7/27/2019 CIPS L4 Foundation Diploma Unit Content Guide 0511 http://slidepdf.com/reader/full/cips-l4-foundation-diploma-unit-content-guide-0511 1/35 Unit content guide Revised content September 2009 Foundation diploma in purchasing and supply The units that make up the award are: • Effective negotiation in purchasing and supply • Developing contracts in purchasing and supply • Measuring purchasing performance • Managing purchasing and supply relationships • Purchasing contexts
35
Embed
CIPS L4 Foundation Diploma Unit Content Guide 0511
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
7/27/2019 CIPS L4 Foundation Diploma Unit Content Guide 0511
The Chartered Institute ofPurchasing & Supply qualificationsladder has six levels of awards. For
details of the entry requirementsfor each level, please refer towww.cips.org
The CIPS Foundation diploma inpurchasing and supply is a Level 4higher level qualification. It has beenaccredited by the Office ofQualifications and ExaminationsRegulator (Ofqual) and appears onthe National Database
of Accredited Qualifications,please refer towww.accreditedqualifications.org.uk
The Level 4 Foundation diploma inpurchasing and supply consists offive compulsory units.
Assessment for each unit is byexamination, or if you are a studentin the UK there is an option for eachunit. If your study centre has beenapproved you can choose either aclosed book examination or a work-based assessment.
If you wish to study for this award itis expected that you will undertake
50 guided learning hours per unit, iea total of 250 guided hours. Thedefinition of guided learning hours is:
“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.”
You will find that study centres varyon the exact format for delivery ofthe study programme. Additionally
CIPS would recommend that youalso commit 80 hours per unit ofself-study, including wider readingof the subject areas and revision togive yourself the best chance ofsuccessful completion of theaward.
Below is a lists of the units, theirNDAQ reference numbers and CIPSreference codes which are used to
identify the units for examinationpurposes.
Foundation diploma in purchasing and supplyIntroduction
1
LEVEL4 – FOUNDATION DIPLOMA INPURCHASING ANDSUPPLY NDAQ QUALIFICATION NUMBER100/6112/5
Effective negotiation in purchasing and supplyDeveloping contracts in purchasing and supplyMeasuring purchasing performanceManaging purchasing and supply relationshipsPurchasing contexts
AssessmentAssessment is the way in whichCIPS will measure whether or not a
student is able to demonstrate theirknowledge, understanding andability to apply their learning in anygiven situation.
An assessment could be anexamination, assignment orproject.
Business essentialsCIPS have introduced a new
concept called ‘businessessentials’.
They are commonly occurringthemes through the CIPSqualifications, that do not warranta unit in their own right, but thatare important holistically to thelearning undertaken within CIPSqualifications.
They are areas of importance,innovation and some emergingthemes, such as:• Quality management• International issues• Business finance• Information management• External factors
Command wordsCommand words are generallyverbs that are used to indicate the
level of learning undertaken. Theytend to be hierarchical in nature.
For example, at Level 3, acommand word will be‘demonstrate’ or ‘explain’, whereasa command word at Level 6 will be‘synthesise’, or ‘critically evaluate’.
These words reflect the level ofcomplexity of your learning and
ultimately your assessment at thatlevel.
Compulsory unitsThese are units that you must takeeither through CIPS or analternative awarding body thatconstitute necessary knowledgeand understanding to fulfil learningrequirements for CIPS
qualifications.
If you have undertaken equivalentlearning or have equivalent relatedexperience to the compulsory unitsfrom somewhere else you mayeither be exempt from learning, orgain accreditation for prior learningor experience.
Entry levelThis is the point at which you willenter the CIPS qualifications ladder.
This entry will be based upon pre-requisite knowledge,understanding and experience.
ExemptionsStudents who have successfullycompleted certain post-schoolstudies may apply for exemptionsfrom equivalent courses in theirprogramme of study. To earn anexemption from either levels of
qualifications or option units withinqualifications you should contactCIPS or see www.cips.org
Please note that gaining anexemption, does not mean that yougain an exit award at that level,rather that you bypass that level oflearning because of equivalentlearning and achievement gained
elsewhere.
