M4 Book Flashcards
What regulatory bodies and legislation exists in your country to protect workers
International labour organisation ensure globally working conditions are maintained.
What are 4 types of sourcing
Sole
Single
Dual
Multiple
What style of relationship is linked to each style of sourcing
Single sourcing collabrative
Dual sourcing collabrative
Multiple sourcing transactional
Bids submitted after the deadline will not be considered by the buying organisation
What are the different types of of tender approach that a procurement professional can use
Open
Restricted
Negotiated
Competive dialogue
Innovation partnership
Competitive procedure with negotiation
Negotiated tendering is often used where there is only one bidder or where the buyers requirement is complex
Explain the differences between open, restricted and negotiated tendering approaches
Open tender is used when limited interest and fewer bids to evaluate, advertised widely allowing any suppliers to bid.
Restricted tendering advertise the opportunity with an expression of interest. They are sent a PQQ. Successful suppliers will then receive an information to tender. Used when there is a high interest from bidder’s
Negotiated tendering is the same as restricted but may inly include one or a few that can supply a specific skill. Can be difficult to reach an agreement due to lack of competition
What are the four stages of negotiation
Preparation
Information exchange
Bargaining
Closing
What styles can a negotiator use
Competitive style
Collabrative style
Avoiding style
Accomdating style
Compromising style
Explain how carter 10cs model may be used to choose potential suppliers
Competnecy - Does the supplier have the required skills to
Capacity - does the supplier have the space resources to deliver the contract
Cash - does the accounts seem stable
Clean - does the supplier act in an environmentally friendly way
What are the types of specification
Performance and conformance
Ohnose eight waste acronym is tymwoods
Transport
Inventory
Motion
Waiting
Over production
Over processing
Defects
Skills
What are three selection criteria and explain their importance in the sourcing procrss
Social - do the suppliers employees have a good understanding of their right ?
Environmental - is the product composed of material that may cause harm or are not recyclable
Governance - does the supplier have the time and production line capacity to produce the product.
Financial checks form part of due dilligance
Macro environments can be remembered withe acronym STEEPLED
What internal and external factors could have an effect on a suppliers performance
Internal factors could be customers, suppliers.
External factors - environment and economic (interest rates)
Explain two risks if suppliers are not pre qualified and appraised
Poor quality - suppliers need clear descriptions to be able to provide a solution to supply product. Buyers could as for samples before selection.
Financial - financial stability is important to be able to them fulfill requirments on time. Reviews will be made prior.
What are the common entries in a profit and loss account
(Income statement)
Total revenue
Cogs
Net profit
Gross Profit = Total revenue - cost of sales
A balance sheet shows organisations financial position at a single point of time
What are three types of cash flow activities
Operating activites - cogs
Investing activities -
Financing activities
What should be reviewed when analysing prices on quotations
Rebates
Exchange rate
Payment terms (7 days etc)
Carriage included
Explain why exw or ddp would be expected to be the cheapest incoterm
Remember
Whole life cost includes all costs associated with owning an asset from acquisition to disposal
Why should whole life costs be evaluated before awarding a contract to a supplier
WLC should be analysed before purchase as there may be on going costs such as wearing parts or deep cleaning
What factors could a supplier offer to generate added value for a contract
Shorter lead time
Innovation
Improved quality
Good reputation
What companies do you know who have added value
Suppliers constantly delivering on time. Next day delivery .. out of stock updates etc
Remember
Awarding criteria can be technical or commercial
Technical - spec, delivery, quality
Commercial - ethical, sustainbility
Summary chapter 1
Make or buy or to outsource
Which style of souricing - single dual or multiple
Pre appraisal and evaluate on strict criteria
Intracompany
Remmeber
Suppliers can be categorised into abc according to their levels of importance and spend yo the buying organisation
Explain which category of supplier you think needs to be managed closely within the pareto principle
NHT
Remember
Commodities can be divided into five different trading categories
Explain how much commodity pricing can affect how much goods and services cost a buying organisation
Remember
Both primary and secondary data can be distorted
Describe three types of secondary data that would be useful to consider when analysing the suitability of suppliers
Remeber
Credit rating scores are weighted
Describe how using a credit score can minimise the risk to which an organisation is exposed
Explain how and why credit rating agencies obtain information about an organisation
Which sector is most likely to advertise its contractual requirements
Write an advertisement for a tender opportunity for a commodity product or service with which you are familiar
What information is likely to be included in a ppq
Which suppliers are rfqs sent to
Remember
Five rights of procurment
Quantity
Quality
Time
Place
Price
Remember
Tendering is used for a wide range of requirements, most typically value and where requirements are more complex
Remember
The restricted approach is used where the interest is expected to be higher and so the buyer needs a method of de selecting unsuitable bidders and creating a shortlist of acceptable organisations
Which tendering approach would best be suited to a procurement function that did not know how it was going to deliver the solution to the business need
Remeber
Cross functional teams enhance knowledge to help achieve goals
Explain how cross functional team could aid a procurement professional when analysing bids
Timescales are not suggesting in public sector sourcing. Organisations must be able to demonstrate that they have kept to them
Remember
There should be no conflicts of interest in the tendering process
Explain why each stage ina tender process should be formalised in its approach
Choose two assessment criteria and explain why you think they are important when assessing tenders and quotations
Which category of item requires the largest amount of time to be spent on assesing propasals
Check
Which category of item requires the largest amount of time to be spent on assessing proposals?
