impacts