Foundation diploma in purchasing and supplyGlossary of terms
2
7/27/2019 CIPS L4 Foundation Diploma Unit Content Guide 0511
Exit awardAn exit award is in essence aqualification. CIPS have six exit
awards in total.• Introductory certificate in
purchasing and supply• Certificate in purchasing and
supply• Foundation diploma in
purchasing and supply• Advanced diploma in purchasing
and supply• Graduate diploma in purchasing
and supply
• Executive diploma in purchasingand supply
For each qualification you study,you will receive a certificate ofachievement confirming your exitaward.
Indicative contentThe knowledge required in order to
fulfil the learning objectives andachieve the learning outcomes – inother words what you need toknow.
Integrative unitsIntegrative units are intended tohelp students see connections
between all aspects of theirlearning within a particular level ofqualification. For the purpose ofCIPS qualifications, awards atlevels 3 and 6 will have anintegrative unit.
Learning objectivesDetermines the level of learningyou must undertake in order toachieve the learning outcomes.
LevelThe level determines thecomplexity of learning, the depth of
learning and the comparison oflearning with other qualifications.CIPS has qualifications at levels2 to 7. The levels are as follows:
• Level 2Introductory Level – this is forsomebody new to thepurchasing and supplyprofession and often in a juniorcapacity
• Level 3Junior technical – alsopotentially new to learning
• Level 4Operational/juniormanager/new to the profession
• Level 5Manager/specialist role
• Level 6Senior managers/specialist
professional• Level 7
Postgraduate strategic leader
The levels are determined byOfqual, who are the Governmentregulator for education, and enablea clear understanding nationally ofthe level of a person’s learning andability in that field.
3
7/27/2019 CIPS L4 Foundation Diploma Unit Content Guide 0511
National QualificationsFrameworkThis framework is a government
framework, where qualificationsthat are approved by Government,as being fit for purpose, andmeeting the quality criteria, arelisted. Qualifications listed withinthis framework are monitoredagainst a variety of measures toensure quality of qualification,associated procedures and delivery.
OfqualOfqual is the Government regulatorfor professional bodies such asCIPS, and act as the caretaker ofqualifications included in theNational Qualifications Framework.
Optional unitsThese are units where you havechoice and opportunity tospecialise in an area of interest.
There is an opportunity to selecttwo optional units at advanceddiploma and two optional units atgraduate diploma.
Qualifications ladderThis ladder represents thehierarchical nature of CIPS
qualifications. The ladder has sixsteps within it. It starts with anIntroductory Certificate through tothe Graduate Diploma.
Each step of the ladder isrepresented by qualification withan ‘exit award’.
Statements of practiceA goal for attainment, which
indicates what you need to knowand be able to do to complete yourstudies in a particular subject area.
Each unit has six to seven learningoutcomes which outline what youwill achieve as a result of yourlearning in that particular unit.
Student
Member who is studying a CIPSqualification.
UnitA segment of learning within theCIPS qualifications, which has a
value in terms of hours of learning.Each unit is individual, has its owntitle, rationale and content.A unit will also have anassessment attached to it in orderto demonstrate achievement andconclusion of the learning.
WeightingsWeightings are allocated to eachunit, to determine how the learning
can be sensibly split.
Each unit has a content weightingof 100%. Within each unit, eachsubject area is given a weightingeg 20% or 25%.
This weighting indicates the levelof input and learning required bythe deliverer and the learner in
order to complete the subject area.However, the weightings do notnecessarily reflect the marks thatmay be allocated to a question inthat subject area of the unit.
4
7/27/2019 CIPS L4 Foundation Diploma Unit Content Guide 0511
BATNA • Best alternative to anegotiated agreementA negotiation technique that is the
measure of the balance of power ina negotiation, for example if otherparties need you in order to reachtheir objectives, your BATNA isstrong; your negotiatingcircumstances are strong. If youwant to buy a new car and thesame model is for sale at severalcar dealers, you have a strongBATNA because you can benefitfrom their competition for your
business.
BOOT • Build own operate transferA project methodology that ensuresthe transfer of a project back to theparty granting the concession,either with or without cost.
BCA • Benefit cost analysis
A formal process used to helpappraise, or assess, the case for aproject or proposal often forms partof a business case.
CAPEX • Capital expenditureFunds used by an organisation toeither purchase a new asset orupgrade an existing one, usuallyhigh in value.