Remember
The weight of each criteria reflects its importance in the decision making
What should the total for all weights add up to in a weighted points system
Create your own weighted points system to assess two or more supplier propals
How can recommendations of a tender outcome be presented
The recommended source of supply can be single, sole, dual or multiple
Remember
Always abide by the cips code of conduct when carrying out tenders and awarding contracts, whether competitive or not
Remember
Though price is a key driver in public sector, the quality of purchased goods/ services and the ethical practices followed in its production are also important. Poor standard may cause rep risk
Go online and research the bsi kitemark for products. Explain three benefits for consumers who encounter this mark on particular product
Similar regulations exist in many other countries and it is important that procurment professionals are familiar with those that apply to any sourcing they carry out
Give ecamples of legislation in the following areas
Data
Ethical practice
Health safety enviorment and worker rights
Marketplace
Product standards
Research public sector tendering for another country. Where are contracts advertised and above what value ? How are the tender processes goverend ?
Keeping stakeholders satisfied by meeting their needs is important, regardless of which sector an organisation belongs to
Do you know which organisation in your country you can speak to for guidance with cases of fraud? Look this up on the internet and familiarise yourself with the support these organisations can provide
Acording to the fraud triangle, what are three key influencers of fraud? Give one example of each of these.
What forms can fraud take and why may these affect supply chains
Remember
Obviously not every person with a conflict of interest is garunteed to behave in a corrupt way. Conflicts of intrest can leave decision makers open to potantial accusations that they have acted unethically
remember
confilcits of interest are not declared to icnirminate individuals. Instead they are a good way for both parties to postiviley and openly declare the limits of their professional relationship. this means that others are able to support them, in making sure acivites are carried out fairily
Give three examples of situations that may be considered potential conficts of intrest.
what infor would you expect to be record ina conflict of interest register ?
What damage could arise from a conflict of intrest not being raised between to business
In 1948 ehich documnent was relaeased by the UN describing human rights ?
How many human rights are listed in this document ?
are human right garunteed in every country.
Which organisations exist to provide support regarding potential human rights violations ?
Choose 5 uk based suppliers witha turnover of more that 36m
- check comoanies website too see if it displays anti slavery
remember
Buyer should choose the appropiate process before inviting suppliers to tender and contimnue to follow this throughout in line with the law
Describe the benefits of using each of the following procedures from the EU 2014
open procedure
Restricted procedure
competitve procedure with negotiation
competitve dialogue
Innovation partnership
What three types of activities do NOGs in the non for profit sector undertake? Give examples of organisations that carry out these activities
Remember
Language barriers may be a problem - ensure paperwork is in a comon language and that it can all be understood by customs officials at plints of exit and entry to prevent delays
Describe the purpose of each of the following documents in international trade
Purchase order
bill of lading
insurance cover
certificate of origin
Carnet
Remember
Countries within the european union are required to implement european law into their own regulatory framework
Consider an organisation with which you are familiar. Does the organsiation source from foreign suppliers? If so check the following
Are different currencies used by both parties
which company chosen currency has the most favourable
Are suppliers paid before goods are received to secret.
Remember
Transfer of ownership is the point where title of goods passes from one party to the other
Remember
International trade can involve higher risk than domestic trade, but a good understanding of laws, cultural practices and trade documentation can help prepare for this.
Explain the advantages and disadvantages of internagional souricng
Remember
While intercoms are well known worldwide, it is still important to work closely with suppliers to ensure that both parties have interpreted them to mean the same thing