CLAN • Centre led actionNetworkA system used to structure
procurement, central co-ordinationwith buying hubs integrated intobuying units.
CSR • Corporate socialresponsibilityCSR means the commitment tosystematic consideration of theenvironmental, social and culturalaspects of an organisation’soperations. This includes the key
issues of sustainability, humanrights, labour and communityrelations, as well as supplier andcustomer relations beyond legalobligations; the objective being tocreate long-term business valueand contribute to improving thesocial conditions of people affectedby an organisation’s operations.
EU • European unionThe European Union was created in1992 following the signing of theMaastricht Treaty. Its aim is tocreate an environment for the freemovement of goods, services,labour and capital across themember states. There is also anemphasis on the abolition of trustsand cartels, and the developmentof joint and reciprocal policies onlabour, social welfare, agriculture,transport and foreign trade
FMCG • Fast moving consumerGoodsProducts that have a quick shelf
turnover, at relatively low cost andgenerally little financial investmentto purchase.
ICT • Information,communications technologyThis is a broad subject concernedwith technology and other aspectsof managing and processinginformation, especially in largeorganisations
Incoterms • Internationalconsignment delivery termsThere are 13 Incoterms developedwhich are intended to makeinternational trade easier and helptraders in different countries tounderstand one another. Using theterm enables those reading them tounderstand who is responsible for
risk, transport and costs as well asother issues.
M&A • Merger & acquisitionRefers to the aspect of corporatefinance strategy and managementdealing with the merging andacquiring of different companies aswell as other assets.
Foundation diploma in purchasing and supplyAcronym guide
5
7/27/2019 CIPS L4 Foundation Diploma Unit Content Guide 0511
MRO • Maintenance, repair &operationsProducts that repair any sort of
mechanical or electrical device orproducts purchased that form partof a routine preventativemaintenance plan.
NHS • National health serviceFounded in 1948, this organisationprovides the majority of healthcarein the UK. NHS services are largely“free at the point of delivery,” paidfor by taxes. Employing well over
one million people, the NHS is thelargest employer in Europe and oneof the largest employers in theworld.
OPEX • OperationalexpenditureFunds used to purchase day-to-dayoperating goods and services.
PESTLE • Political, economic,social, technological, legal,environmentalAn analytical tool that aidsorganisations developing strategiesby helping them understand theexternal environment in which theyoperate now and in the future.
PFI • Private finance initiativeAn agreement that promotespartnership between both private
and public sectors which, enablesutilisation of a wide variety ofassets and services available in theprivate sector. The objective is toimprove the quality and quantity ofpublic sector capital products, andalso to provide more efficientpublic services.
PPA • Post project appraisalAn appraisal process that takes
place after the project is complete.The aim is to identify key aspectsthat enable the transfer of learning.For example, budget planning.
PPP • Public privatepartnershipA PPP refers to any alliancebetween public bodies, localauthorities or central government,
and private companies. PPPstypically involve the jointownership of a special purposevehicle established under companylaw.
P2P • Purchase to payA seamless process enabled bytechnology designed to speed upthe process from point of order topayment.
ROI • Return on investmentThe analysis undertaken tounderstand the financial return on
an investment.
SMEs • Small and mediumsized enterprisesA small firm is an independentbusiness, managed by its owner orpart-owners and with less than 50employees. A medium sizedcompany must meet thresholds forannual turnover and have fewerthan 250 employees.
SSU • Shared services unitAn SSU is an increasingly popularapproach where various commonactivities are managed by a singlebusiness unit for the wholeorganisation. Some of the functionscommonly found within an SSU arepayroll, human resource reporting,IT, financial analysis/ accounts
payable and procurement.
SWOT • Strengths,weaknesses, opportunities,
threatsThis is a strategic planning toolused to evaluate the strengths,weaknesses, opportunities, andthreats involved in a project or in abusiness venture or in any othersituation requiring a decision.
6
7/27/2019 CIPS L4 Foundation Diploma Unit Content Guide 0511
The third sectorVoluntary and communityorganisations such as charities and
also social enterprises (socialenterprises have social orenvironmental purposes as central towhat they do. They are profit makingbut rather than maximisingshareholder value their main aim is togenerate profit to further their socialand environmental goals. Examplesof social enterprises are The BigIssue and the fair-trade chocolatecompany Divine Chocolate.
TUPE • Transfer of undertakings(protection of employment)Legislation that aims to ensure thatan employee whose company istaken over has his existing conditionsrespected by his new employer. Theyalso apply in some cases for worktransferred to contractors. Thisincludes hours of work, pay, pension
entitlement and so on.
VAE portal • Value addedelectronic portalsThe term as loosely defined tobasically cover anything that can beclassed as adding value, so forexample an intranet portal with anElectronic Requisitioning capabilitycan be classed as a VAE portal as theelectronic requisition can beseamlessly transformed in to apurchase order.
7/27/2019 CIPS L4 Foundation Diploma Unit Content Guide 0511
This unit is designed to providestudents with the ability to apply avariety of theories relating tonegotiation in respect ofpreparation, planning andparticipating in the negotiationprocess.
Students will undertake activitiessuch as cost and market analysis,using information to support the
planning of negotiation withsuppliers to achieve value formoney (VFM). Students shouldalso apply their knowledge ofvarious legal implications affectingnegotiations.
Negotiating is often a finelybalanced activity which alsoinvolves managing a range of
complex relationships, andstudents should be prepared tomanage effectively thoserelationships, avoiding conflictwhile maintaining the balance ofpower.
By the end of this unit, studentsshould be able to plan and preparehow to undertake negotiations, and
also to understand how they wouldbe able to assess effectiveness.
STATEMENTS OF PRACTICEOn completion of this unit, studentswill be able to:
• Plan and prepare fornegotiations
• Apply a range of negotiationtheories in order to achieve set
outcomes• Differentiate between a range
of persuasion tools andtechniques
• Explain the different approachesrequired when negotiating indifferent settings
• Understand how to analysenegotiation performance
Foundation diploma in purchasing and supplyEffective negotiation in purchasing and supply
8
7/27/2019 CIPS L4 Foundation Diploma Unit Content Guide 0511
4.1 Evaluate the relativeimportance of verbal andnon-verbalcommunications innegotiation situations• Reducing the potential for
conflict• Sales influencing tools• The other person’s
perspective• Body language• Behavioural techniques.
4.2 Identify and explain how to apply the attributes of agood negotiator toeffective negotiations• Interpersonal sensitivity• Characteristics of a skilled
negotiator• The emotionally intelligent
negotiator• How to improve
negotiation capabilities.
4.3 Evaluate the effect ofeffective listening andquestioning skills in the
negotiation process• Different types of
questions• Effective listening• Timing of questions.
4.4 Analyse and explaindifferent negotiationpractices in internationalcultures• Culture and negotiation
• Body language• Barriers to international
negotiation.
4.5 Analyse and explain thefeatures of effectivenegotiation by telephoneand email• Factors effecting telephone
negotiation
• Factors effecting emailnegotiation
• Good practice whennegotiating bytelephone/email.
4.6 Identify and evaluate thekey features of effectivenegotiation with internal
customers across theorganisation• Listening to the internal
customer’s perspective• Rapport building
techniques• Dealing with difficult
customers• Concessions and the
impact on purchasing.
4.7 Evaluate personaleffectiveness innegotiations in differentcontexts• Reflecting on performance• Feedback mechanisms• Looking ahead to
improvement anddevelopment.
11
7/27/2019 CIPS L4 Foundation Diploma Unit Content Guide 0511
This unit is designed to helpstudents to gain an appreciation ofthe legal and commercial issues ofcontractual arrangements enteredinto between organisations. Theunit provides an underpinningknowledge of the legalities of theformation of contracts as well asthe key ingredients of anycommercial arrangement - aspecification, the contractual terms
and relevant key performanceindicators.
Students will be able todifferentiate between a range ofcontractual terms and apply them,demonstrating an understanding ofhow they affect both direct andindirect expenditures. Studentswill also be able to describe and
apply processes used for tenderingfrom external suppliers through tocontract award.
STATEMENTS OF PRACTICEOn completion of this unit, studentswill be able to:
• Explain the use of specifications,performance measures andcontract terms for procurementsof products and services fromsuppliers
• Discuss a range of legal aspectsin relation to the contractingprocess
• Understand and apply thelegalities linked to the formation
of contracts• Explain the impact of both
implied and express terms incontracts
• Differentiate the remedies forbreaches of contracts; and draftterms to cover such risks
• Appraise and discuss the legaland relationship issues arisingthrough the use of tendering
procedures, including e-tendering, and the application ofEU procurement directives
• Discuss the practices that canbe adopted for contract reviewand award.
Foundation diploma in purchasing and supplyDeveloping contracts in purchasing and supply
12
7/27/2019 CIPS L4 Foundation Diploma Unit Content Guide 0511
This unit is designed to helpstudents to measure theeffectiveness of the supply chainand its contribution to thecompetitiveness of theorganisation.
By the end of this unit, studentswill be able to apply a range ofmeasurement techniques in orderto monitor the performance of
suppliers at organisational,functional and individual levels,how they perform financially versustarget, compliance tocontract/specification, andpotential risks that they maypresent. Students will alsounderstand how the performanceof purchasing departments andindividual buyers can be measured
and how targets for improvementcan be formulated.
STATEMENTS OF PRACTICEOn completion of this unit studentsshould be able to:
• Explain how measuringperformance in supply chainactivities fits into the overallmanagement process of anorganisation
• Evaluate the benefits ofimplementing a well-structuredapproach to measuringorganisational, functional andindividual performance
• Categorise types of performancemeasures that are available tosupply chain managers
• Appraise measures that can beused to improve supplierperformance
• Employ accounting techniquesand ratios to measure supplier’sefficiency
• Evaluate targets as a means of
improving the performance ofthe purchasing function andindividual buyers.
Foundation diploma in purchasing and supplyMeasuring purchasing performance
16
7/27/2019 CIPS L4 Foundation Diploma Unit Content Guide 0511
1.4 Analyse the types andcategories of keyperformance measures
available to organisationsincluding:• Contributions to
profitability - savings,service and inventory
• Basic workload control• Infrastructure and
competency.
1.5 Analyse and explain themethods that anorganisation’s purchasingand supply function canuse to manage and reduceinventory costs• Economy: achieving best
value for money. Managingthe cost of the supplyoperation
• Efficiency: use ofappropriate inventory
managementsystems/techniques.
• Effectiveness: level ofservice provided by theinventory function to itsend users.
17
7/27/2019 CIPS L4 Foundation Diploma Unit Content Guide 0511
This unit is designed to enablestudents to focus on developingand managing effectiverelationships, old and new, withinthe supply chain.
Students will be able to review anddevelop existing relationships andidentify opportunities forestablishing new relationships thatwill enhance the performance of
the supply chain, while exploringthe benefits and risks ofestablishing such relationships.
By the end of this unit, studentswill be able to apply a range oftools and techniques to managerelationships, and explain how toexploit opportunities in order tomaximise the effectiveness of the
supply chain.
STATEMENTS OF PRACTICEOn completion of this unit, studentswill be able to:
• Review the effectiveness ofexisting relationships andidentify potential areas forgrowth and diversification in thesupply chain
1.0 THE CONTEXT OFRELATIONSHIPS INSUPPLY CHAINMANAGEMENT(Weighting 30%)
1.1 Classify and describe therange of relationships thatmay exist within supplychains• Definition of relationships
in the context of supply• Overview of internal and
external relationships.
1.2 Evaluate the contributionof appropriate and well-managed relationships inachieving co-operationand collaborationbetween buyers and
suppliers• The relationship spectrum• Adversarial• Arm’s length• Transactional• Closer tactical• Single sourced• Strategic alliance• Partnership• Co-destiny.
1.3 Evaluate or analyse thechallenges in managingeffectively the relationships
between purchasers andsuppliers:• Supply positioning model• Supplier preferencing model• The reasons for changing the
way in which a relationshipoperates
• Managing risk in commercialrelationships
• Buyer and supplier behaviourin relationships
• Market management matrix.
1.4 Define the natural life cycleof supply relationships andanalyse the position ofspecific relationships in
their life cycle• The concept of the
relationship life cycle• The stages of the relationship
life cycle• Linking the relationship life
cycle to the relationshipspectrum
• Understanding your positionin the relationship life cycle.
1.4 Differentiate between leanand agile supplyphilosophies on supplierrelationships• Traditional supply philosophy• Lean supply philosophy• Agile supply philosophy.
1.6 Analyse and explain thecorporate socialresponsibility (CSR) and
ethical, technological,legal and environmentalconstraints on relationshipdevelopment• Component parts of CSR• The case for CSR• The case against CSR• CSR and supplier
development.
1.7 Evaluate the relationshipbetween internal andexternal stakeholders in
the supply chain andpropose ways ofmaintaining objectivitywithin the relationships• Ways of maintaining
objectivity in relationships• Services versus
manufacturing supply
chain relationships• Technical specialists
versus purchasingspecialists.
1.8 Evaluate the role of cultureand relationship valueswithin supply networks• Organisational culture• Relationship values and
behaviours• Managing buyer and
supplier perspectives onvalues and behaviours.
22
7/27/2019 CIPS L4 Foundation Diploma Unit Content Guide 0511
2.1 Formulate objectives forrelationships withsuppliers• The impact of internal and
external stakeholders onsupplier selection
• The impact of internalsuppliers on supplierselection
• The external supplier’s
view of the selectionprocess
• Manufacturing and servicesupply chains
• Upstream and downstreamsupply chain activities.
2.2 Evaluate and apply techniques for supplierappraisal and selection
• Supplier appraisaltechniques
• Vendor rating• Supplier auditing.
2.3 Evaluate the effectivenessof the assessment process• Supplier appraisal
deliverables• Measuring the supplier
appraisal process• Effect of supplier appraisal
upon relationshipdevelopment
• Supplier appraisal in thecontext of the relationshipcycle.
2.4 Evaluate the constraintson supplier selectionwithin the public sector• Legislation affecting
supplier selection• Supplier selection routes
available to the publicsector
• The buyer’s perspective onselection legislation
• The supplier’s perspective
on selection legislation.
2.5 Analyse the role ofreciprocal trading inpurchasing relationships
• Definition of reciprocaltrading
• Examples of organisations’policies on reciprocaltrading
• Managing reciprocaltrading in the selectionprocess
• The impact of reciprocaltrading on relationshipsduring and after the
selection process.
2.6 Analyse and explain how to mitigate against thepotential risks of a changeof supply source• Risks of change• Cost of change• Mitigation of risk and cost• Communication and
stakeholder management.
23
7/27/2019 CIPS L4 Foundation Diploma Unit Content Guide 0511
This unit is designed to consolidatethe learning from all four units inthe CIPS Foundation diploma inpurchasing and supply. This unit isdesigned to enable students toapply the fundamental principles ofpurchasing and supply in a varietyof different contexts, including arange of private sectororganisations, including multi-nationals and small/medium sized
enterprises (SMEs), plus the publicsector; national and localgovernment; the NHS; and the not-for profit sector including charitiesand the voluntary sector. Studentswill be able to consider theprocurement cycle as it applies to adiverse range to purchasedproducts and services includingraw materials, commodities,
components, utilities and services,both domestically and in aninternational context.
This unit will tackle the differentchallenges faced by a wide rangeof organisations and sectors as
they strive to achieve value formoney (VFM), good, quality,effectiveness and competitivenesswithin the broader supply chain.
Successful students will be able toapply sound principles ofpurchasing and supplymanagement to a diverse range ofsectors and organisations utilisingknowledge from across all of level
4, and will be able to employ anddevelop transferable best practicewhere appropriate.
STATEMENTS OF PRACTICEOn completion of this unit, studentswill be able to:
• Identify the procurement cycleas it applies to a variety ofdifferent organisations andcontexts
• Recognise the transferability ofthe fundamental principles ofpurchase and supplymanagement
• Appraise the need for differentapproaches to purchasing in
differing organisations andcontexts
• Recognise good practiceprocurement processes andconsider how they can beadapted and transferred to othercontexts
• Compare the diverse legal andregulatory environments inwhich procurement activity
1.1 Evaluate the differentobjectives of public,private and Third Sectororganisations and thedifferent environments inwhich they operate• Ownership and control• Sources of finance,
financial structures andgovernance
• Resource issues• Legal and regulatory
environments• Contrasting business
objectives• Importance of corporate
social responsibility.
1.2 Appraise the different types of private sectororganisations and the
differing demands that they place on thosemanaging the provision ofgoods and services• Different forms, including